Hi. Yes, she knows it is wrong, but can she help it? Maybe not. It is something the vet should assess. If she is confirmed as physically ok, then it's entirely behavioral and the problem (sorry about this) may be more your husband than your dog.
If your husband is not willing to 'get on board' in solving this, then there is really no chance of resolving it. Sorry to be blunt, but consistency is the key to the remedy here and without everyone adopting the same approach, your dog will get confused and anxious. Your dog clearly recognizes the crate is a safe place, otherwise she wouldn't be content there while you are out, so this is definitely how to start - maybe, as a compromise, what about using the crate in the bedroom initially. This would protect your house from inadvertent pooping and peeing overnight. If successful, you could then adopt it when necessary during the day (when you are both out). Gradually, your best friend will recognize the house is home - and outside is the toilet area.
Good luck ... let us know how things go. Tony
Thanks everyone. To answer some questions/comments.
There is no way my husband will allow me to put her anywhere else at night but our bed. I have tried. He is adamantly against it and thinks it is mean and since she has spent every night with us he is even more opposed to it. She had gone poop in the bedroom but has not peed in the bedroom. She pooped in the bedroom just this week.
I am in and out during the day. Usually gone from 8am - 12:30pm and she is in her crate during this time. I take her out and she will go pee and poo and gets lots of praise and a treat.
Sometimes I know when she has gone to the bathroom in the house because if she is just coming out of a room where she went, she will look at me, look sheepish and then go hide under the bed. This means she knows it is wrong, right?
Yes, these little dogs can be tough but have found makes marking to be more of an issue, actually.
First, I assume you have possibly discussed this with the Vet to make sure there are no physical issues?
Why doesn't your husband want her crated? I am a firm believer in crate training and she is obviously used to it. The dog I have now is crated when we are not home and she does sleep in a bed in our room but she is ok at night. I have had other dogs that were crated at night, depended on the dog.
What food are you feeding, how often and at what times?
Glad you realize you have to catch them in the act. Are you home all day? Where is the dog if you are away from home?
Kind of tricky sometimes, but if you are home, you can tether her to you with a leash or cord so you can control what she is doing and where. Take her out regularly for potty breaks and praise.
You can try Tony's idea also about limiting her space.
Sounds like you need to start from square one and hope your husband is on board.
You have got to be in control and limit her opportunities.
I think this is entirely behavioral. First, letting the dog sleep in your bed is a mistake. Ideally, it shouldn't even be in your bedroom. he problem is, it may consequently think that everything outside the bed - and/or the bedroom - is actually outside. Jerry is quite right saying most dogs will not foul their own bed region - so the first thing to try is to get her to sleep outside the bedroom, so she recognizes that is where she sleeps and hopefully won't poop there.
If that fails, then continue limiting her bed space area - so if she poops in the kitchen, try making that her sleeping area.
Once you have some signs of success, you will need to use positive reinforcement EVERY time she goes outside to poop. A one minute play with her favorite toy will suffice - or a small edible treat. Tony
Well just one observation, it is a "terrier".. the hardest head breed I've ever worked with.
The best way is to catch them in the act, keep trying so they can associate their behavior with your displeasure. How you express the displeasure is something with a lot of disagreement. I am one who believes in both reward and punishment in training.
As for over night, maybe closing the bedroom door and all closet/bathroom doors so the dog will have a limited area to poop in. Dogs, I believe in general, don't mess in what they consider their own "nest". If the dog feels the bedroom is its nest limiting it to the bedroom overnight could be a start.
Happily my West Highlands Whiter TERRIER is well house trained and never does an bathroom activity in the hours. I am surprised how he can go to sleep at 7 PM and not go outside until 8 AM, over 12 hours and then not be in any hurry to potty. But he expresses his stubbornness in other ways, including nipping.