The only time you can “negotiate” a payoff is when the home is not valued for an amount at least as high as what is owed on the current mortgage. At that time, if you are looking to sell the home and have a bona fide purchaser, you can contact your servicer with the details of the purchase, and they will respond with an approval or denial of your request for a “short payoff”. The lender/servicer must usually get HUD involved as HUD must approve the loss as they will be paying a claim for this amount and that means they will need to order an appraisal and determine if the payoff request is a minimum of 95% of the current market value of the home.