Legal Question in Real Estate Law in California

Re: Can my husband take out an ELOC loan w/out my consent?

While I don't know everything that's going on in your marriage, it would seem to be in your financial interest to stay married if possible. Keep very accurate records so the transactions can be untangled, and your community property interests in the various properties can be proved, if you do become involved in a divorce.

It may be that he views the proposed ELOC of $200K as much less significant than you do, given his high income. But you need marriage and family counseling, from a licensed MFCC or shrink, or from a spiritual counselor, more than you do legal advice right now. Go yourself if he won't go with you. In my experience many lawyers and marriage counselors are overly hasty to recommend a divorce, take all outsider advice with a grain of salt.

Re: Can my husband take out an ELOC loan w/out my consent?

I would doubt that any lender would give him a loan without you cosigning, as a half interest in a house is worth much less than 50% of it fair market value. But aside from the counseling you both clearly need as stated by Mr. Stone, you both need financial counseling. He seems to be spending too much [very high paying jobs can end very quickly]. You and he may have commingled your private funds so that some of it is now community property. It may allow you to relax more if you know precisely how much money you actually have to your name.

Re: Can my husband take out an ELOC loan w/out my consent?

I don't disagree with the previous answers, but this may be a little different slant.

First, you may be misleading yourself by thinking in terms of "his income" and "my income." In a community property state, there is only "our income." Almost always, whatever he brings home, and whatever you bring home, belong to the community, not to the individual earners. Family Code section 760. So, think of yourselves as a couple with a $565K income. That's the way your creditors are looking at it. This general rule has some exceptions, but they are probably inapplicable.

Now, is the home the two of you bought together held as community property, or if not, does the title as recorded show that the co-owners are husband and wife? If so, this is notice to the world that the owners are married and that community property law concerning sales, long term leases or encumbrances requiring both spouses to join in their execution will apply, at least to some portion of the property (Family Code section 1102). A lender with notice of the need for spousal joinder acquires no valid security interest when one spouse alone attempts to encumber the community's interest, although if money is lent that may result in a valid although unsecured debt. If the property is not community property (e.g., is held in joint tenancy or tenancy in common) and the deed does not reflect that the co-owners are married, most lenders would still refuse to do the loan since a half interest in some stranger's house is lousy collateral.

If, however, there already were a properly secured (by a two-signature note and trust deed) but as-yet untapped line of credit for $200K, and one spouse were to draw down the line of credit, the lien would probably be good because both spouses joined in setting up the entire line.

There are many interesting side issues raised by your facts that you should discuss with a family law specialist, and I recommend that you retain one, pre-emptively, for a discussion of the specifics, which are more in the province of family law that real property. One of the topics of discussion should be how your assets and liabilities would be apportioned if you were being divorced as of that moment. Because of the high and increasing community assets, you might emerge unscathed (financially).

Another very important aspect is the extent to which the funds borrowed or proposed to be borrowed are being invested wisely. If each $1 spent on home improvements yields 90c, or $1, or hopefully $1.05, in increased value, this is not nearly so worrisome as if the money borrowed were going into penny stocks, Chateau Lafite, vacations, drugs or gambling. Or other women. Feel fortunate in that respect.