Hi There...
Let me see if I can help..I have 25 years of experience in title and escrow.
If the "open" loan was paid off with the proceeds of a refinance...the title company that you are working with now, can contact the title company that was suppose to pay it in full (and obviously did). That title company can issue what is called a "letter of indemnity, known as an LOI in the title business. The means that the title company that paid off that open loan tells the new title company that the lien is clear and that they will indenify and protect the new title company from any resulting litigation.
Hope this helps...I know it can be a little confusing.
If I can help...drop me an email --

Call Nora Farrell at Provident Title. 800 247 4970. Tell her the problem and see if she can help you resolve this. Or if you still have your loan documents from back then you will see who the title company is and you can call them directly. In any case it is an issue of the deed not being reconveyed (or shown as paid off by the lender.) It can be resolved relatively easily.

Good luck,

Contact the lender from 1989. A reconveyance needs to be recorded. This is a title issue and your title rep can help.