First Home Purchase | Stalled Deal | Seeking Experienced Advice

Hello BP Community,

I am currently in the process of purchasing my first home (duplex, 1 side is renter occupied) on an FHA loan in Vancouver, Washington.

I have paid my earnest money

I was initially given a closing date of April 24th, this date has now passed because the seller needed to do 2 more repairs to pass inspection, after the repairs were completed no further updates have been given to me for a new closing date.

After the April 24th date passed my real estate agent sent me a lease out the blue with no explanation so I can rent the property while the deal is going through. The lease spells out occupancy from April 26t to May 8th. I am currently living in the space as a non paying renter.

I got curious and googled the current owner and found out that the state of Oregon has a litigation case against him, his wife, his company and his business partner.

This case was never disclosed to me prior to starting this home purchase.

My questions to the community are....

What rights do I have to now back out of the deal?

Will I lose my earnest money if I decide to nix the deal?

How do I confirm that the legal case against the owner prevents him from potentially selling the property?

How much is my real estate agent at fault for not disclosing, or does this fall on the sellers real estate agent?

In the seller disclosure statement improved property document when asked

A. Do you have legal authority to sell the property? If no, please explain..

The owner answered YES

If I find that the State of Oregon prevents the owner from selling the property can I use this as a reason to back out of the deal without losing anything financially?

How do I find out if the State of Oregon is preventing the seller from selling the home?

Thank you all in advance, I realize there is a lot to digest here but any information you can provide will be helpful.