AML requirements are indeed nonsense. It's all governmental regulations with the intent to restrict money laundering, but the impacts are mainly felt by the regular folks. There are numerous instance of banks who flaunt AML requirements till they get caught and slap with a fine. And this are only the ones who get caught.
Perhaps you should have reach out to a mortgage broker as they will be able to help you navigate the process as they know what the banks are looking for. Hopefully now this hurdle is crossed, you both can finally sit down together and enjoy the view :)