Are you saying that you have a contract to purchase a house for $230K and it only appraised for $130K? If a property is that poorly priced, then you must have been working without the services of a buyers rep who would have run the comps, and told you it was wildly overpriced for the current market. Depending on the terms of the contract, your earnest money might be at risk. Not to mention that you probably spent money on an inspection and appraisal. This is why we always recommend working with a professional.
We can't render any legal opinion here. However, if you don't have your own realtor, you need the advice of a real estate attorney. Also, what is your loan officer telling you?
Good luck, you'll need it.
Licensed Mortgage Loan Officer