The borrower gives back the property to the lender rather than go through with a foreclosure process. Yes, I believe it does show up on your credit report.

What I think you mean is Deed in lieu of foreclosure and if so what it means is that a lender and a borrower that are negotiating, due to the buyers inability to pay for a loan obligation, strike a deal called a forebearance agreement in where the lender agrees to take a deed for the property from the borrower and not go through the litigation required under the mortgage, in essence letting the borrower off the hook on having to pay for the loan amount then owed. This type of agreement will not affect the borrower's credit since all that is of record will be the transferring of the title to the lender and the releases of the note and mortgages. They are usually not done if the values of the property are much lower than the amount owed as a result of market or other conditions.