My question involves real estate located in the State of: California
I am buying a house and its in the process of being completed. The loan is approved and money is transfered to the escrow company already. But suddenly today the escrow company told me that I must pay $3000 to a collection agency or they won't complete the escrow. The escrow company said the collection agency can place a lien on the house.
The $3000 debt is from an account with last payment date of 2001 August. I am in California and it is obviously past the SOL. The escrow company says I need to get a cashier's check in that amount payable to the escrow company and then after the escrow is completed, they will forward the $3000 to the collection agency.
I am in a bind because if I don't pay the $3000, the escrow company will cancel the escrow and I'll be responsible for losing the deposit, all fees, etc.
1. Do the escrow company have the authority to force me to clear this debt?
2. How can the collection agency or the creditor still collect on this debt when it's past the SOL? How can they place a lien on my house for this debt?
What should I do in this situation?