‘Full & final settlement’ means that a mortgage/loan lender(s) let a homeowner pay an agreed lump sum that is less than the balance owed.
In return for having a lump-sum payment, the lender agrees cease any possession proceedings and to write off the rest of the debt.
Depending on the circumstances lenders will accept up to 20% less that the mortgage/loan balance.
This maybe be sufficient for you to sell your property to a quick-sale company and avoid a mortgage shortfall.
As part of this agreement it is important that the lender confirms that they will inform the credit reference agencies that the mortgage/loan balance has been paid and when.
National Debtline provide useful guidance notes regarding Full & Final Settlement Offers here.
They also provide an editable template sample letter to your lender here, however on such an important matter we would strongly recommend that you employ a specialist solicitor to handle this matter on your behalf.