Legal Question in Real Estate Law in California

Re: Real Estate Question?

How do you hold title? If the home is owned as community property, and the public records show that, I'd think the loan is invalid and probably cannot be collected.

If title is held as tenants in common, perhaps your husband could lawfully borrow against his part interest, but most legitimate lenders don't make loans on part interests because the collateral is of low value (who would bid on a half interest in a single-family home with a stranger as the other half owner?).

However, there is also a legal requirement that spouses deal with each other (in financial and property matters, at least) in good faith and with openness, honesty and candor. Sneaky borrowing is a breach of this duty, even if the loan itself might be lawful because the collateral is his separate property, or his separate interest in co-owned property.

This is a brief answer to a possibly major topic in your marriage. You should probably make a trip to the County Recorder and get copies of all papers related to this property since it was acquired, then sit down with your own family law attorney and have an initial consultation.

Re: Real Estate Question?

He did already, didn't he? The proper question is what can you do? In a divorce proceeding, such action could result in you getting a set off in the property division, with him owing the money, not you. Right now, that lien on the property exists until paid. It is a community debt because you are married. IF you could show the lender violated the law or rules you might be able to void the lien. That would require expensive litigation. If it is worth it to you, and you're serious about investigating that, contact a local attorney.