Not knowing what the contract states regarding if the buyer can not qualify purchase home, in some instances YES. However speak with listing agent where they can explain to you terms of contract. HOWEVER title companies are 3rd party neutral, are governed to oversee terms and conditions of sales purchase contract. More than likely if title company returning the buyers earnest money there must be some clause executed contract which stipulates buyer can receive earnest money returned. Sorry hear about your circumstance GREAT QUESTION.