There’s a lot out there written about Deed In Lieu of foreclosure and you can take it however you want. The real question you should ask yourself is
It’s because it saves them money on foreclosing on you and still allows them to keep the rights of going after you. In fact, it strengthens their position AGAINST you since you willingly gave up. In addition, it helps with their insurance claims.
Most of the time, a deed-in-lieu is offered after a failed short sale attempt. I won’t go into why short sales fail here, but if a seller accepts a deed in lieu, they are basically surrendering to the bank.
In case it wasn’t clear from the above. Deed in lieu of foreclosure is a foreclosure without the legal process.