Legal Question in Real Estate Law in California

After escrow closes, they can quitclaim deed it to you. That doesn't relieve them of liability on the mortgage though.

Although Mr. Nelson's answer is correct, it has one major flaw: every mortgage I've ever seen has a due on sale or transfer clause. That means that if your parents deed the house to you, the mortgage company has the right to immediately demand repayment in full. For similar reasons, there is no way you are going to be able to get on title without your own loan, unless you commit mortgage fraud.

As long as title is in your parents name and you occupy the property, there is no way to avoid you being legally tenants. The income issue, however, is easily remedied by simply paying all the costs of ownership and no more. Then your parents net income will be zero and it will have no tax implications.

Speaking of tax implications, however, any scheme that would work the way you are trying to make it work would have important property and gift tax consequences. There are probably some sophisticated trust mechanisms that could effectuate what you want, but at what point are you spending more on the legal process than you ever would save by just doing the simple thing: Have your parents buy the house, rent it to you at cost, with an express option to buy it from them at cost any time within, say 15 years?

The only way to avoid being a tenant is to enter into a "land sale contract." In that situation, your parents purchase the house, and are on title, and the loan documents. You then execute a land sale contract with your parents, with the terms upon which they transfer to you. You may want to structure it so that it at the time you receive a deed, you are able to either assume the existing financing, or obtain your own financing. You can space this out over the 3-5 year period, or a 7 year period. I suggest speaking to a competent real estate attorney familiar with this area of the law.