Quit Claim on property but still on the loan
I need an advice for my wife who had bought a property with her friend 3 years ago. After we got married on 2007 my wife had quit claimed on the property for her friend to continue the mortgage payments with their verbal agreement that she will refinance it as soon as the market is ok.
For more than a year and half we don’t have any problem until 3 weeks ago banks are calling our home and leaving a message that my wife needs to call back. When we called them back they had informed us that her friend had stopped making payments already.
Upon knowing this we called her friend and asked her what is going on. Only then she had informed us that she will do a short sale on the property. And her reason is that she could not afford the monthly payments.
What can my wife do to protect herself and property? She only quit claimed on the property but her name is still on the loan.
We are now afraid of what can happen, we have our primary residence wherein my wife is also on title and on the loan. Our savings and other properties which is also on both our names.
Her credit has been ruined already. Please advice on what is the best thing to do. Thank you !