Many home owners have real estate that is worth less than they owe on the property. They wonder what are there options and they have heard confusing terms. People advise them to seek a "Deed in Lieu" (DIL) or a short sale, loan modification or workout. Some of the homes are in foreclosure too.
There are frequently many options available for home owners. things are never as dire as it may seem. Careful strategy and planning and dedication to a desired result will often yield the results that you seek. My legal approach starts with focusing on your goals.
There are three central issues: your monthly cash flow in and out (your income and expenses), tax ramifications and credit issues. I advise to select one of those issues because your strategy will affect each one of these issues in a different manner. Start by selecting the one that you care least about. Frequently, it is credit since the loan is already being reported negatively to the three credit bureaus.
The next step depends upon your situation and the particular real estate, but I have discovered that there is almost always a solution that can be of tremendous value to you. I never recommend "walking away" from a property and letting the lender deal with it. this rarely results in a positive outcome and there can be sever repercussions to you.