Bank withdraws financing commitment due to defects

How is the remedy of the defects planned? From equity?

I see it differently. I don't know how bad the damage is, but with old buildings that is usually the case. That's no surprise. We also have a damp basement and had mold in one or two rooms because the previous owner had huge wardrobes on exterior walls of barely heated rooms. It has never occurred again since we have lived here (7 years). No one cared and the purchase contract simply said basically bought as seen and that was that. I would also be completely surprised, like the OP. Of course, the question is what exactly the damages are. Are the walls on the upper floor damp or only those in the basement, is the mold in a few spots on exterior corners behind furniture or everywhere. That makes a difference. In other words: Were normal defects of an old building turned into a problem or is the core problem a truly severely defective house.

Thinking "in the shoes of the other person" for five pfennigs should not require any general terms and conditions among civilized business partners.

It may be called differently, but the financing offer does include something to which the financing commitment refers. It also makes a difference what you inquire about: the bank gives you the green light for the amount x for construction project X, and then you come along with a hut Y for which there is no y because only X was requested.

I don't know how bad the damage is, but with old buildings it is usually like that. That's no surprise.

No. Even an old building should not have mold. That is NOT normal. But that's not what this is about now.

No one cared and in the purchase contract it simply said, in essence, bought as seen and that was the end of it.

If something like that is really stated in the contract, then it is not a trivial matter. If the seller conceals it, he makes himself liable. The problem is simply that the bank was presented with a house without defects and now defects are even pointed out in the contract. No matter how severe they actually are.

Then the notarized purchase contract is concluded in which some defects such as damp walls and mold are listed. The purchase contract is forwarded to the bank for payment.

Immediately upon receipt of the draft purchase contract, consultation with the bank would have been indicated here. For example, with photos and an assessment from expert Meier that underlines a "not so bad" or even "mentioned only for the sake of completeness"; or with an explanation from Uncle Franz to increase your equity capital to cover the renovation costs.
But going into the appointment with the attitude "we also like it with mold and think the price is worth it," buying the house, and then sending the bill to the bank just because they basically meant that you would be good for this sum is reckless carelessness. The banker, as an absolutely understandable reflex, pulls the emergency brake – you played with his responsibility!
In the banker’s mind, it immediately starts running when reading this, and the mental movie plays out: unexpected additional renovation costs – debtor overwhelmed – repayment stalls – gruesome ending: realization of a substandard collateral.
You would have to have smoked way too much pony farm to be surprised by the withdrawal of the financing commitment when you throw it in their face like that. Even experts can only help if you involve them in time. Braking late and softly does not work.

Unlike the others, I do not see the matter as so dramatic. It is fair for both sides if the defects are listed and future disputes are prevented. If the bank waives an appraisal, it cannot later terminate the loan agreement, because there will be no used property without defects. But all under the condition that the price is reasonable and the defects are taken into account in the price. Since a withdrawal from the purchase is only possible with the seller's consent and if they do not agree, there will be expensive disputes lasting years, I would immediately talk to a lawyer.