Which action is NOT an alternative remedy for a lender upon default?

Discharging the mortgage is not typically considered an alternative remedy for a lender when a borrower defaults. In the context of mortgage agreements, alternative remedies are actions that a lender can take to recover funds or secure their interests based on the borrower's default.

A demand letter, judicial sale, and action for possession all represent strategies a lender may pursue to mitigate losses. A demand letter serves as formal notice to the borrower about the default and requests payment or resolution. A judicial sale involves selling the property under court supervision to satisfy the debt. An action for possession allows the lender to reclaim the property if the borrower fails to meet their loan obligations.

In contrast, discharging the mortgage essentially acts as a cancellation of the debt obligation, which would not help the lender recoup their investment in the event of default. Therefore, discharging a mortgage does not align with the actions a lender can take to address a borrower's failure to meet loan terms, making it the correct answer in this context.