Calling a Note Due

[Melody Ryles]

We just got an email from the company holding our note. He is calling the note due. Let me go over a few of the fact so people can better help.

The note went into foreclosure about 2 years ago when we got past due but we brought if current with all shortly after that happened (19 months ago).

The taxes are indeed past due but not up for tax sale for 2 years and we usually pay in November. Yes, that is 6 months past due but still there is no tax sale pending.

Since we got current we have never once been more than 15 days past due and we always pay the late fee when we are late.

There is no ARM or balloon payment.

Insurance is current.

When we first got the loan I was working full time as a Realtor and found it best that my name not be on the loan...being self employed and all. We left me off it completely and were able to make the loan based on my husband alone.

The load was refi for 97% of the value. We did default a few months after we got the loan but like I said, brought it current.

The loan is 2.5 years old and we have owned the property for six years. Primary property.

Here is the email we got from the investor.

I am letting you know that we are sending you a letter today calling your

note due. There are several factors, but most importantly the 2007 taxes
remain unpaid as of today, which is a direct violation of your mortgage.
The other factor is because of the fraud on the initial loan application,
and the declining mortgage market, the pay history on the loan since we have
been servicing it, has made it impossible for us to sell the loan. Aspen
Mortgage has been unable to repurchase the loan, and/or make up the proposed
loss in selling the loan on the secondary market. Your property is in
danger of being sold, if not already, at a tax sale. I will be happy to
work with you over a period of time as long as you can make the necessary
payments to both us and the Court Clerk for the taxes

The fraud he is referring to was that we had the house for sale shortly prior to the refi. During the refi it was never up for sale and as you can see, we are still living here today.

He also stated there were some fraud on the lender side but did not share with us what those are since it was the broker and not us that were at fault.

All that is the background for this situation. Even with the past due issues, the past taxes and the broker issues from over two years ago, we are still current on the loan.

He is also aware that we are paying the taxes in November (like we always have).

Because the taxes are past due, I know he can call the loan due and that is fine. But I want to make sure that calling a loan due means that he will need to go thru the foreclosure process? With all that entails.

Would the courts support the foreclosure based on this? By the time we got that far the taxes would be paid but we would owe for 2008.

What should be our formal reply to him once we get his letting in writing?

This is my first post but I have lingered reading in the forums for a while. So I want to thank you in advance for the help you will provide.

Melody