Unfortunately, there is not an easy answer to this one. The answer is dependent on the terms of the contract you signed with the bank; whether you gave proper and timely notice of cancellation to the bank and/or title company; which institution was holding your earnest money; and what your stepmother did or didn't do on your behalf to request return of the earnest money. When you chose to cancel the contract, that cancellation may not have been properly carried out, or it may have been contrary to the contract terms. Speaking generally about real estate contracts in Texas: when you have the right to cancel a contract, you must submit to the Seller in a writing (with your signature) a notice of cancellation, along with a written and signed request for the earnest money to be returned (this second document is sent also to the Title Company). Given the number of questions you have right now, it sounds like you may not have been given a clear and full understanding of your rights and responsibilities when you signed the contract; if you were represented by an agent, your agent should have diligently worked to keep you informed and to protect your interests throughout the purchase process.
If you want to resolve this matter, you will very likely need a real estate attorney to review the contract and all related documentation to help determine if anything was improperly handled. Keep in mind, however, that attorneys are not cheap! It may not be worth the cost to involve a legal professional- it's really up to you. Please let me know if you need any referrals for real estate attorneys.
David Companik, Keller Williams Realty The Woodlands