Sometimes I'm amazed at how the lending market works. I couldn't even get a loan until I was made an out sourced employee rather than a contractor, even with 4 years of contracting with the same company. Then my broker got us into an FHA loan with 10% down (I know, not quite mustachian, but it eliminated a 30mi commute through traffic that made it 1.5 hours during rush), and we had to go through a few rounds of financial records back and fourth.
If I were to have lost my job sometime during the process, which some coworkers in similar situations did, I would have been scrambling to find ANY loophole I could get out, even forgoing my earnest money would have been better than getting into a place I knew I couldn't afford. Now we are happily whacking away at the mortgage with plans to refinance to a traditional mortgage and chop 20 years off the loan.
I can understand the mindset a little bit, you've been working hard towards getting this deal, you've dreamed about moving in, how awesome it will be, sometimes it can be hard to let go of the dream, but if you suddenly find you can't afford it then it is in everyone's best interest to bow out gracefully.