Legal Question in Real Estate Law in California

First, once you sign the Quitclaim Deed she will be the sole owner of he property and you will have no ownership rights to the property whatsoever. If you name is on the mortgage, it will remain there until the property is refinanced or the existing loan is otherwise replaced with a new obligation. All of that being said, if you enter into some arrangement with your co-tenant that does not accurately represent the truth of the facts being stated in documents submitted to the lender you both may be committing fraud on the lender. When considering loan modifications, lenders are looking to see if there is a hardship and whether the borrower(s) have an ability to make the monthly payments so you transferring your interest will likely not have an impact of whether a modification will be granted. Finally, you should be aware that most modifications are routienly denied by most lenders; so, if you transfer your interest in the property and the lender denies the modification, you gain nothing.

As long as you are on the mortgage, the lender is going to consider your finances in any loan modification. Transferring your share to her will not help. It might help with a refinance, however. In that case you will need a well drafted (i.e., lawyer) agreement regarding what happens to your off-record ownership rights and/or investment/equity in the property.