What happens to an Earnest Money Deposit if underwriting falls through?

Question

I paid an Earnest Money Deposit (EMD) on a home purchase to an escrow account setup by real estate agents and later paid the full down payment amount to the title insurance company.

If underwriting of my mortgage does not work out however, would I get the EMD back?

This isn't the case at the moment, but I received a long list of demands from the underwriters after making the down payment and I'm not sure if they can all be satisfied, thus I'd just like to know what would happen in this scenario.

In case it matters, the state is Maryland.

Answer 1

Your Purchase and Sale agreement should have a financing contingency. If it doesn't, your money may be at risk, and the agent did you no favor.

Edit - I answered when away from computer. This is a snapshot of the standard clause from the Greater Boston Real Estate Board. Each state has its own standard documents.

The normal process is to have some level of prequalification, showing a high probability of final approval, make offer, then after it's accepted, this form is part of the purchase and sale process.