Lender attempting denial due to impending retirement of cosigner

[Brian H.]

Sorry for the jumbled title.

Anywho,  I have a property under contract.  The buyer has her father as a cosigner.  Inspection has passed, all good. We were basically just waiting to close on June 17.  

Maybe some of you haven't heard this one before!

The lender suddenly came across the knowledge that the father/cosigner retires officially two days before close of the sale.  Now they tried to deny the loan but then when pushed back said at very least they must wait to see his first retirement income check.  That would push closing out another 4 - 6 weeks.  

I told my agent I want them to cover the mortgage payment that will come due if this is happening.  Is that fair enough?  My agent said she felt like it just made since to finish this deal with them as we could end up sitting and waiting for another deal that may not even net me as much.  

I am happy with what I will net with this buyer but is it still the smart move to terminate and move on or should I just wait?  

There is also the soft heart aspect of this for me, where the buyer is a single mother with two children and this will be her first house.  So, the other part of me says just stick it out so they can get their first home... which I am ok with I think. 

Just wanted to see what others would do in general, regardless of what I decide.  Always love hearing other ideas/opinions/experiences.