Assignment of Contract - Realtor says it's Fraudulent and Illegal!!!

We are dealing with a realtor that is saying it is illegal and fraudulent to assign a contract before closing.
A little history.
We put in an offer on a MLS short sale more than two months ago. The owner accepted the offer. We had used "And or Assigns" behind our LLC name on the contract. It was signed and accepted by the owner and realtor. A few weeks ago we signed an affidavit from the bank that says we cannot sell the house within 30 days and cannot sell it for more than 120% from 31 to 90 days. Right now we are short on cash and can not afford to buy the house, but didn't worry as we had "and or assigns" on the contract and it was signed by the owner and the realtor. Recently the bank sent an addendum asking to remove the "and or assigns".
When we told the seller's realtor we couldn't remove the "and or assigns", she has become angry and has told us we will not get our earnest money back and has even said it is against federal regulations and it is fraudulent to assign prior to closing. Yet she is asking if we can have a buyer do a rent back agreement until the the 90 days is up.
Unfortunately, being new we didn't know short sales fell under the "banks won't allow "and or assigns"", so now we are at the mercy of an angry realtor.

We would welcome and suggestions or advice on this.
For anyone else new to real estate investing - beware of the banks and angry realtors!!

Thanks,
Stu Shepherd and Tracee Perkins