...and to receive immediate refund of all payments and deposits made on account of or in contemplation of the contract, if the purchaser exercises the right to cancel before the vendor records the contract.[/i]
I would definitely check with an attorney ASAP, and probably then turn around and file this sucker ASAP. Ok, they're family...but when it comes to money they "seem" to not be treating you all that well, and if this little carrot falls into their lap...hard to say exactly what they'd do. Heck, they may be extremely upset if they find out right AFTER you actually file. "What do you mean, all I had to do was X and I'd get back a crapload of money, and still get to stay here rent-free until they evict? Why didn't I find out earlier??!!"
I'd try to get the agreement nullified/voided somehow. Perhaps there was a clause that if they were late X times, the agreement would be void (stuff to check with a lawyer; maybe it's only enforceable AFTER your contract is recorded, maybe you have to send official notices certified mail, etc.). At any rate, if you can start over, that's great.
Now, make the agreement informal, or very carefully worded, but it needs to basically be "pay the amount due for the mortgage by the mortgage due date." If they're late, the bank charges a late fee, no? Well, that's an amount due for the mortgage, it's the bank charging it...it's out of your hands (though a friendly reminder that they're trashing your credit is probably due; do realize that your credit will go to hell with this option, you won't really be concerned but you can act it). If the bank starts to foreclose, not your fault. If the bank evicts, again, not your fault. Hopefully, "the bank" will be the bad guy now, and not you.
You'll lose any equity you had in the house if it's foreclosed (ok, if it sells at auction for a high price, the bank has to give you any actual profit; but in reality this isn't going to happen). Your credit will be trashed for however long this charade lasts (could be a year, could be a couple decades). Oh, and you'll be asked to bail them out financially, you know, so the bank won't foreclose on "their" home. Forgot to mention there's a part two.
You've got to act like you're in financial trouble yourself. Make them scared that you'll ask THEM for money; they'll just think you're too proud to actually ask for help. Shouldn't be too hard, you're already on this site. Ditch cable, sell one/both cars, downsize your own home, bike everywhere, stop going out to eat at fancy restaurants, etc. And don't say you're "saving money" as that conjures images of a big fat bank account (that they can borrow from you at any time). If it comes up, just mention that you just didn't have money in the budget for Option A anymore, so you now go with Option B which is less expensive (they don't have to know that your budget limitations are self-imposed). This could backfire, however, if in the far-off future you're called out on it (say, when you're checking facebook while sipping margaritas on your private island in the Caribbean) just say "I never said I didn't have the money for it, I said it wasn't in our budget; we decided to make some changes in our budget so we could afford to buy this wonderful private island in the Caribbean and a lifetime's supply of margaritas."
Ok, I know...very silly thing to even think about. But if you want to exit out of this and keep a cordial relationship with your family...I don't see an easy way out. They think of this as "their" home and whoever takes it away from them will be the bad guy. To keep this as amicable as possible, they either need to stop thinking of it as "their" home, or someone other than you has to be perceived as the one taking "their" home away from them. The facts may be in your favor, but emotions are going to play a bigger part in how this turns out.