Fannie Mae is denying request for refund on earnest deposit

[Alicia Miller]

Hi BP! I need your advice. I put down a $5k deposit on a Fannie Mae owned property and they do not want to refund it. It's my first investment property and the plan was to purchase with FHA, renovate, occupy, and sell in a year. I was working out of state temporarily and set to return a month after closing.

The week of closing, my employer informed me they had to cancel my temporary contract and I either had to work in the out-of-state office permanently or be laid off. I told them I would stay. Long story short the underwriter found out and denied my mortgage at the 11th hour. 

We scrambled to find another way to finance and Fannie Mae granted an extension for hard money. I ended up being denied for the hard money loan as well so we had to cancel the contract.

Fannie Mae is claiming that because the loan commitment date was passed, and they granted an extension for the 2nd loan, it is their policy not to refund the earnest deposit. 

My realtor is adamant I should be refunded. I briefly spoke to an attorney but would prefer to resolve this without taking it to court. Anybody have experience with this? 

ps. Fannie Mae SOLD the property last month and are still holding my deposit in escrow. I've been told that's possibly illegal? 

Thank you in advance!