If you hold the first trust deed on the property that you are writing about and the borrower has failed to keep current on the monthly debt amount your option is to try and work a modification of the loan, accomodate in a short sale or foreclose upon the property.If the borrower has offered to provide you with a deed in lieu of foreclosure, before accepting it, you need to obtain a preliminary report on the parcel. If there are junior liens on it, you should consider foreclosing on the parcel to wipe them out to clear title to it as opposed to taking title subject to the liens. For further questions I suggest that you consult with a real estate attorney about the question you have written about.