Will I lose my earnest money here?

[James Smith]

I live in California, and I am currently experiencing something that is freaking me out. My lender is being very slow and has not ordered an appraisal yet. I am out of my contingency period and have been given the notice to perform. All contingency other than appraisal has been dropped. The seller is threatening to cancel escrow and sue me for the earnest money.

Can they actually do this? What is the next step that I should do? Any help will be greatly appreciated.