It will affect her just as it does you. I have a client that completed a short sale in January. It took his score down about 100 pts, but as of that time, the mortgage was showing open - once it is reflected as closed, hopefully that will be a little better. In any case, he was ineligible to co-sign on his son's student loans, which really left him in a bind. We figured out a plan, but it was not easy.
A foreclosure on your daughters credit will be worse.
This is terrible. As a mom, I can't fathom having my child on the hook for my debts - it is usually the other way around. How could this come to be? I am not trying to make you feel guilty, but I just don't get it. I can not imagine facing an issue where my daughter would have to pay for my financial sins.
I wish the very best for you and especially your daughter.