My dad just had a similar problem - here is what happened.

He gave a mortgage through his attorney - the attorney also is a client of a certain title company and therefore had his own forms with the title company letterhead (and title policy numbers!). He provided my dad with the policy and later on my dad found out that he never sent it to the title company! In other words, he goofed! Low and behold, the title was not clear and now neither the attorney nor the title company will make good on it! Sure, he could sue....but that takes a lot of time and money.
Buyer beware. Don't gloss over real estate documents. Double check everything.

It's not the title insurance company directly, its the closing attorney in RI that will discharge mortgages. Unfortunately it's not rare that this happens. As a real estate broker/owner, I will always ask my clients what the situation is so that I can stay on top of the lawyer handling the closing. That's my job, to make sure my clients are getting the best representation and to sell the property for the highest price in the shortest amount of time. Where's New Germany?

Katie
I do not know the custom in your area (disclaimer).
However, during the title and escrow process this certainly should have been addressed.
I would give the responsible entity a chance to correct their mistake, then see a real estate attorney.
Keith

I would hope that it is merely an oversight and that when you contact they title insurance company, they will correct their mistake. Otherwise, you need to seek the advice of an attorney.