My mortgage company sold my loan and told us it was paid. Now 14 months later the new note holder is making contact and wants a lump sum payment or face eviction in 15 days.
This is the first contact they have made since obtaining the note. What can I do to save the house.

Contact an attorney now, it sounds like the sold the right to the promissory note and your should have been notified to where the payment was to be sent.

Call an attorney now.

Do you have any documentation of the advice from the former lender? Did you have a good payment record before the sale? Did you get a release of the lien? What was the term of the loan, at what point were you in the term when it was sold? What was the principal balance?

I would write to the new lender and tell them (certified return receipt and make copies);

1) We were informed by the previous lender thet the loan was paid, which is why we stopped paying on it.
2) We received no contact from you that payments were still due or where to send them
3) We are willing to work out a reasonable increase in the monthly payments to pay the arrears.
4) If this is unsatisfactory then file eviction proceedings and we will fight it in court.

Now whether you will win in court is dependent on the answer to the questions I asked above. For example, If you had a 30 year mortgage and you were in year 15, then its not reasonable to think the loan was paid off. But if it was in year 28, then it might be more reasonable. However, if you have documentation to prove the previous lender told you this, then you should win.

You should consult an attorney, but you may not need one untoil you get a summons about an eviction or foreclosue hearing.