FHA Loan not approved but Lender approved??

We have been in the process of re-financing our mortgage for almost 2 months. We were just told today that the FHA Underwriters rejected the loan due to credit. Our mortgage person told us everything was cleared through the lender but it was up to FHA for final approval. I'm still a bit confused on this. We already paid almost $500 for the appraisal under the umption that the loan was good to go. Our mortgage person even told us they had ordered the title already. Now today they come back with this. Is there anything that can be done? They are supposed to get the lender management to write a letter to FHA. I feel like we were tricked or something because we explained our whole "credit situation" to them first.