loan approval/mortgage problem

this is a little complicated so i'll try not to be too long. my father recently passed away and i'm moving in with my mother. we applied jointly to refinance so that we could remodel the house before i moved in. my credit was fine - no problem. my mother's credit score was low which was surprising because she is old school, pays everything on time, doesn't believe in credit cards. turns out that the major ding on her report is an old credit account my father opened to bail my youngest sister out of financial problems back in 1981 - for a large amount of money. my mother knew nothing about it and we only found out because of the loan we're trying to get. apparently, my sister had been making payments on it, but has had 4 90 day notices since 2009 and 2 60 day notices. she is not financially responsible and it's not surprising that she's been late. my mother is on the account as an "authorized user"; we have no idea how or why since she knew nothing about this transaction. is there a way to get this off my mother's credit? (surprisingly she and my father were able to buy a used care a couple of years ago - this ding did not come up.) would an option be a quit deed putting me on the deed since i qualify on my own (but i own no property) and would the existing equity remain or would it be like a new purchase? i hope someone out there can help me - i need to move out of my apartment by january, but it's almost impossible until the repairs & remodel are done on the house. more importantly, we really want to get this off my mother's credit. thanks.