Inherited house.....kinda

[N/A N/A]

Greetings,
I am a newbie here. I have some real estate questions and hope to find some answers. I am not in the R.E. business. I have so many questions...I will start with a general one.

Background: About 9 years ago, my wife and I inherited a house from my parents. They lived there for about 11 yrs. They are still alive, just retired. A will and trust were generated to state this. At the time the house was for sale for 175,000 for 12 mos. They could not sell it. We moved in and began to fix and upgrade. We have lived there ever since. The house is beautiful and worth about 650K. The house is still in my parents name. They paid cash for their retirement home. They remain the papered owners and get the write off. In order to compensate us for this, we pay 1100.00 of the 1365.00 monthly.

Situation: A month ago I thought it would be a good deal to take some money out of the equity to consolidate debt. Spoke to my mom about this. She agreed it was a good idea. I suggested taking money from the equity. She insisted on an equity line of credit with an adjustable interest rate. I do not like adjustable interest rates. Now that the loan is here, she has gone mad! She made the loan for an amount of 46,000. She says half is hers and half is ours. She also says the house/equity is half and half. She also tells me the new loan is interest only for 10 yrs. When I ask her about the last 20 yrs of the loan, she has no idea of the terms.

I am very grateful she has willed the house to us. I am just not sure what will happen and do I have any legal recourse. I am scared of this loan and her new power trip she has!

Question: Do I have any legal recourse as far as what was stated verses what is happening?

Sorry for the longwinded post!