A shift in housing? Returns for landlords softened last year as about 400,000 units entered the US multifamily-housing market, outstripping demand, according to RealPage. Rent increased an average 2.5% in 2017, down from a peak of 5.2% in 2015, while rent from newly signed leases decreased 0.9% in the fourth quarter compared with Q3.

Settlements, Legal News, and Compliance Updates

Hard to believe Countrywide has been gone 10 years. Time flies, and another name from "the way back machine" is Taylor Bean Whitaker which collapsed in 2009. It was discovered that TBW chairman Lee Farkas and others were guilty of phony accounting and triple-selling mortgages to various financial institutions to cover for hundreds of millions in nonexistent mortgages, with Colonial Bank funding TBW's "mortgages." He is serving a 30-year prison sentence at Butner Federal Penitentiary in North Carolina, and now PricewaterhouseCoopers has been found negligent by a federal judge in its role as Colonial Bank's auditor, stating that the company could have done more to prevent Colonial's collapse. A Wall Street Journal article spells things out.

Recall that back in August 2016, PricewaterhouseCoopers settled a $5.5 billion lawsuit that accused the company of failing in its audit duties by not discovering the accounting malfeasance that led to the collapse of Colonial Bank. That lawsuit was brought by the Federal Deposit Insurance Corp., which sued PwC after Colonial collapsed.

But some believe that this is the wrong move. There are two sides to every story, right? Here's another opinion from Accounting Today.

In settlement news, New Jersey's PHH Mortgage Corp. agreed to a $45 million settlement to resolve allegations of improperly servicing loans from 2009 to 2012. PHH reached the agreement with 49 states, Washington, D.C., and 45 state mortgage regulators, according to state Attorney General Eric T. Schneiderman. The agreement requires PHH to follow "comprehensive mortgage servicing standards," conduct audits and provide audit results to a committee of states, Schneiderman said. Of the $45 million, $30.4 million will be paid to borrowers, with additional payments to states and mortgage regulators for costs tied to the investigation. Schneiderman said borrowers who went through PHH foreclosures from 2009 through 2012 will qualify for a minimum $840 payment. Borrowers who faced PHH foreclosures started by PHH during the eligible period, but who did not lose their home, will receive minimum payments of $285. Schneiderman said the agreement does not release PHH Mortgage from liability for conduct that occurred starting in 2013.

But wait - there's more! Morgan Stanley disclosed a 5.5% passive stake in PHH. Stockholders know that PHH dropped 8% toward the end of December after the company went into its normal quarterly blackout period on its share repurchase program. Shares currently trade below the company's estimated value of excess cash ($10.88 per share). See 3Q17 valuation update.

It all comes down to managing risk, and I received this note from Jonathan Foxx, Chairman & Managing Director of Lenders Compliance Group. "A number of years ago I coined the term 'Mortgage Risk Management,' in order to differentiate managing mortgage risk from the many other types of risk management, and felt that a company could be successful in managing its mortgage risk if it developed a 'Culture of Compliance.' Doing all we can to protect the consumer is the only way to protect the viability of the mortgage loan originator and mortgage servicer in the long run. And the only effective way to ensure that the originator or servicer is protected is to manage its risk. In this White Paper, I provide some highlights and insights involving a recent OCC bulletin about financial institutions offering new, modified, or expanded products and services. If a financial institution is considering new activities, whether individual product roll-outs or establishing an entire origination or servicing platform, the need to manage and limit risk is ever present.

Capital Markets

In general rates go higher when the economy is expanding. Why? The demand for capital, or borrowing, increases. The opposite is true: A slowing economy tends to have lower rates. It seems that all we are seeing now is solid, sometimes spectacular and rarely poor, economic news out of the United States. Treasuries finished Wednesday mixed, with the 10-year note yielding 2.45% and the yield curve flattening after the release of the FOMC minutes.

The Fed minutes detailed that policy makers are intendent on continuing to increase the Fed funds rate in 2018 and some members see the possibility for a more aggressive path depending on the effects of tax policy changes and inflation. While certain items in the inflation bucket have seen increasing prices, the broad measure of inflation remains below the Fed's 2% threshold. This broad measure will be a key indicator as to whether the rates path becomes more aggressive as 2018 unfolds. The ISM Manufacturing Index increased to a 59.7, a strong level that adds to the recent assortment of positive economic data. And construction spending increased 0.8% to an all-time high of $1.257 trillion in November which was higher than the market consensus for 0.6%.

Tomorrow is the employment data. Lenders should know that the market has been placing less emphasis on the monthly jobs reports for a while, and the December report is likely to be no different. In order of importance, the market cares most about wages (expect hourly earnings +0.3% M/M and +2.5% Y/Y vs. +0.2% M/M and +2.5% Y/Y in Nov), the unemployment rate (look for unchanged from November at 4.1%), and finally the overall nonfarm payroll number (look for +190k vs. +228K in Nov).

Today's economic calendar has already produced everything of importance. The December ADP Employment report (+250k, higher than expected) and weekly initial jobless claims (250k). So far rates are higher compared to Wednesday evening: The risk-free 10-year is yielding 2.48% and agency MBS prices are down .250.

Jobs, Promotions, Products, and Personnel Movement

Providing sound guidance and Correspondent solutions, Envoy Correspondent Lending Division recently announced the expansion of its Non-Delegated loan program to include enhanced underwriting services, private mortgage insurance resources and closing document fulfillment options. "Lender partners close and fund their own loans without assuming additional underwriting risk or regulatory burden. The management team at Envoy Correspondent has more than 30 years of correspondent lending experience, along with a full suite of correspondent loan products to manage risk and increase profitability. 'A great amount of opportunity exists within the mortgage lending market, which is why we've expanded our services to provide our lender partners with the necessary tools to succeed,' said Dan Hastings, EVP of Envoy's Correspondent Lending Division. He added, 'Our goal is to minimize the worry in the lending process so that our lender partners can focus on what's important, their borrowers.' To learn more about our program, or to become a lender partner, email Division Manager Jeff Haar or Tom Coale, or visit envoycld.com.

Gateway Mortgage Group's Correspondent Lending Division welcomes its newest Regional Sales Manager covering the Southeast markets, Amy Ellenburg.  Amy has worked in several roles throughout her 20-year career in the industry with large institutional investors in both production and sales management roles. Amy's deliberate approach to correspondent lending and track record of success are a strong match for Gateway's strategic initiatives and platform. Gateway's Correspondent Lending Division, an arm of one of the largest privately held mortgage bankers in the country, offers a wide array of programs, competitive pricing and a unique alternative to the correspondent channel for small and mid-sized financial institutions as well as independent mortgage companies. For more information, please contact Jared Edmonds.

CALCAP Lending, LLC a direct lender specializing in bridge and investment property lending is pleased to announce the opening of a new production and operations platform located at 2603 Main Street in Irvine, California. In conjunction with this expansion, CALCAP is hosting a job fair on January 11th from 10AM-3PM to meet with talented loan originators, processors, underwriters and funders seeking career advancement opportunities in the high demand bridge lending marketplace. To reserve a confidential interview in person or obtain more information, you are invited to email CALCAP at the following email address: careers@calcapfinancial.com, contact our Recruiting Manager, Travis Downie, or give us a call at 623-337-4504.

Built Technologies, the company bringing construction lending into the digital age, has appointed Matthew Russell as chief technology officer. Joining Built on the heels of a $21 million series A capital raise, Russell will oversee the strategic development and technical operations of its collaborative construction lending platform. Honored as the 2017 "CTO of the Year" by the Nashville Technology Council, he previously served as the CTO of Digital Reasoning, a company offering cognitive computing services to intelligence agencies and financial institutions. "Matthew is an integral addition to our team as we enter an era of unprecedented growth for Built," said Chase Gilbert, CEO and co-founder at Built. "With his impressive background in technology enterprise and experience in executive leadership, we're confident Matthew will not only elevate Built and our product, but his expertise, especially in data analysis and utilization, will transform the entire industry."

PHH Mortgage, a leading provider of subservicing and portfolio retention services, has made several recent hires to its Servicing leadership team under Steve Staid, the Company's SVP of Servicing. Gail Shelly, VP of Customer Service, has spent 30 years leading financial services Customer Experience teams including those at Morgan Stanley, Bank of America and WAMU. Cathy Greene, VP of Business Controls, joined PHH with over 35 years of experience running business control functions for large financial institutions, such as Washington Mutual Bank, JP Morgan Chase and PNC Mortgage, and was co-founder of OpExNow, a consulting firm for the financial services industry.

Curtis Rethwisch, VP of Loan Administration, comes to the Company with nearly 30 years of experience in all aspects of mortgage loan servicing, and previously held senior-level roles at Specialized Loan Servicing, Quantum Servicing and Merrill Lynch's Wilshire Servicing. And filling the role of VP of Default Servicing is Bill Becker, another 30-year industry veteran who led default management at BB&T and spent more than 15 years with JPMorgan Chase in various senior leadership roles. In welcoming this talented group of executives, Staid said, "We are excited about the direction we are moving our Servicing organization and with the level of talent we are adding to the team. We have a strong, competitive platform with some of the best people in the industry."

Congrats to Kimberly Grandy who Planet Home Lending, LLC, a privately held mortgage lender and servicer, announced as its vice president of human resources.