Lender pulling a stunt at the last minute

[Brad Crumpton]

A week away from closing on our first rental house.  $79,500 purchase price, 15% down, $67575 loan, and lender is charging an origination fee of $1400 for 30 years fixed at 5% - wife and I are both around 800 credit score with $150k income and $1100 annual payment on our residence.  I pushed back hard on origination fee but she wouldn't budge, saying that there is a 5% rate cap on loans this small and she is eating a bunch of cost to give me this rate on a 30-year.  Shopped 2 other lenders and they couldn't do any better on fee or rate.

Then today...lender calls and says that her boss got turned down on the loan and is not being allowed to eat the $3000 cost to get under the 5% rate.  Says she wants to split the difference and raise our sale price by $1500 to get $1500 cash back at closing to cover it, and they would eat the $1500.  

What are my options?  I have already signed disclosures at the agreed-upon costs.  Are they obligated to close under that arrangement?

I'll never use this lender again, so I'm not super worried about maintaining the relationship, but I do think that switching to another lender now would not yield better results in terms of rate or fee, but would push us to miss our closing date and the seller would likely back out and take my earnest money, as I think they've had other interest.