On the 1003 Application the borrower indicated property would be owner occupied. However,other documentation in the file points to the fact that the loan is an investment property including the the Declarations Section VIII item m of the 1003. Would this be subject to the Rescission Rules or is this considered to a violation? Thank you in advance.

I've seen this more than once and you have to determine the true use of the property, that will dictate the regulatory disclosure requirement.

If we are at all doubtful that the applicant(s) will occupy the subject property, we require a separate signed "Affidavit of Intent to Occupy." Sometimes we find that the applicant simply checked the wrong box on the front of the 1003. Sometimes we discover that the applicant didn't think we would catch it. And sometimes we learn that the applicant(s) will not occupy.