Seller 'redefining' closing costs?

[Rob A.]

I am 99% of the way through a deal, closing on Monday (today is Thurs)... but the seller just pulled something I have not seen before:

We negotiated that the seller paid 12k towards "Closing costs and Pre-paids"

They are now saying that they will only cover 9k, the difference is that the taxes for the year were already paid by the seller and therefor we are paying them back the balance and they don't consider that a pre-paid. Our lender is fighting them and said they have never seen anyone try this... they do sometimes try to exclude pre-paids, but that that is why we were specific in our negotiation about that.

Searching around I could not find anything on this, the original 12k was not even going to cover everything and we still had to bring about 3k more to the table...

Advice would appreciated. Oh, and this is a Homepath loan, just FYI.

Thanks,
Rob