Quit Claim Deed/Foreclosure Question?

One of my friends in deep trouble has Quit Claimed her interest in some real property to an LLC that a friend of hers controls. She is in default big time on her mortgage. I presume that her friend's LLC will be sued by the mortgage company along with the friend, is this correct?

The mortgage holder will have a perfected security interest in the property and the Quit Claim by her to the LLC effectively will mean nothing to them as she is the one who signed the mortgage and she is the one that is liable unless the debt is paid off in full, not the person she may have entered into an illegal contract with...they would merely be seen as subletter to the property and any action the LLC would have, would be against her if they paid her any consideration (money) for the property or take is as a loss to due to their lack of due diligence in not obtaining a title search to reveal the liens on the property.

The mortgage company is likely to sue only your friend for the entire amount, unless the LLC is willing to payoff the mortgage in full.

The LLC takes "title", if at all, subject to the mortgage and all defaults. Probably no personal liability for deficiency, if any, but the real estate is encumbered and subject to foreclosure, etc. There is probably a "nonjudicial foreclosure" remedy in your state.