Legal Question in Real Estate Law in California

There are at least two ways, maybe three.

The first assumes she will cooperate, and that is to negotiate a buy-out. Ideally, she will buy you out for one-half of the net equity in the house, and the lender will re-write the loan to take your name off as a co-borrower. Some lenders will do this, although they may charge a fee. Somewhat less ideally, she will sell her half to you, and then (if you don't want the property) you turn around and sell it and pay off the loan. Obviously, this method is not assured of success, as it requires either that someone pay off the loan or that the lender is willing to take someone off the loan, and it requires the two of you to agree that one will be a buyer and the other a seller.

In the more likely situation that the cooperation necessary to pull off method one is simply not in the cards, your #2 method is a lawsuit for partition of the property. A partition suit is a two-step process. First, the court decides the plaintiff's right to have the property partitioned and orders it to happen - in modern times, usually by sale and division of the net proceeds, rather than splitting the farm. After a sale takes place, the parties return to court for a final decree divvying up the net proceeds according to evidence of what's fair.

A third possible method is to simply move out and stop making any payments, and see if sister keeps up the payments, sells it, or lets it go into foreclosure. There are obvious drawbacks to method #3, including harm to your credit rating, but there may be sets of circumstances where this would be absolutely the best thing to do.

Choosing a withdrawal method depends upon many facts you didn't mention, including whether there is net equity in the house or it is "under water," and in either case, how much; whether the house was bought as a primary residence and the current financing is purchase money vs. the house being an investment and/or the loan being a refi. Your personal finances (and your sister's) would also be a factor, and also your ages and whether either or both of you reside in the house, and for how long.

Finally, I note a tendency for bringing a partition lawsuit to result in out-of-court settlements by making the defendant more interested in negotiating than she was before being sued.

The lender is not going to let you off the loan until it's paid or refinanced. The best solution is for you and your sister to agree to sell. If you can't agree, there is a legal proceeding called a partition action in which a court issues orders to divide the interests in the property. In your situation, the most likely order would be that the property be sold and the proceeds allocated between you and your sister.

You don't get off the loan just because you want to. You remain liable until it is paid off. Unless you two can work it out, you could file a partition lawsuit to force division or sale of the property. If it is worth it to you, and you're serious about spending the fees and costs to do so, feel free to contact me. We may be able to negotiate a resolution without having to sue.