Here is what was at the top of the headlines for the mortgage industry this past week:

1. Personal income & Disposable Income Increase in the month of September

Personal income increased $67.4 billion, or 0.5 percent, and disposable personal income (DPI) increased
$64.8 billion, or 0.5 percent, in September, according to the Bureau of Economic Analysis. Personal
consumption expenditures (PCE) increased $24.7 billion, or 0.2 percent. In August, personal income
increased $65.6 billion, or 0.5 percent, DPI increased $66.3 billion, or 0.5 percent, and PCE
increased $39.8 billion, or  0.3 percent, based on revised estimates.

Real disposable personal income increased 0.4 percent in September, the same increase as in August.
Real PCE increased 0.1 percent in September, compared with an increase of 0.2 percent in August.


2. Foreclosures & Delinquences at 5-Year Lows

The MBA Third Quarter National Delinquency Survey said the delinquency rate for mortgage loans on one-to-four-unit residential properties decreased to a seasonally adjusted rate of 6.41 percent of all loans outstanding, the lowest level since second quarter 2008. The delinquency rate dropped by 55 basis points from the previous quarter and 99 basis points from one year ago.

The survey said the percentage of loans in the foreclosure process at the end of the third quarter fell to 3.08 percent, down 25 basis points from the second quarter and 99 basis points from a year ago, also the lowest rate since 2008. The percentage of loans on which foreclosure actions were started during the third quarter decreased by three basis points, to 0.61 percent from 0.64 percent, the lowest level since early 2007.

The report said the serious delinquency rate–the percentage of loans that are 90 days or more past due or in the process of foreclosure–fell to 5.65 percent, a decrease of 23 basis points and a decrease of 138 basis points from a year ago. MBA noted, however, that the reported improvement in the seriously delinquent percentages may be slightly less than stated because one large specialty servicer that has received a number of loan transfers does not participate in the MBA survey.

3. Freddie Mac Dividend Will Fully Repay Taxpayers

Freddie Mac and Fannie Mae each reported strong third quarter financial results today.  For Freddie it was the eighth consecutive profitable quarter and for Fannie Mae the seventh.  With the dividend payments to Treasury, Fannie will have returned more than 97% of taxpayer, and Freddie will eclipse their draw amount by a fraction of a percent.

Freddie Mac’s pretax income, the second largest in the company’s history, was $6.5 billion and its net income was $30.5 billion compared to pretax income of $4.9 billion in the second quarter and net income of $5.0 billion.  The increase in net income was almost totally due to the $23.9 billion impact of released valuation allowance on deferred tax assets.  Comprehensive income was $30.4 billion compared to 4.4 billion the previous quarter.

Under the revised Senior Preferred Stock Agreement the company has a dividend obligation to the U.S. Treasury of $30.4 billion.  The agreement requires both Freddie Mac and Fannie Mae to pass through all of their net income less a retained buffer which will diminish over time.  This quarter’s dividend will bring the aggregate paid to Treasury since Freddie Mac was put into conservatorship to $71.345 billion.  The company received draws of$71.336 billion, and Treasury’s holdings of senior preferred stock remain at that level.

4. Shutdown Causes Cautious Outlook on Economy for Owners & Renters

The October National Housing Survey was conducted by Fannie Mae during a period that coincided with the federal government shutdown and the debt ceiling debate.  Fannie Mae spokesperson Pet Bakel said today that the dual crisis appears to have taken a toll on American’s outlook toward the economy and housing market.

Bakel said the most notable take-away from the survey was the huge increase in the gap between those who think the economy is on the right track and those who think it is headed in the wrong direction.  Wrong track answers soared by 12 percentage points from September levels to 67 percent.  This resulted in a 30 percentage point gap between the two responses and was the largest month-over-month change since the survey was initiated in 2010.

The share of people who said their personal financial situation would get worse in the next 12 months hit a survey high of 22 percent while those who reported significantly higher household income than 12 months ago fell to 22 points to 20.  One percent more reported significant higher household expenses than a year earlier.

The Housing Survey is conducted among about 1,000 homeowners and renters who are asked by phone for responses to around 100 question intended to assess their attitudes toward owning and renting a home, home and rental price changes, homeownership distress, the economy, household finances, and overall consumer confidence

Homeowners also cooled on whether it is a good time to buy a house.  Affirmative responses to that question fell to 65 percent, another survey low, from 72 percent.  Respondents who thought it was a good time to sell also declined from 38 to 37 percent.  Fewer Americans expect mortgage rates to increase over the next year, decreasing to 57 percent from 63 percent.