Yamime was shown to be able to erase people from reality, or at least make everyone forget that they ever existed, in Episode 15. Yamime may have erased Momoko in such a fashion when she came out of her spiritual sleep and begin to terrorize the school. Momoko may have even recognized Yamime as a threat and tried to get her friends to see her as a threat too, causing her "deletion." For whatever reason, Yamime took it upon itself to get Momoko out of the way. This is why, not only is Momoko missing from the story, no one ever mentions her or refers to her at all.
WMG / Ghost Stories
Yamime erased Momoko in Episode 15.