When a man sells his second trust deed for less than its value, what is this practice called?

When a man sells his second trust deed for less than its value, this practice is called discounting. Discounting refers to the process of selling a financial asset, like a trust deed, at a price lower than its face value. This may happen for several reasons, such as the need for immediate cash or the assessment that the asset's market value has decreased.

In the context of trust deeds, discounting addresses the difference between the amount owed on the trust deed and the reduced sale price, allowing the seller to retrieve some of their investment even if it means taking a loss. This practice is common in real estate transactions and financial markets, where assets can fluctuate in value based on various economic factors and conditions.

Understanding discounting is crucial for real estate professionals and investors, as it affects investment strategies, cash flow management, and valuation of real estate assets.