How do I get my earnest money back?

[James W.]

I was under contract to buy a MLS house in St. Louis, MO but the deal fell through because I was unable to obtain financing. There was a clause in the contract that stated if I was unable to get financing, the deal is scrapped and I will get my $1000 earnest money back.

I was preapproved for the loan but after further review, the loan company decided I took too many deductions in my 2004 taxes and used that against me. I faxed the denial letter from the mortgage broker before the deadline on the contract. The sellers agent claims that I should have known I would not qualify for the loan which is completely untrue.

But the sellers agent and sellers of the house still has not signed for the release of my earnest money. How do I get it back? Do I take him to small claims court?

Please help!