Karen is on-the-mark about the mortgage liability. Unless you have an assumable loan (highly unlikely) AND you work with the bank to transfer that mortgage you will continue to be liable for the entire term. The liklihood of any bank transferring that mortgage from two individuals to one individual when a property is under-water is ZERO. If you do a Grant Deed to your roommate, be careful, you remain liable and responsible for that mortgage until it is paid off (either by a new mortgage or by a sale). If you do remain on the mortgage and "give it" to your roommate, you will continue to be liable for any deficiency that may occur in the future by short sale and/or foreclosure down the road.
This is probably not what you want to hear, but it's the facts and you need to be very careful. Depending on the Lender, your roommate likely cannot buy-you-out it in a short sale. Most banks require short sales be through an Arm's Length Transaction (no relatives or friends or former owners can buy it).
I have a very good friend (REALTOR) who went through an amicable divorce several years ago. Her husband kept the house and they did a Grant Deed from her to him. He promised to refinance but guess what, he couldn't because his business fell apart. She got the Notices of Default as well as he did when he stopped paying the mortgage. To protect her credit, she had refinance but he still lives there with his new wife!
Be careful and best of luck,
Broker / REALTOR
"Moving Lives Forward"