Beyond annoyed in Rocky Point, NY
The seller will run into the same issue with any purchaser coming in with a mortgage contingency.
Cool minds will be able to resolve the impass.
This is a classic example of a mexican standoff...where nobody wins. You clearly have an attorney for the seller that is unable to explain to his/her client that they are responsible for getting this done - because you're getting a mortgage. Dumb seller attorney will talk about "as is" or stupid stuff like this, but in your contract i'm sure it says that the seller must deliver a home that is mortgageable.
Talk with your attorney - that's it. No one on here can help you.
In a perfect world, yes, c/o's are the responsibility of the seller, but we don't live in that world.
What you might consider is working out a DEAL. If you want to get this done - offer to offset some of the expenses of the seller. split it with them. what the heck.
The house needs to come with a C of O when you purchase it in order to gain clear title.
Your attorney can have a discussion with their attorney or your Realtor with their Realtor. Somebody involved with this deal needs to take control of the situation.