Lenders know that a short sale will net them substantially more money than a foreclosure. I have an example in the post below. I recently saw a home that was for sale as a short sale. A buyer offered to buy the home for $237,000. The lender rejected that offer. The home was foreclosed on and sold for $190,600.
The lender lost around $46,400 by rejecting that short sale offer. The short sale lenders have ran all the numbers on a short sale versus foreclosure. They have highly paid, professional actuaries who analyze all of their data to see how they can make more money. They compare the costs of a short sale with the costs of a foreclosure. They know that they can recoup their money faster with a short sale versus foreclosing on a house and then reselling it. Because of that they are willing to pay your delinquent homeowners association dues.
In addition, the bank pays the real estate agent who sells the house. They know that if the foreclose on the house, then they will have to hire a Realtor to sell the house. They also pay the title insurance, property taxes, and homeowner's association fees because they must be paid in order to sell a house.
The Bottom Line: All of the costs are borne by the bank in a short sale. You pay nothing.