The mortgage company will ask to see your stubs or previous statements. You can't just invent 2 years of income.
I don't follow. It is entirely legal to create your new company, as a sole proprietor, and then hire yourself to work for it. He hired himself for two years and paid himself x amount per month. He is paying taxes on this income, therefore it is all legal. If this weren't allowed there would be no small business owners.