We have been contacted by a borrower that is in default and he has indicated that he would like to deed over the property to our bank in lieu of foreclosure.

We haven't been lucky enough to have this happen yet, so is it as simple as having our bank attorney prepare a deed transfer?

Anything else we need to know? This is virgin territory for us.

Time to call your counsel. Normally a borrower offering a deed in lieu will want you in exchange to forgive the debt and forego your right to any deficiency. Documentation-wise this takes the form of a debt settlement agreement done concurrently with the deed in lieu. I don't know if I'd consider the bank "lucky" at this point. There are times when a deed in lieu is not the best course for the lender. IMHO the borrower would have to be nearly judgment-proof for a lender to consider it. But then again in these times it's the bank's business decision to make. It could be the quickest and least cost recovery.

Speak to your attorney. In most cases if you accept a "deed in lieu of" you cannot hold the borrower responsible for any expenses and/or deficiency.

Yep, call the attorney. Another consideration is title issues, like mechanics liens and municipal liens and other clouds on the title that would affect the value of the property.