A transaction in which a borrower sells a property for less than the current balance of the loan and then provides all of the proceeds to the sale to the lender,typically in full satisfaction of the loan.

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This is describing a short sale, which involves selling the property for less than the outstanding mortgage balance and using the proceeds to pay off the lender. A prepackaged bankruptcy involves pre-negotiated terms between the debtor and creditors, a judicial foreclosure involves a court-ordered sale of the property, and a friendly foreclosure is an agreement between the borrower and lender to transfer ownership without going through a formal foreclosure process.

A Transaction in Which a Borrower Sells a Property for Less