Read the approval letter for the conditions still outstanding at the time the approval was given. It is likely that there are "outs" there, such as appraisal value, final underwriting etc. You might want to try another attorney so that you can put your mind at ease. If the appraisal was not done prior to the letter then the appraisal would have been a condition; the bank will not lend on a property that comes in lower than selling price. Yes, you are right to assume you should have been consulted prior to the deposit being sent back and you should have signed off on the rescission of the deal. Make sure the attorney you use is a real estate attorney, not just an attorney. It makes a difference when a glitch comes up in the sale. Best of luck on finding another buyer. Maybe you should hire a Realtor to save you some stress.