Not sure what the NJ contract says but in FL the verbiage is "Buyer shall make mortgage loan application within 5 days after Effective Date""If Buyer does not receive Loan Commitment by Loan Commitment Date, then either party may cancel this Contract "If you have not provided a Loan Commitment (this is different from a prequalification), you should be able to cancel without forfeiting your EMD.If you are fine with forfeiting your EMD then you can cancel without using contingencies.

I expect him to say that he's out and that he will forfeit the deposit voluntarily.

@Wade Garrett most likely you would need to forfeit out of their security deposit after they vacate 

Does your lease not stating that by breaking the lease you automatically forfeit your security deposit?

They both have back taxes that were forfeited too. 

HUD allows a 15 day inspection period although the investor forfeits their $500 or $1000 EM if they terminate.  

Mine says if you break the lease you forfeit the sec dep. you can either be taken to court for the vacancy loss I incur (which could be a while in the winter) or pay 2 months rent and your obligation has been met and we can no longer take you to court.

If they take a 1% asset management fee on a large raise of around $50M they're basically forfeiting their fee if they don't hit certain return metrics.  

Some purchasers might rather forfeit their earnest money than proceed with a closing after discovering an unacceptable condition.Second, the purchaser will generally be asked to pay some amount of daily rental for use, occupancy and expenses.

I understand that the premium is forfeited after 5 years from the date of the lien sale if the holder doesn't foreclose or the owner doesn't redeem.