I am in processing to buy the first home and it is the bank owned property. When the due day for closing almost come, the seller ( lisbosa realty) told my realtor that title prob raising and needed to be clear with unknown when it is done. They sent me a amended form that asked for extension on closing day 20 days later from the first due day ( 07/20). We accepted it and sign the form. However, after we sent the form, my realtor told me that we should request to release a deposit back because the seller canceled the listing ( that I don't understand what she talked about) and she said the seller don't want to keep my deposit since title is not clear. And very much she want us to take money back and walk away while I really want to wait for the seller to clear the title because we love that house. Who can please tell me what is a trick or problem in here?

Sounds like the seller is pulling the listing because they can't provide clear title. I would suspect that your contract states that the contract can be voided if they can't provide clear title. So you have little choice in the matter unless the seller is willing to keep the listing alive.

Yes, bank has it due to a foreclosure, most likely there is a title issue and they do not have a current clear title to sell.

So they will not be selling it to you. So you take the money back and start looking for another house.