First and foremost, your friend (the buyer) needs to talk with their Realtor ASAP. If the buyer has NOT removed their loan contingency and they are no longer eligible to secure a mortgage (which they cannot without all of their collective income) the buyer should be get out of the transaction on that contingency.
If they have removed the loan contingency and / or all other contingencies, they may have some difficulty. The most important thing is for the buyers to communicate with their Realtor because their agent has all the facts in front of them and will know the demeanor of the seller's agent and the seller.
In this economy, these things happen and communication is the ultimate tool in mitigating legal issues and losses. In the best of circumstances, the seller may have another buyer waiting as a back-up offer. The buyer may lose their deposit or even up to 3% of the purchase price if that money is already in escrow.
Best to talk to the Realtor and possibly an Attorney - Realtors cannot provide legal advice.
Best of luck !
Century 21 Beachside
If they default on the loan it we be more difficult to buy later.
They should do their best to make a couple of payments. Most of the banks will revisit your mortgage if you get three months behind but you have to have a job. They will try to work with them but they must have jobs.
Sorry to hear about her circumstances. If the home has NOT closed escrow, she might be able to get out of the transaction. She may end up loosing her deposit, but she has to weigh that with a foreclosure on her record. If you are working with an agent, please get together with him/her and the lender for alternatives.
It is professional curtesy to do the right thing. Doctors and nurses have a code so do we. It is not about commissions it is about service. If more agents followed your advice many of the problems we have with our housing industry may have been avoided.