I would suggest continuing with the close, then start paying off the mortgage early.

I would have pushed it through and let him pay off part of the loan with this late arriving pile of cash that he is offering

It is too late to change the original mortgage amount without a delayed settlement. The easy solution is to make additional principal payments when he makes payments and his mortage will be paid off more quickly.

You are the loan officer, right? I'm a real estate agent so if it was my client I'd let him know any change this late will delay closing and under standard terms of our contracts risk losing the deal. 

Did the buyer not approve the HUD-1? To wait to the last minute like this is a major problem. Good luck!

That should mean he wants to borrow LESS which should be less of a problem than taking the down payment back and having to borrow MORE.

But ten minutes! Add up what the cost TO HIM will be for missing the closing date. After all, the SELLER will want compensation for all of their expenses and if there is a back up, the outcome could be unfortunate for this buyer.

We would hope the buyer stays the course as spelled out in all earlier commitments.

tell them to do it after closing!

I would say it is too late you are closing in 10 minutes.  Take your extra money and pay down your principle every month.

Get with the lender and see what they can do to help.

Are you an agent or a loan officer?  If your an agent turn him over to his loan officer and title company.

The train has left the station. And with TRID coming Oct. 3rd  that will not happen.

If the loan officer could get it done great...otherwise I would till hime to put it on the first payment

try and talk some sense into him/her and continue the way it was set and agreed upon.

Hit him over the head (!) No really. I would remind the buyer of the contractual obligations, particularly the timelines. I would also remind the buyer that they can pay down the principal on most mortgages. Starting over would delay the process, cost money, and possibly lose the transaction.

Unless he was going to change to 20% down I don't see any reason to do so. A tax advisor would likely advise the same. Where can you go and borrow money at a 4% rate for the long haul?