Many people facing financial difficulties reach the conclusion that they are going to loose their house and have to move so they contact the bank and just let them foreclose. This is a bad idea for many reasons.
Reason 1. The Bank will, at best, buy your house from you for the balance of the mortgage on a Deed in lieu of foreclosure, at worst, simply auction your house on the Courthouse steps. In the first disposition, you will be relieved of the mortgage debt. In the second, you will not be relieved and the Bank will sue you for the deficiency. In both cases, you credit will take the same hit as a foreclosure.
Reason 2. Banks do not always take possession of houses that they foreclose on. In fact, there are houses all over that have been foreclosed on that sit empty. The law does not require that you vacate your property until the Bank demands that you leave and then gets legal process to have you removed. So, by just handing over the keys you are making yourself give up possession weeks, often months, sometimes even years, before you may have to.
Reason 3. The Bankruptcy Code gives nearly everyone the right to cure their late mortgage payments and keep their home. So, you can fix your financial difficulties and, potentially, sell that home years down the road at a profit.
Banks are not in the business of helping you. They are in the business of making money. There are a number of marketing, advertising, and regulatory reasons why they have to appear like they are in the business of helping you, but they are not. Consulting an insolvency lawyer, a bankruptcy specialist, before making a move with your home may prove to be the first, and best, financial decision you make on the way to recovery.