A deed-in-lieu is when a homeowner voluntarily surrenders their deed to a mortgage holder to satisfy a mortgage, effectively transferring ownership of the real estate to their lender. A deed-in-lieu prevents the forced sale of real estate at a foreclosure auction.

If there is a single mortgage on the property, a deed-in-lieu of foreclosure may be an attractive alternative for the lender, as it avoids costly foreclosure proceedings and they may be able to repossess the home sooner. If there are multiple mortgages on the property, a deed-in-lieu may not be accepted by a lender, as they would still have to satisfy the secondary lien holders to gain full ownership of the property.