Basically, she has her name on the mortgage and any equity and responsibility is theirs. Her responsibility towards the mortgage continues, regardless of Quit Claims, until the mortgage company gets paid in full. She benefits from any equity, unless court order deem otherwise and/or other legal agreements are made.
Let’s say Countrywide holds the mortgage and the both partners signed for the loan: Payments need to come in regularly. Countrywide doesn’t care if one person pays 99% and the other pays 1%. To them, it’s just a payment from the buyers. For example, if you buy a house with someone and you need money from both parties to meet the mortgage payments, but one person leaves, quits their job and says ‘take it’, the person left behind better figure out a way to pay the mortgage. Both are still responsible. Even if a Quit Claim happens…BOTH are STILL responsible – EQUALLY – to satisfy the mortgage.
If they don’t make payments (regardless of who ain’t holding up their end) and the house goes to foreclosure, both loan signers are screwed, owe the money not paid AND will see their credit reports equally affected (destroyed). Get used to renting for the next seven years.
If one party wants to ‘keep the house’, they need to refinance the home in their name. Once this happens, the other party is free of responsibility. If there is equity in the home, at refinance time the person leaving the home and not keeping it should receive their chunk of equity.
Example:
200k home (fair market value)
150k remains on mortgage
50k in equity as a result
If person A wants the property, they need to ‘buy’ the house for 200k. Both parties have 25k coming to them in equity. So person A, the buyer, gets a loan for 175k w/ 25k down. This allows person B to leave with their 25k, be free of the mortgage and the quit claim will mean they are done with the property.
If the house is just sold outright, the equity is just split.