It wasn’t all that long ago that a busboy could walk into a mortgage lender, say he made $100,000 per year and get a home loan based on that number.

The loan programs that were available had all different kinds of names, but they all pretty much did the same thing — allow people to get qualified for a mortgage without proof that they could qualify.

Fast forward to today’s mortgage market. Guidelines are tighter than they have been in years, loans are tougher to get and people are generally less apt to go out on a limb when financing their home.

And stated income loans are virtually non existent.

Who is hurt by the fact that stated income loan options do not exist?

Generally speaking, I would say that the small business person is hurt by not having stated income loans available. And what is even worse – now that virtually every lender requires that you allow them to verify your tax returns with the IRS, I suspect that there isn’t a stated income loan program anywhere on the immediate time horizon.

So if you are a small business owner and you have an accountant who helps make sure that you are minimizing your tax liability to the IRS, if you didn’t already know that this was impacting your ability to get a home loan — now you know.

One of the unexpected victims of the elimination of the stated income loan program appears who they were designed for in the first place:

The small business owner.

Here is the first thing like this I have seen – but possibly not the last:

Approximately 2,700  homeowners who had a loan with Countrywide are getting a check for just over$6,000 and total almost $17 million as a result of a settlement with the Florida Attorney Generals office.

According to the Florida Attorney Generals announcement:

Attorney General Bill McCollum today announced that more than 2,700 people will receive checks from a 2008 settlement his office obtained with Countrywide Financial Corporation. As part of the settlement, Countrywide is offering foreclosure relief payments to eligible borrowers who returned valid and timely Claim Forms and Releases under a program administered by the Countrywide settlement administrator. More than $16.9 million will be distributed this week, and each check will be written for just over $6,000.

“These checks will make a significant difference for Floridians who are trying to save their homes,” said Attorney General McCollum. “This will provide real relief to struggling homeowners and families.”

In July 2008, the Attorney General filed a lawsuit against Countrywide, one of the nation’s largest mortgage companies, for allegedly engaging in deceptive and unfair trade practices. The Attorney General’s lawsuit claimed Countrywide put borrowers into mortgages they couldn’t afford or loans with rates and penalties that were misleading. That lawsuit was resolved in October 2008, and the settlement agreement included a foreclosure relief payment program for Florida homeowners with qualifying Countrywide mortgages.

Also, according to the announcement, some very important information for people who are receiving checks and may have questions:

Important information for check recipients:

• The checks must be cashed on or before May 13, 2010
• The payment under this settlement may be taxable, and recipients should consult a tax advisor if they have any questions concerning their possible tax liabilities as a result of this payment.
• Recipients with any questions about their checks or other matters relating to the settlement should contact the settlement administrator, Rust Consulting, toll free at 1-866-411-6987, or visit http://www.countrywidesettlementinfo.com

This settlement is probably one of many that you will hear about as a result of many lending practices in the early 2000’s. While it seems like a large amount at first glance, when you look at how much revenue was probably generated for Countrywide by doing whatever-it-was-that-was-wrong, it is probably a drop in the bucket.

But something is better than nothing I guess.

With the passage of the SAFE Act nearly 2 years ago, the entire mortgage industry has taken steps toward licensing loan officers and managing that licensing process.

And now consumers can easily lookup the information in the NMLS system with the launch of NMLSConsumerAccess.org. The NMLS Consumer Access site gives consumers free access to data regarding the disciplinary actions, employment records and aliases of loan officers that are registered with the NMLS system.

About The SAFE Act

The SAFE Act (Secure and Fair Enforcement for Mortgage Licensing) was signed into law about 2 years ago and currently many states are getting ready for licensing of all loan officers.  Although each state may be slightly different when it comes to specific licensing requirements, they are all required to enact a SAFE-compliant law.

The general purpose of the SAFE Act is:

• Increasing accountability for loan officers and enhance loan officer tracking
• Enhancing consumer protections and support anti-fraud measures,
• Grant easy access for consumers to see loan officers employer and employment history as well as any public disciplinary and enforcement actions
• Provide a way to collect consumer complaints
• Establish standardized applications and reporting requirements for loan officers

Now that the SAFE act has been established, all loan officers must be either federally registered (the depository institutions such as Bank of America, Wells Fargo, etc.) or state-licensed if they work at a mortgage broker or banker.

For loan officers who work at a mortgage broker or banker, they must submit their last 10-year work history and pass a background check as well as complete at least 20 hours of pre-licensing education as well as pass an exam.

NMLS Consumer Access Launched

As a result of loan officers now being licensed and with the launch of the NMLS Consumer Access portal — consumers can now do their homework on loan officers prior to deciding to do business with them.

Or choosing someone else.