Legal Question in Real Estate Law in California

I assume that you have not gone through probate to get the house transferred into your name. If you are going to default on the payments you should not have title transferred so you do not get a negative remark on your credit. When ever someone does not pay on the second mortgage the holder of that lien will foreclose on the property if they feel there is enough equity to pay off the outstanding first, the costs of foreclosure, and leave some cash for them.

What the future holds for you and ownership of the house will depend upon several factors including whether you get employed so you can resume making payments, and whether the house has any equity in it or is "under water." It also depends upon how interested you are in keeping it. I assume you are the only heir (but you did not say). Whether a probate is necessary or not probably depends upon whether your parents had a will, or the house was in a living trust, or perhaps there was a joint tenancy setup. It would be worth your while to contact a lawyer for an initial consultation.