Without giving you any legal advise, let me tell you a quick story. I received a call from a client who told me that he had filed bankruptcy and he believed it was discharged approx 3 years ago. Thinking he was past the 3 years waiting period in order to qualify for an FHA loan, he wanted me to run his credit and take his application. Before I did, I asked him, "When did your house finally go into to foreclosure?" He said, "I don't exactly know". Well the next thing I did was to run the address and believe it or not, the home had still not been foreclosed and was still showing in his name. I called him back and told him the news and he was absolutely shocked. So he asked me what now? Unfortunately, I told him, your waiting period doesn't start with your BK Discharge date, but the date of the Trustee Sale. So in this case, what do you think I suggested that he do? So in some cases, you can see that a Deed in Lieu of, is simply the fastest way to bury bones and get on with your life. With all the MERS debacle with all the now defunct lenders, there are homes out there that the banks simply can't foreclose on because of the some the fraud that was done. So be careful! Seek the advise of an Attorney, some things like past due HOA dues or County Taxes can follow you even after the deed is transferred so you have to cover your bases and make sure those things are addressed.
Best of Luck!