It is immaterial that the Note is paid or the Deed of Trust released. The marriage and divorces are probably immaterial, as long as the former spouses didn't retain any interests. Once he gave a joint tenancy to his daughter, she almost surely became vested in it. He can't simply undo this. The property is titled as it was transferred. It will need to be re-deeded from its current owners to the intended new owners.
That said, if the grant was for testamentary purposes and not to grant a present interest, there is some argument suggesting that this might be fixed without the consent of the second daughter. The case will be expensive and risky. The usual way to fund this kind of litigation is through selling the property and arguing about the distribution of proceeds.
This is another good example, perhaps, that saving money on lawyer fees for something as simple as a re-deeding of property can be the most expensive thing a lay person can do. Pay me now... or, pay me (much more) later.
However, with some luck and some wisdom, it might be possible for a competent lawyer to negotiate a way out of this.
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In NY it would be useful if the parties to be removed from the deed executed what is called a quit claim deed wherein that party quits all claim to the property under the deed. That may not be quite the same case in DC. Consult with a local real estate and/or estate planning attorney and you may also get some help from the county records clerk.
This is not intended as legal advice but as educational information only. One should seek independent legal counsel.
He cannot remove his daughter from ownership of the property himself. The daughter has to agree to be removed and sign a deed transferring title to her father and half sister. If done properly, it can be accomplished without paying transfer taxes.
I would suggest that your father contact an attorney for assistance.