Hello and welcome! My name is ***** ***** I am an attorney who will try my very best to help with your situation or get you to someone who can. There may be a slight delay in my responses as I research statutes or ordinances and type out an answer or reply, but rest assured, I am working on your question.
I am sorry you are dealing with this situation. Unfortunately I do not always get to give good news when answering questions on this website. Buying a short sale is very risky and the buyer has little to no recourse when the transaction does not close. If a lender/bank decides to cancel the deal (which I have seen on the day of closing) the buyer is left with all the expenses and fees associated with the inspections, appraisals, etc.....
A short sale is not a traditional transaction where a buyer has a potential to sue the seller for specific performance and therefore can be left with many out of pocket expenses without the ability to recover their costs other than return of their earnest money.
I am very sorry this has happened to you and certainly understand your frustration. You can always file a complaint with the Consumer Financial Protection Bureau: http://www.consumerfinance.gov/. While this will not get your costs returned but the CFPB will investigate and may issue a fine based on enough consumer complaints.
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