If you are considering just letting the bank foreclose on your home there should be a few things you need to think about before doing so.
1) Credit - What will have the least impact on my credit? Deed in lieu, short sale or foreclosure.
2) Do I have enough time to consider trying to sell my home before the sale date, or auction date is set? Meaning the date the lender decides to sell your home at public auction. Usually, if you are doing a short sale and you have a sale date the next month, you better hope you can get the property under agreement otherwise you will not have enough time to sell the home and the house will go to auction.
What happens the day of the foreclosure? Will I have to move that very day?
1). NO. Most people think once the house goes back to the bank or the new owner, you have to move that very same day. That is not the case, in most states the time frame for you to legally vacant the property can be from 20 days to 45 days depending on the state you live in. You will also be given a notice in writing as to when you actually have to leave the premises.
What is Cash for Keys?
1). Some lenders offer what is called "cash for keys" this is usually a incentive for the homeowners to vacant the property and the lender usually will offer to pay for your moving expenses and or give you a certain dollar amount to move from the property. You can call your lender and see if they participate in this program. You also have to agree to leave the property in good shape and not take anything i.e. copper plumbing, appliances etc...
For some this maybe a good cost effective way to move and rent a new home and start to work on rebuilding their financial lives.