She's probably thinking of "cash for keys." http://homebuying.about.com/od/forec...8_cashkeys.htm
There is no requirement that the bank make such an offer. Some may, some may not. They might be perfectly willing to let her live there until they get around to completing the foreclosure. As for your credit...you're screwed. Thanks mom! There is really nothing you can do to fix it now. A bankruptcy might help but only a competent local BK lawyer can properly advise you.

