Legal Question in Real Estate Law in California

This is a question that is probably best answered by your escrow holder, or its attorney.

I'd think that the lien is technically extinguished by satisfaction of the underlying indebtedness, but obtaining "paperwork" clearing the lien from title may take longer.

If you are the buyer, you're entitled to receive clear title, and the purpose of escrow is to deliver clear title to you, with any remaining problems (known or unknown) covered (hopefully) by the buyer's title insurance.