Monday Morning Cup of Coffee takes a look at news across the HousingWire weekend desk with more coverage to come on bigger issues.

It may have come as a bit of surprise when Equifax announced last week that its third quarter revenue was actually up year-over-year and it still made a profit in the quarter despite revealing in September that the company had been the victim of a data breach that exposed the personal information of 145.5 million U.S. consumers.

But was there more than meets the eye in the way that Equifax reported its third quarter earnings?

According to Marketwatch, the answer to that question is yes.

In an article published Saturday, Marketwatch’s Jeremy Owens and Francine McKenna write that Equifax may be using some “creative” accounting to make its earnings look better that they actually are and potentially justify handing out bonuses to the credit reporting agency’s executives in spite of the breach.

Here’s Owens and McKenna to explain:

In its first quarterly earnings report since revealing that data on more than 145 million Americans was put in jeopardy when intruders managed to infiltrate the data-warehousing company’s network, Equifax admitted that profit declined 28% from a year ago. However, after wiping away the $87.5 million in costs of the data breach for its adjusted earnings metric, Equifax was able to claim a 6% gain in profit and beat average analyst estimates.

Equifax’s method of choice to make the adjustments in question? Using non-GAAP accounting.

As Owens and McKenna write, Equifax said that during the third quarter, it recorded $87.5 million ($59.3 million, net of tax) for expenses related to the breach.

The company also said that it anticipates incurring additional costs in the estimated range between $56 million and $110 million due to the breach. The company said that it recorded a liability for the “low end in the range as we do not believe that any amount within the range is a better estimate than any other amount.”

And that’s where the non-GAAP reporting comes into play. Again from Marketwatch:

Charges equal to the low end of that estimate were accounted for in Equifax’s standard earnings number, which lives up to the U.S.’s Generally Accepted Accounting Principles, or GAAP, resulting in the $87.5 million total. However, the company stripped the charges from a non-GAAP earnings figure that it provided, which allows Equifax to claim that profits are growing even as it takes a hit from the data breach.

And what else is tied to Equifax’s non-GAAP earnings? Executive bonuses.

From Marketwatch again:

Company executives planned a conference call for Friday morning to discuss the results, when it would not be surprising if they focus more on the adjusted earnings than the profit that has breach costs stripped out. After all, Equifax determines its executives’ bonuses based on non-GAAP financial performance, according to its most recent proxy statement.

There’s a fair bit of interest these days in Russia’s involvement (or lack thereof, depending on who you believe) in the affairs of the United States.

But what about Russian business dealings in the United States?

In a really interesting article, TechCrunch took a look at Russian businesses and banks that are investing in businesses based here in the U.S.

One of the biggest beneficiaries of Russia’s newfound interest in the U.S. is LendingHome, a marketplace lender and HousingWire 2017 Tech100 winner.

LendingHome was founded in 2013. The company’s co-founder and CEO is 30-year-old Matt Humphrey, who HousingWire Magazine honored as a Rising Star this year.

According to the TechCrunch article, Sberbank, which is Russia’s biggest bank, has been active recently in funding startups in the U.S., including leading LendingHome’s recent Series C funding round.

That makes LendingHome’s capital raise one of the largest in recent memory with a lead Russian investor.

In that round of funding, Lev Khasis, first deputy chairman of the executive board and chief operating officer of Sberbank, took a seat on LendingHome’s board.

“Over the past four years, LendingHome has created a truly modern mortgage company,” Khasis said in June, when the funding was announced. “They innovate at every step, from the first customer interaction to the last servicing payment and everything in between. Sberbank’s decision to participate was immediate and enthusiastic, and I am proud to be a board member of LendingHome.”

For the full story on Russian investment in U.S. startups, click here.

In other news that will come as a shock to absolutely no one, it’s still ridiculously expensive to live in the Silicon Valley area – and California, in general.

According to this coverage in HousingWire by Kelsey Ramírez, the latest Housing Opportunity Index from the National Association of Home Builders and Wells Fargo, San Francisco was recently dethroned as the nation’s least affordable housing market – by Los Angeles.

Per the report, California continues to lead the way in terms of least affordable housing markets. Santa Ana and its surrounding area, the San Jose area, and Santa Rosa all check in near the bottom of in terms of affordability.

Well, there’s a new program being launched to help those who don’t sit in the C-suite of the latest tech startup afford a house of their own.

San Jose’s The Mercury News has the details:

Trying to bring a bit of relief to the situation, Housing Trust Silicon Valley is launching a program designed to help moderate and middle-income earners make down payments on houses. Bankrolled with $2 million of the Housing Trust’s own unrestricted funds, it is called the Homebuyer Empowerment Loan Program, or H.E.L.P.

For now, funds will be targeted at those looking to buy homes for up to $800,000 throughout Santa Clara County, as well as in East Palo Alto and Menlo Park in San Mateo County. If the program proves successful, the Housing Trust – which is a community development financial institution, basically a nonprofit bank – will likely try to expand its footprint.

For those of us that don’t live in California, the dollar figures may seem complete out of whack, but that’s the cost of doing business (so to speak) in Silicon Valley.

Again, from the Mercury News:

To capture potential buyers who earn healthy salaries but still can’t get into the housing market, the San Jose-based Housing Trust will make loans to households earning up to 140% of the area median income. For a family of four in Santa Clara County, the median income is $113,300. Under H.E.L.P., a family of four could earn up to $158,620 and still be eligible for down payment assistance.

And here is how the program actually works. The program is designed to provide middle-income, first-time homebuyers with down payment assistance of up to 10% of the purchase price. The maximum purchase price for those who want to use the program is $800,000.

But the money is not a gift. Rather, it’s a 30-year deferred loan, plus a share of appreciation.

According to Housing Trust Silicon Valley, borrowers will repay the principal loan amount plus a share of the appreciation based on the percentage of the loan borrowed through the program. No monthly principal or interest payments are required.

Buyers have to repay the loan once the maturity date is reached, the home is sold, or the borrower refinances their mortgage.

“We have a big group of first-time homebuyers who are falling through the cracks,” Adria Quinones-Masur, homeownership programs manager for the Housing Trust, told the Mercury News. “Maybe this kind of down payment assistance will help them get their foot in the door.”

And with that, have a great week everyone!