It depends on who is holding the escrow. Is it the sellers attorney, your attorney or the Bank?
If it is either attorney, it will be explained in the escrow agreement between the Attorneys. If the issue is resolved within a specified time, the seller gets the money. If it is not, then the buyer gets the money.
If the Bank is holding the escrow; depending on the Bank and again how the escrow agreement is written. If the problem is not resolved, it will go towards the principal of the mortgage. If the problem is resolved it will be released to which ever party put up the escrow.
But all of this should be explained by your attorney.
Kathryn Lilly, Broker
Realty on the Greene, LLC