Title insurance is important but not relevant to this situation. She took out the second mortgage and did not get any documentation that it was forgiven so it was legitimate and still valid. Verbal statements about real property are worthless.
Thanks for clarifying.
ALWAYS get everything in WRITING.
Unless verified in writing. A registered notice to the party who made the statement that "you said that this (include specifics) loan had been forgiven" must be responded to or it becomes binding. But the trick is to be sure that the party receiving the communication has the authority to respond. Layers of management may insulate them.