Absolutely, In fact, your lender would rather you sell the property than allow the foreclosure to continue.
Your lender does not want to take your property through foreclosure. Even if you have no equity in the property, the lender wants to find a solution.
This is precisely why lenders agree to a Short Sale and accept a discounted payoff to fully satisfy the loan. In a Short Sale, the lender in nearly all cases pays all the closing costs – including title fees, escrow fees and the real estate commission.