Tough to get a mortgage without a "Real Job"

No kidding. Why is the world so harsh on "affluent self-employed professionals such as doctors, lawyers, accountants and small-business owners"?

In the past, most self-employed people took out "stated-income loans," which don’t require borrowers to fully document their income. Such borrowers typically made substantial down payments, had strong credit profiles and paid a slight premium — around 0.25 of a percentage point — on their interest rates. Defaults were low.

That changed as the loans grew in popularity during the housing boom and expanded beyond their traditional market of affluent professionals. Stated-income loans eventually became disparaged as "liar’s loans" because borrowers’ incomes were frequently exaggerated.

Many banks have eliminated stated-income loans entirely, and Freddie Mac — which, with Fannie Mae, is one of two government-backed buyers of mortgages — will end its stated-income lending program designed for self-employed borrowers next month.

"If the market stays as it is, we’ve frozen thousands and thousands of good borrowers out of the mortgage market," says Peter Ogilvie, past president of the California Association of Mortgage Brokers. "People who’ve demonstrated they can pay their bills cannot get a mortgage — and that’s people who have homes."

This sort of problem is happening to a couple friends of mine right now, including a strong candidate for Xoogler of the month.