If there is a question on the mortgage application that asks 'has this property been the subject of a refusal to lend against it' or words to that effect, you will of course have to answer yes to that. But I doubt it - a more usual question to ask would be whether the property has ever (to your knowledge) ever been refused Buildings Insurance or had special conditions imposed.
You can't change the circumstances of what has happened and the previous advice you were given on here (which I agree with) was that the mortgage company were being somewhat silly over this. So I should just get on with making the application.
You can't