[quote=Eugene]
I don’t see anything here to suggest that ex-wife’s parents have the right to foreclose, as long as you’re paying as usual, unless there’s some kind of agreement between you and ex-wife’s parents that we were’t told about yet.[/quote]

After receiving the letter from their lawyer (informing me that they would foreclose if I fail to pay off the debt by September 2011), I called my ex-wife’s mom and she told me that the note clearly specifies that the $200K must be paid by September 3rd and that they gave us a 5-year loan.
The whole part in the “Straight (Balloon) Note” section of the note completely confuses me.