Deed in Lieu
The deed in lieu of foreclosure offers several advantages to both the borrower and the lender. The principle advantage to the borrower is that it immediately releases him from most or all of the personal indebtedness associated with the defaulted loan.
Basically, you forfeit all rights to the property and the property will be conveyed to the lien holder. In exchange for the deed-in-lieu, the lender may waiver all deficiency judgment rights.
The borrower also avoids the public notoriety of a foreclosure proceeding and may receive more generous terms than he would in a formal foreclosure.