We bought property 2 years ago and are seller financed. We went through a normal closing with realtor, and we also make our payments to an escrow comp.
We are currently doing a refinance through a bank. We found out that the original loan for multiple parcels still has the deed to. If we can't get their bank to do a partial release on our parcel could we lose our property? What does this mean for us? In Washington state

I assume when you bought the property you also purchased title insurance. Dig out your policy, call your title insurance company and file a claim with them. They will have to clean it up and it should be at no cost to you.

Situations like this are exactly why people buy title insurance when they buy property.

Thank you! I do believe we do, but Ill have to look. The problem is that the original loan is not paid off. My parcel is in with 300 acres. Would title insurance still cover me if they defaulted on their loan?

When you paid for the property at closing, part of the money you paid should have been given to the lender as a partial payoff of the loan in order to release your parcel from the loan. That should have been a condition in the title search and it should have been handled by whoever closed the transaction. If the title company issued the title insurance policy after the closing without confirming that your parcel was released then they are responsible for getting your parcel released.

More than likely, whoever handled the closing never got around to getting the partial release recorded. Your title company will be able to clear that up.