What do banks do with collateral when individuals can't payback the loan they collected?

[Fidelia]

Banks always demand collateral from their customers before they give out loans. And some times, people that submit these collaterals fail in the repayment of their loans. What do banks do with such collaterals when the person can't repay the loans?

 

[Augusta]

They do straight up what was stated in the agreement which most times is to auction the collateral to quickly get back their money

 

[Springtime]

They will act according to the agreement; most probably auction the collateral.

 

[Fire&Rain]

They sell the colleteral on auction. Most times you will find that they require collateral to be in the form of land or property. If you fail to pay back the loan they caution your colleteral in accordance with debt owed.