David owns a house worth $100,000.He has an outstanding loan principal of $98,000.David defaults on his mortgage payments.To avoid foreclosure proceedings,David conveys his house to his lender in satisfaction of the mortgage.This is

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This is a deed in lieu of foreclosure, where the borrower conveys the property to the lender to avoid foreclosure proceedings. A short sale involves selling the property for less than the outstanding loan balance, forbearance is an agreement between the borrower and lender to temporarily suspend or reduce loan payments, and conveying the property in satisfaction of the mortgage is not illegal but rather a legal option to avoid foreclosure.

David Owns a House Worth $100,000