Loan Denial because not having friends

NO FRIENDS            NO LOAN              IS THAT LEGAL?

I had a client, non-U.S. born but U.S. citizen, who had moved from California to Dallas area from his job. He had great income, professional management position and great credit score. He got qualified and purchased his dream home, however, at closing the title company put a form in front of him to write down names, phone numbers and addresses of two family members, relatives, friends that they know him but don’t live him. His family and relatives were all living outside of U.S., he knew a few coworkers in California but did not know their addresses, etc. He signed all other papers, except that page. we went out. Seller supposed to come and sign papers, lender fund and we get notify of closing and get the key. Two hours later, the title company called me and said if my client doesn’t come up with two names and addresses, the lender will not transfer the fund and we will not have closing.

 I got really upset and I don’t think the lender’s request was legitimate. So, if a well qualified U.S. Citizen doesn’t have family, relative or friend to list he will be denied of getting loan? Mortgage lenders should not lend money based on the applicant’s friend names and addresses.

I explained the situation to my client, but he agreed that we both go back to the title company and he put information about two new guys from his new job (with their permissions) in the form and we closed the deal.

To the mortgage lenders, a person's credit score represents his/her likelihood of making on-time mortgage payments for the next couple of years, based on the person’s recent (e.g., last two years or so) payment history. Therefore, it is very important to have a good/excellent credit history and credit score. But having a friend or not, should not affect the applicant’s ability to pay. The mortgage lender should not approve or disapprove clients based on whether or not applicant has family, relatives and friends.

Is that legal?     What do you think?