That's an interesting question.  I would treat it as a sale, with the 1099 as proceeds.  She didn't get her interest in the property back, did she?   But when did the foreclosure happen?  Before 2020?  And what, if anything, did she report on her tax return that year?  And has the entire case settled yet?  Did her brother pay her anything?  The notary who witnessed the forged signature?