We are training some new residential real estate lenders and come to find out the denial process is not crystal clear for us!
In reference to counter offers, what does "expressly accepts credit offered" mean? 1002.2(c)(I) Does a loan have to originate for a counter offer to be considered accepted?

Yes. If they say they accept your counter-offer and don't close the loan, it is not really accepted. They may have temporary accepted it, but not legally.

Agree with DD.
It's hard for some lenders to understand (and the reg is not written clearly to avoid misinterpretation) that if there is a counteroffer, and the applicant writes a letter to the LO saying "I expressly accept your offer!", that if it does not close, it is a denial. Only if it closes, will it be an origination.