What?
What was your Realtor doing?
In this present economy it is very common to have buyer's produce proof of funds in order to have their offer accepted. Normally it is customary for the final deposit to be due in X number of days prior to closing

You are in NY, did you have an attorney handle the closing?

Ralph is right, normally your lender will verify sufficient funds to close before giving final loan clearance and setting the closing. Now, if you inexplicably blew the money and couldn't/wouldn't close then the seller could hold YOU in breach of contract and sue you. They could also be entitled to keep any earnest money deposits you've given.

Quite frankly your question disturbs me because it sounds like there is some dishonesty going on there.

In order to get a bank commitment, they must put down the initial part of the down payment.

I have experienced transactions that have gone through a couple of closing dates without the buyer being able to close. The seller kept the down payment (or in some cases, some of the down payment) but has lost the time spent in contract (no longer visible as "on the market" to the rest of the buyers) and had to start over again.

It is hopeful that the down payment retained by the seller can make up for the $ lost by the declining market.

Before giving final clearance to close, the bank usually wants to know that all the monies that are necessary to close are in place. They usually ask for bank statements where the down payment is deposited and even ask where the money came from if it's been in the account for only a short time. This particular situation has never happened to me but I guess it could.