Unofficially lenders will usually settle for 5-8% of the debt, although you can reduce the settlement to nothing if you force the lender to prove it played by the legal rules. That is what this site is about.(posted 8985 days ago)As for whether they would be better off handing in the keys... who can say? It depends on many things, most of which are referred to in the site: earnings, disposable income, employment status, your ability to withstand mental stress.
My personal view is that you should only hand in the keys or submit to repossession if you cannot - and know you never will be able - to pay the mortgage off. I don't think repossessing because the house is uncomfortable is fair to the lender.
Lee