This is essentially the last option before foreclosure. If you were not interested in or turned down for a loan modification and your short sale didn't go well, your loan servicer may allow you to basically "give the house back" prior to foreclosure. In order to be eligible for a Deed in Lieu, you must have only one loan (first lien mortgage) or a first and second lien mortgage with the same lender. You must have your lender's cooperation to successfully complete a Deed in Lieu.
You don't need the assistance of another lender or real estate agent to complete a Deed in Lieu, and you shouldn't have to pay anyone for this service. Contact your lender directly and ask for this option after you've exhausted all other available options (loan modification, refinance, or short sale).
