The "lost swords" were 12 swords forged by the gods long ago, before the world ever contained life. 
For a more detailed description of creation, read the Tale of Creation.

The lost swords were believed by everyone, including the heroes and herroines of Caanaras, to be 
nothing but legend until a black cloaked figure bearing one of the swords themselves
came and requested their help in finding the other 11. 

Jom and Serenla set out and recovered Mindsword,
selling it to Mephetis for a hefty 25 platinum.

Zepheria and Ariel set out and recovered Doomgiver.

Zeph and Jom recovered Coinspinner, Dragonslicer, Stonecutter and Woundhealer.

Oskar recovered Wayfinder and gave it to Jom who accidentally gave it to Rastlin.

Wood has Shieldbreaker

Rastlin killed Mephetis and added Townsaver and Mindsword to his collection already of Soulcutter and Wayfinder.

So currently:
Rastlin (4): Townsaver, Wayfinder, Mindsword, Soulcutter
Zepheria (3): Woundhealer, Sightblinder, Dragonslicer
Wood (1): Shielbreaker
Jom (1): Stonecutter

Coinspinner is missing and Doomgiver is destroyed

As more swords are found and used by PC's, their respective links will be opened.