It would come down to whether it was a gift or a loan.
If it was a gift, then there would be no repayment issue.
If it was a loan, then one would need to pay the money back or the lender can sue. Oral and written contracts to lend money are enforceable, but the party suing (the plaintiff) has the burden of proof. So it would come down to whether the judge believed it was in fact a loan or gift.
The lender cannot claim any right to the house, as that is only allowed for "secured creditors" - ie when the house is put up as collateral, and that requires the signing and recording of the document with the county recorder.
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