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Actually the plan for giving me the house included that she would move out. But she wanted to be imprecise in how I/We would pay her back for the amount she already payed for the house. Switched back and forth inbetween money and/or getting to live with us sooner or later (so basically what you say). She also did not say how much money we would then owe her and wanted to let that open specifically, which could basically result in us paying the left amount (which we should have done in her name, she wanted us to pay HER the amount every month so that then she would pay the bank) plus "rent" to her endlessly.
kinda wierd shes not telling you the details of the payments on the house, no wonder she is struggling payments, she might assumed certain things? usually when they try to free-load they tell you how much it is owed, or how much money they need.