When the mortgage is delinquent, lenders will often  accept a lower (short) payoff to avoid a foreclosure.  Banks lose money in foreclosure and have created a department called: Loss Mitigation.  My company works with Loss Mitigation to reduce the debt and process a “short sale”.  This will allow a pre-foreclosure sale with no costs to the seller.  The banks discounted payoff will cover the seller's closing fees and allow them to avoid a foreclosure auction their credit history.   They will ask for paperwork similar to a mortgage application.  My company will guide sellers, agents, and attorneys through the process.