Americorp Real Estate
Brokers Associate, e-PRO
The excuse that the bank took the property over all makes no sense. Banks do not move forward with foreclosure proceddings while simultatenously trying to negotiate a short sale. In fact, they are forbidden from doing so and when a short sale negotiation is under way everything else stops.
Definitely contact your lawyer immediately and be prepared to stand up for yourself as it sounds like this deal was an unorganized mess by all the profesionals involved.
Assuming you reached agreement and the check was deposited into an escrow account by the listing broker, and now your purchase is not moving forward, you are entitled to get that money back.
As the broker mentioned below, in order for it to be released, both the buyer and the seller need to sign a release form. Once signed, the listing broker should process the request and return the funds to you. If the broker cannot find the seller to get a signature on the form, you are in a bit of a pickle. At that point, I would call your real estate attorney and ask for a suggestion regarding next steps. Unfortunately the cost to compel someone to sign the release may be more than the amount of your initial earnest money check.
Best of luck,
The owner of the property and that agent should have the loan # and can call the bank using that number to find the status.