When mortgages are sold they are sometimes discounted, some as much as 50% of the face value and more depending on the rate and term, condition of the property etc. I have been trying to get a mortgage company to discount the payoff one on of the properties that I currently own that is coming out of bankruptcy. This too would be discounting the mortgage. If you can find notes where the seller financed part of the purchase price and wanted the income but later needs cash they may discount the mortgage to get that cash.
A short sale is totally different. You find a seller that owes more than the house is worth and with the help of the mortgage company discounting the payoff you can buy the property for less than the mortgage balance and the seller nets zero for their equity. Usually these too are in default and or in bad condition. Hope this helps answer your questions
Good luck and thank you,
Ted P. Stokely Jr
11505 Sw Oaks
Austin, Texas 78737
512-301-9171 home
512-587-6177 mobile