They will settle for around 20 cents on the dollar. 

If it's not worth a PM's effort or time because of a difference of opinion re a reasonable rate, it seems to me that can be settled rather quickly and in advance so everyone's happy and there are no surprises.Agree / no?

Not saying settle for D class neighborhoods, but perhaps it means re-defining your criteria a bit.For me personally, I really like downtown SJ.

Even if the prospective buyer has the ability to settle with cash, why would they want to and incur additional transactional costs of then immediately originating a loan thereafter?

Just cuz some guy with a clipboard and fancy paperwork tells you the house is worth $65K doesn't mean you'll find a buyer ready, willing and able to pull the trigger on that deal and when the dust settles, that sales price is likely to be much lower than fancy clipboard guy claims it should be.

They agreed to settle the lien for less owed.I have no clue what the water department there does now.

I can do that for 20 years and then still have 7 figures left to settle down, if I want to.  

The floor has settled over time 1 inch over a 10 ft span. 

We settled on a 4 bed 3 bath 2055 square foot home in the suburbs of Tucson for $162,360.

Certain lenders could impose limitations or demand that you settle the current mortgage prior to executing this kind of transfer.Make sure your property is adequately covered by insurance.