I would want to know how the son acquired title.  From the parents?  If we look at substance over form, is this a case of "let's turn our gift into a tax deduction by deeding half the house to our son, then buying it back from him with deductible interest" ?

@rbynaker "(generally the mortgage is filed with the local court but state laws may vary)."  Generally, the city or county clerk is not a part of the court system.  What's generally the case in your commonwealth is not true elsewhere.  (Generally, my friends in Kentucky, Virginia, Pennsylvania and Massachusetts tell me they live in a commonwealth, so I suppose that's what happens elsewhere.)  But the point is, it's not enough to have the document that secures the debt, it has to be recorded wherever people do that.