Excommunication, not schism
"There's nothing to say that the Shinjinkai can't apply to Hombu in five years."
True, they can apply all they like, however it seems fairly unlikely that they would be accepted.
"It has been stated as fact that (this individual) has had his rank stripped. Is this so?"
As I understand the context, it is to the further extent that his name has been erased, wiped out, never to be acknowledged there again. It has been obliterated.
"there seems to be more to the story than was told".
There is. Keep in mind...
"Hombu dojo does not, just on a whim, excommunicate its members". Trust in the judgement of Hombu.
"This seems kind of strange to me."
Yes, strange indeed.