underwriter didnt approve of condo i can't my $1000 dept back

i live in california, and back in the begining of september i put the $1000 deposit down to buy a condo. when i originally looked the place over the seller mentioned that there was some litigation with the home owners association and a contractor and is soon to be settled. i figured that my real estate agent would go over exactly what the type litigation was taking place since she said she would handle all of the paper work. well when it came time for the underwriter to approve my loan for that paticular condo they wouldn't do it and i don't blame them, because i found that there might be a $20,000 assesment towards the condo if the ruling went aginst the H.O.A. so after putting down the $1000 deposit & $290 for a home inspection i can't get any answers about getting my $1000 back from my real estate company. i filled out the paper work but they said that the sellers are upset, and the money is being held by the title company. i feel that this is all my agents fault, because she should have looked into the litigation and found exactly what was going, this is her job. common sense says that no underwiter would approve a loan on property facing a $20,000 assesment.it has now been over 2 months and i don't know what to do, please help thank you.

[HomeGuru]

If your contract contained a contingency that the purchase was subject to financing, then you should get your deposit back. Send a demand letter to escrow to release the money.