Earnest deposit not being returned - NJ

[Gurpal Cheema]

Hi BP,

Need your advise on this.

I recently decided to buy a 2 family forclosed house in North Jersey. Signed the contract and put a $2500 earnest deposit down. Also spent another $700 on inspection, tank sweep and appraisal. Everything was going smooth until my lender denied my loan application. Understand things happen. So we decided to terminate the contract due to lender denial. Seller is refusing to accept the termination, even a letter from the lender was attached to the termination. So the seller decided to keep my deposit of $2500. This doesn't make sense to me. The contract clearly says "In the event of proper termination of the agreement under this paragraph, the earnest money deposit shall be returned to the Purchaser". My attorney is frustrated by this process and giving up on me. How can I get my money back?

Appreciate your help in advance.