To make sure that I am understanding this correctly: Did the contract expiration date go by while the sellers were waiting for the buyer to arrange their 2nd try at financing?

If so, then technically your contract is no longer valid and it is within the seller's rights to renegotiate the contract, including some type of non-refundable earnest money that they could use for whatever purpose they see fit.

In practice, this would be very unusual and it wouldn't be unreasonable for the buyer to simply refuse this request, especially if they are prepared to walk away from the deal.

If the contract has NOT expired and there was nothing addressed in the original contract regarding this situation, it just sounds like a a strange way to milk the buyer.

We'd need more details in order to answer your question and of course, you should always contact an attorney in any kind of contract dispute.

Check the Purchase and Sale Agreement for any penalty payments that the buyer agreed to if closing did not occur within the specified time. This is not unusual for the buyer to pay a penalty for this type of scenario but it must be in the Purchase and Sale Agreement or an addendum to the contract.