Is the seller refusing to sign a Promissory Note? From what I've seen, some lenders who have PMI protection will allow a property to foreclose unless the Seller(s) signs an agreement to repay part of the loss on the sale.
Ask your Realtor to clarify what is going on and why your offer was rejected.
Hope this help.
PS the previous answers are correct, if the house forecloses then it may be a long time before it comes back on the market and you will compete with other buyers and may sell for higher than you are willing to offer.