I’d do 3 things: Ask for current pay-stubs; give him a rate of 8-10% apr; charge him a discount of 2% of the mortgage.

Larger companies will have a record on the better business bureau website. It’s free to look it up online. Check the yellow pages for a business listing and possible ad, do a reverse lookup of the phone number for the business on.

As for your suspicion on him getting turned down with the bank it’s that the banks are failing all over the place. 2yrs ago he would have no problem getting a loan with his circumstances.

If it makes you feel better, you could try doing a rent to own for one year just to test him out and then give him a private mortgage. Worst case, you can always foreclose on him and keep all the payments he made up to that point (profit for you), then re-sell the house for the original price.

If it smells funny and the banks wont touch it, then you shouldnt either. If you want to verify that his company is legit, then you can check their EIN number (the number that the IRS provides them with) to verify that they exist and are a legal entity.