Find another lender
There actually are such problems as the OP describes. I’ve done work on MERS transfers (Mortgage Electronic Registration System) that would chill your blood. MERS has its hoofprints on a lot of mortgages in this country. (See, for example: https://www.totalmortgage.com/blog/mortgage-rates/mers-mortgage-transfers-deemed-illegal-by-federal-judge/10184 )
And yet, I tend to agree with your advice: find another lender. Only I’d make it a private lender. Banks are the worst way to get money (after marrying for it). They’ll always find a last-minute reason to squeeze you and torpedo the deal.