This is known as a deed in lieu of foreclosure and is similar in many ways to a short sale. However, the lender will be responsible for selling the house in this situation. It may have the right to sue you for a deficiency after the sale unless you can get a written agreement to the contrary. As with short sales, you probably will not have this option if you have multiple mortgages on your home. Lenders tend to prefer short sales to deeds in lieu of foreclosure because the homeowner is responsible for selling the home in a short sale.