Is it unlawful to refinnance as if you live some where when it is yreally your rental and is it fruad to tell ins for house the same

Your landlord is attempting to perpetrate a fraud against his lender.  This is something that could lead to a lawsuit in the future, and I would recommend that you not take any action that would put you on the hook.

If you are in doubt about whether or not you should do something, it is always better to err on the side of being honest.  Your landlord does not have the right to ask you to lie for him, and if he attempts to screw you over because you refuse (i.e., evict you, withhold your deposit unfairly, etc.), you can sue him.

The best way to protect yourself as a tenant is to know and insist on your rights.  See here for your rights as far as getting your deposit back (every tenant should know this stuff): http://www.dca.ca.gov/publications/landlordbook/sec-deposit.shtml