My wife and I are buying the house we've rented for 2 years. Got an FHA loan, got the appraisal rushed, everything in place to close on Tuesday, when the contract of sale expires. My wife and I hyphenated our last names when we married. The lender verified her last name, and never had it wrong, but apparently used my birth name for EVERYTHING. Every single time they said my name, while being recorded, I corrected my last name. The underwriter saw my name when they pulled my credit. The application was filed as my married name. They said for the internal documents it shouldn't be an issue, but for the FHA records they needed to correct it. I suggested we correct the mortgage insurance cert after we close, and in the meantime I sign as my birth name, as FHA allows for correction of names, for which I still have my passport that has my birth name and is not expired for ID. They seem to be insistent that it would have to either be an at closing condition, or we'd have to delay the closing, which isn't an option, as the seller doesn't want to extend.

My questions are:

Does this even present any actual issues?

If so, can I just use my passport and sign as birth name? I figure if they verify it's actually me signing it, it's not fraudulent.

If this falls through because of them, do I have any recourse, as this is 1000% their fault?

Thanks!