First of all, I don't know how the verbiage on the contract is written in reference to the mortgage contingency. However, based on your statement, you did not remove the contingency on time per the contract and therefore, it is still in place?
If this is the case, then you have the right to get the EMD back as you have not breached the contract.
Also, it is my understanding that the seller can't sell the house if it is still under legal binding contract--which is your contract with the seller-- unless a release has been signed by both parties.
Consult an attorney as this is not a legal advice. Just my opinion.
Since you didn't remove the loan contingency in writing, it is still in effect. The loan contingency is not passive - it HAS to be removed in writing on the Contingency Removal form. Have your Realtor (or their Broker) remind the listing agent (or their Broker) that the contingency is still in effect and you are therefore not in breach of contract and you should get your EMD back since you can no longer obtain funding/loan. If that doesn't work, contact a Real Estate Attorney (which you may want to do anyway).