Wallen
Wallen v. Fidelity Federal Savings & Loan Ass'n (In re Wallen)
Opinion
Lead Opinion
Ashland, J.
*560 MEMORANDUM OF DECISION
The facts in this case are not in dispute. Debtors (Wallens) purchased a certain piece of residential real property which stood as security for a promissory note executed by the previous owners in favor of Fidelity Federal Savings and Loan Association (Fidelity) as beneficiary, and Gateway Mortgage Corporation, a subsidiary of Fidelity, as Trustee. Fidelity is a private mutual savings and loan chartered under the federal Home Owners’ Loan Act of 1933. This deed of trust contained a “due-on-sale” clause. When the property was transferred to the Wallens without Fidelity’s knowledge or consent, Fidelity declared the entire note to be due and payable pursuant to this clause. When the accelerated balance was not paid, Fidelity caused Gateway to commence foreclosure proceedings. The Wal-lens then filed an action in the state court to enjoin the foreclosure. Subsequently, the Wallens filed for relief under Chapter 13 of the Bankruptcy Reform Act of 1978. This action was removed to the bankruptcy court by Fidelity on August 7, 1981 in accordance with 28 U.S.C. § 1478 and Interim Rule R.7004.