Continuity mistake: When Kyle drives away in a car, the logos on the trunk disappear and reappear from one shot to the next. (00:34:55)
Plot hole: About three and a half minutes into the episode, Kyle looks through the photo album and sees a picture of his fake mother (the woman paid to pretend to be his mother) giving him a dog for Christmas. Two minutes later in a different scene, the paid parents claim in front of everyone that they're both allergic and had no pets. So by now it's obvious they're lying. Another two minutes later in another scene, Kyle's foster parents are looking through that same album and nobody ever notices the inconsistency.
Answer: He just "created" her.
Paul Brannon