Advice on paragraph of the FHA Financing Addendum I

[Gargi D.]

I was to purchase a condo in Washington DC this month. I had a pre-occupancy contract which expired the day before the FHA certification and financing. The contract ended as it was to be the settlement. The settlement was postponded to Middle of Oct 2013. Seller/agent did inform me of the right to retract my purchase contract. Well two days later I was informed that the financing was not granted as I have defaulted on credit card after signing the contract for purchase. Now the seller is saying they want all the Deposit because of this clause:

paragraph of the FHA Financing Addendum I :

"The FHA addendum states (4) Buyer will be in Default even if the Financing Contingency has not been removed if Settlement does not occur on Settlement Date as a result of any of the following actions by Buyer: (g) Does or fails to do any act following the Date of Ratification that prevents Buyer from completing Settlement."

My act was totally a slip. What does this mean? I will actually have to give up my Deposit even if this was totally unintentional?