Deductions & credits

To be deductible as mortgage interest, 

1. the borrower must own the home

2. the borrower must pay the interest

3. the loan must be secured by the home -- in real estate terms, it must be "perfected", usually by recording as a lien against the property with the county clerk so that the home itself is at risk of foreclosure if there was a problem with the payments.

Your arrangement fails at least 2 of these conditions, so neither of you can deduct the interest.