Hope your situation clears speedily with the right people involved.
Although I am not an attorney, if it can't be resolved that way my understanding of contract law is that they require that all parties act in good faith to fulfill their end and it doesn't sound like the sellers did this from your rendition.
If you can't work it out with the brokers involved you will need to speak with a real estate attorney.
Sorry you are going through this - not fun.
Lance King/Owner-Managing Broker
Broker Associate, Paragon Real Estate Group CA DRE 01844627
All data from sources deemed reliable but subject to errors and omissions, and not warranted.
My opinion from your description, your agent (and supervising broker/manager) should have been working with legal counsel long before this point. As soon as the seller's documents were late they should have been getting things lined up to extract you if the other party failed.
The escrow company can't take any action unless it is agreed upon by both parties. It has to remain neutral. Your steps now need to show the other party that cooperation, returning your money or transferring title, is the best and least expensive option. In other words damages when you win your case will far exceed the pittance they are claiming they can keep.
Best of luck to you and sorry for this unfortunate situation.
Was this a short sale? If so, there should be time frames within the contract in which you could get out if they do not perform.
A lot of a contract is good faith, so a real estate attorney is your best bet.