Robert wisely asks which country this is from and my bet's on Spain, although I admit this may be due to "deformación profesional", as it's been constantly in the news in Spain since 2009 throughout the mortgage crisis and also because one of my best clients is a bank.

These are the two common procedures when dealing with a real-estate NPL.

When unable to honour the mortgage payments the borrower may:

a) Simply hand over the keys. This is commonly called a "Deed in lieu (of payment)".
R. Jowers suggests "substituted payment" but I believe this could be construed as referring to some other asset offered in lieu of payment (objects of value, etc) whereas "Deeds" would clarify that it refers to real property.

b) If the mortgagor holds out until the bank forecloses on the property, it is then auctioned off and, if the reserve is not met, the bank can then snatch it up for 60% of the tasación or appraisal value. In the vast majority of cases, no-one attempts to outbid the bank so they now have ownership of the property and the borrower is saddled with the remaining debt ad infinitum. (Though murder is subject to a twenty-year statute of limitations)

In bank reports b) is generally referred to simply as "foreclosures". The auction process is implicit.