A Deed-in-Lieu of Foreclosure (DIL) is where you, the homeowner, voluntarily transfer the ownership of your property (the title and all property associated with it) to the owner of your mortgage in exchange for a release from your mortgage loan and payments.
A DIL is an alternative to foreclosure and should be considered if:
On the surface, this seems like a great option. Just give the home back to the bank. The problem is that it is very hard to get the bank to accept this option and agree to relieve you of the debt and responsibilities. They don't want the house, they want their money.
A successful deed-in-lieu only happens a small percentage of the time. And as always make sure the bank agrees to this in writing, otherwise you may still be responsible for the debt.