Erin and Dooley,a married couple,borrow $120,000 from Capital & Credit Bank to buy a home.When Erin and Dooley divorce,they are unable to make payments on the mortgage.The market value of the home has declined to less than the balance of the loan.Capital & Credit agrees to a sale of the property for this amount.This is

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This is a scenario of a short sale, where the property is sold for less than the balance of the loan, and the lender agrees to accept the proceeds as full payment of the debt. A deed in lieu of foreclosure is where the borrower transfers ownership of the property to the lender to avoid foreclosure, but in this scenario, the bank is selling the property. A home equity loan and a reverse mortgage are not applicable to this scenario, as they are types of loans that the borrower takes out using the equity in their home.

Erin and Dooley,a Married Couple,borrow $120,000 from Capital & Credit