FHA Short Term Rental Violation

[Larry Long]

So I bought a place in June that has been a bed and breakfast for a long time. We pulled off a lot of crazy stuff to get it to pass as residential and get FHA approved. My ex proceeded to call HUD after she figured out what I was doing and outed us. The lender called me and asked if we were in fact still running it and I just played dumb and pretended I didn't know. She said in her 25 years of doing this she has never seen this happen,so she was gonna see where it went and go from there. Haven't heard back from her and my loan guy said we were all good. He also knew what our plans were going into this. So the weird thing is that our mortgage payment went down this month, so I asked my loan officer about it and he told me to call the 800 number. I asked them why the payment went down and they told me that my PMI was dropped off the loan. How could this be? Can FHA pull their insurance if they find out and the lender decides to keep the loan anyway? I just have no idea how this stuff works and I'm trying to learn.