Legal Question in Real Estate Law in California

It sounds like what you are saying is not that you took out cash equity and refinanced the home, but rather that your parents did and gave you the money. If you signed the deed of trust it is not valid, unless you had a power of attorney to do so, so my guess is your parents signed it. If what I just said is correct, the default and any other proceedings will have no effect on your credit or really on you in any way, except the fallout from screwing up your parents credit and making them lose their house.

I agree with Mr. McCormick. Your question states inconsistent facts. "Equity" is something only an owner has - it is the difference between the owner's interest in the property and the various liens that would have to be paid if the owner sold. A non-owner has no equity and therefore cannot borrow to take out equity. Sounds like your parents may have borrowed some of their equity and then, in a separate transaction, lent you some of the proceeds of their loan.

If you signed a deed of trust or a promissory note secured by a deed of trust, or both, that may have been in the capacity of a guarantor -- you could not have signed as a borrower. If you are a guarantor, you are at risk not only of damage to your credit, but also becoming liable on the note itself. If so, see a lawyer.