Legal Question in Real Estate Law in California

Since this is a "California" question and your Zip code seems to be in California, I'll assume California law applies on both the property end and where you live, even though they are far away from each other.

Advising you properly requires several pieces of information that aren't provided. One is whether, and if so, to what degree you are "under water" on loan balances versus current market value. Another is whether the present financing is purchase money or whether there is a refinancing involved.

There are some advantages to older folks owning property, including the availability of reverse mortgages and a larger homestead exemption, but there assume the elders who own the property have equity in it.

I think you are facing more of a business decision than a legal decision, and in some respects it is a family decision. Remember that real estate values have begun to go up. Seek competent tax advice. Remember that you are a prospective heir. Watch out for the possibility of a deficiancy judgment or a suit from a sold-out junior lender if you allow a foreclosure to occur. Consider your parents' alternatives.

If you face nasty consequences from foreclosure (unhappy parents, bad tax consequences, a deficiency judgment, damaged credit) you might consider sticking it out until you can refinance or sell without such bad effects. See a local attorney who does estate planning, family wealth protection, or foreclosure counseling. Think of it as a long-term economic and investing decision.

Or just sell it?