I agree with the previous posters about not getting attached to the property, as well as reserving the services of an attorney. I think something is fishy with the claimed deed of trust. Looking at what you present as the note reads that it is unsecured (no mention of the loan being secured by the property, right to take possession if in arrears etc). You can’t get it converted to a deed of trust without you being in arrears (behind in payments to in-laws) and them going to the court to place a lien on the property, followed by using the lien to get deed of trust.
There is also nothing in the loan arrangements from the in-laws indicating that the note is callable. This means that if you are not in arrears, they legally can’t take action. One thing that does bother me about the note, is that it is open-ended. It states principal and interest but does not state to total time-period for the loan (30day? 15year? 30year? 50year? – which is required for amortization calculations for principal and interest). There is also nothing in the note saying that it becomes callable should the two of you get divorced.
There is also the issue of how the divorce occurs. California is a community property state. How were the assets divided upon divorce? Is it final yet? Was the property in both your names?(did she forge your signature to quit-claim your portion of the property to get the dead of trust – if this occurred, it can be straight to jail for her) – again this is why you need an attorney.
