Erik,The best answer I've heard yet is that if a lien is affecting title, that's going to be what causes an issue.
The "best answer" is the answer.
Unless OP finds a lender willing to take a junior position, or, the valid consensual mortgage lien is released, OP is not going to get the financing she seeks. OP needs to pay off that second in the process of refinancing just like most folks do. She has sufficient equity to accomplish this. Unless she is willing to go down the ill-advised and rarely (if ever) successful "show me the note" arguments in court she needs to face the reality that she owes a second mortgage.
While I am curious to see if some other approach actually works, I truly doubt it. Pay the amount due or try to buy the lien release for something less. The second approach is probably a non-starter as OP waited way too long to face the 2nd. With the equity OP states there is, the 2nd has no incentive to negotiate.