Getting the Bank on Board When Coping with a Foreclosed Condo Unit

"There are some banks where it's very difficult to get them to make a deal [so you can] arrive at a resolution," says veteran real estate attorney Marc Schneider, a partner at Schneider Mitola. "But if you get to the right person and someone really analyzes what you're discussing, in a lot of instances, it would pay for them to buy out the condo association's interest."

"If you can get somebody at the bank that has any authority, yeah," agrees attorney James Samson, a partner at Samson Fink & Dubow. "But if you're talking to a [low-level] loan officer, who's working from a checklist of questions" and has little, if any, leeway to deviate, "then it's a waste of time. He's not going to take a risk, because you'll never get fired for not touching a file, but you'll get fired for messing one up." Banks in general are "tied up with all their regulatory procedures," he says. "They've got to have appraisals and this and that, and they're so afraid of making a mistake."

Schneider admits that some banks have a tendency toward immobility: "We have a case right now where a lender was in a foreclosure action and the court told them they didn't follow proper procedure and had 60 days to correct the problem or the court would consider the action abandoned. It's six months later now," he says. "The bank's losing money every day." He adds, however, that he has seen this process work. At Woodbury Greens, a townhouse foreclosure has resulted in rental revenue for the association.

A representative of the trade group and lobbying organization, the New York Bankers Association, did not respond to requests for comment.