What is a Deed in Lieu?

A Deed In Lieu is just that: a deed back to the bank in lieu of foreclosure. You are simply calling the bank to say you are done and they can come get the keys. If you have one loan, this works. If you have two loans, this is not an option most of the time. Again, from a credit and future options point of view, this could be one of the worst choices anyone might make.