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A deed in lieu of foreclosure basically allows you to hand over your house to the bank and just walk away without having a foreclosure posted on your credit history. But, it is always a good idea to have an attorney write up/draft an agreement that allows you to walk away and never have to deal with anything regarding the home again. If you don't do this, there is a chance that the bank may pursue you with a deficiency judgment which would allow them to sue you for the balance of the loan that the proceeds from the sale of your home did not cover. The agreement should say that the bank may only use only the sale of the home to recoup any of its money.