It sounds kind of like your apples have scab, from the description. Your malformed apples - do they have brown scabby looking spots, and look like they're puckered in at those spots? Another possibility is rust, but that usually doesn't malform the fruit. The fruit, by the way, is probably just fine to eat. I don't notice any difference in the flavor of the apples that have scab, and we've had no problems pressing them for cider.
If its been unusually rainy and cool, that's why you're seeing fungal diseases when you haven't before. It's really late in the season to do anything about the fungal problems, I'd let the trees be for this year. This fall, rake up ALL of the leaves and fallen apples (here's where my sheep and goats earn their keep!) - fungal spores will spread from the leaves that fell off of the tree. Early next spring, just before the leaves break out, spray the tree with a lime/sulphur spray - these "fruit tree" sprays are pretty common. Make sure you get good coverage of the whole tree. Then if you really need to control the fungus, spray every 6 weeks or so with sulphur. This is what I have to do in Western Wa, your area may be very different. Your county Ag commisioner will probably have a handout explaining this in your area.
No, your trees won't die from this. At least not for lots of years. Cedar trees can harbor fungal and insect pests that attack apple trees, so that may be what the other poster was referring to.
