You can't back out of the sale for this reason. A contract, like your contract to sell the home, is not affected by *your* economic situations or needs: that is, you cannot use the fact that you would be underwater on the sale as grounds to terminate or void the contract. The entire point of contracts, after all, is to obligate people regardless of what happens to their personal situation or circumstances: once you contract, it does not matter that going through with the contract turns out to be bad for you--you still must honor your obligations. They are not "taking advantage" of you in the law's eyes: they are enforcing their rights under a contract your voluntarily entered into. It is not their fault or resonsibility that you were unaware of the lien.