Legal Question in Real Estate Law in California

I'm assuming the co-owners own the property as joint tenants or as tenants in common. If the co-ownership is as community property or partnership property, the answer may be different.

A co-owner can borrow against his or her partial interest only. A co-owner cannot encumber the other co-owner's interest. Therefore, if the house is worth $200,000 and each co-owner has a half interest, the maximum either can borrow, acting alone, is $100,000.

That $100,000 is a theoretical ceiling. As a practical matter, no lender wants half a house as collateral. Can you imagine trying to foreclose on a half interest? Who would buy it?

So, as a practical, real-world matter, there are very few lenders that would be willing to make any kind of loan based on taking a half interest as security. Maybe a private lender who was a friend and very trusting....but for practical purposes, it would be more of a personal, unsecured loan than a real estate mortgage.

No, the other party cannot be removed from ownership through actions you take. The other owner can be removed from ownership by their signing a deed, a court order issued after trial (e.g., a successful quiet title action or partition suit), or death.

I agree with Mr. Whipple. In my experience, institutional lenders will never lend with only one person on title encumbering the property. In all of the loans that I have seen, these situations were done by private parties as lenders (called "hard money" lenders) or they resulted from an error during an owner carry back.