Does the buyer get Escrow refunded if Bank doesn't approve the appraisal?

I recently had a buyer that really loved a home and put it under contract in the Kissimmee, Florida area. The home was a 3/2 with a pool backed up to a conservation area and went pending at 162k. The area is a short term rental subdivision, much like most in the Disney Area. The appraisal came in five days before closing and it came in at asking price but Colonial Bank had an additional review process that later said "NO GO" on the loan. The buyer backed out because he now felt it was a bad investment. My question here is does the buyer get the escrow refunded? Is this something that this financial institution wouldn't approve because of their lending guidelines or do you think every bank would of made this decision? Let me know your thoughts on what happened here and how do you move forward when something like this happens? You show properties that match your clients specific needs only for the bank to screw you over and make you look like a bad person to your client.............