I was going to purchase a house in Virginia Beach. The house is a foreclosure with new carpet. Upon completion of the home inspection general items like rotted wood around the rear door was noted, the termite inspector also noted active termites in the garage. We negotiated with the bank to have the door replaced and other items corrected. The contractor started on the repairs. Upon removal of the carpet and baseboard, more termite damage not previously noted was found on the floor, stud, and wall. We wanted a release from this contract as we felt the house had further damage that had been covered up. The seller is telling us no, that they will repair the newly discovered damage and go forward to closing. The repairs are now over $10K for the known damages. The ReMax Alliance agent (seller) is threatening my agent of going to closing without me and also stating that we will pay the difference on the house if it sells for less. The VA Lenders pamphlet 26-7, chapter 12 states the minimum property requirements that must be met, section 12.06, http://www.benefits.va.gov/warms/pam26_7.asp. We feel that HSBC and the agent are trying to strong arm us into buying a house that has extensive damages not noted when we signed at first.