A significant increase in home prices helped push Deloitte's Consumer Spending Index up in September, the company reported. The index, which tracks consumer cash flow as an indicator of future consumer spending, rose to 3.53 from 3.27 in August. A substantial 10.5 percent bump in housing prices accounted for much of the overall increase.

The American Civil Liberties Union announced it has filed a suit against Morgan Stanley on the grounds of loan discrimination. The complaint filed by the ACLU, the National Consumer Law Center, and Lieff Cabraser Heimann & Bernstein alleges Morgan Stanley discriminated against black homeowners and violated civil rights laws by providing incentives to a subprime lender to originate mortgages that were likely to be foreclosed on.

Increased mortgage-related revenue pushed both Wells Fargo and JPMorgan Chase to record quarterly profits in 3Q 2012, the banks reported. JPMorgan posted a record net income of $5.7 billion, with net revenue at $24.9 billion. Wells Fargo reported record net income of $4.9 billion for the quarter, up approximately $800 million from 3Q 2011.

The Mortgage Bankers Association (MBA) released to the public a letter urging the Consumer Financial Protection Bureau (CFPB) to avoid proposals that may lead to unforeseen and unintended consequences harmful to the industry. In a letter published on the association's site, MBA president and CEO David Stevens urges CFPB to consider both borrower needs and servicer limitations when designing mortgage industry regulations. Specifically, Stevens asks CFPB to limit its rulemaking to the mandates required by the Dodd-Frank Act and to use its exemption authority to remove ""unduly burdensome"" requirements.

One in eight banks wouldn't be able to maintain adequate capital in a stressed economic environment, according to a Trepp report. The analytics firm released the results of its first Capital Adequacy Stress Test (T-CAST) of banks across the country, adapting the Federal Reserve's Comprehensive Capital Analysis Review (CCAR) Stress Test used on the 19 largest banking institutions in March.

Freddie Mac's Primary Mortgage Market Survey (PMMS) showed surprisingly little life this week following the better-than-expected jobs report for September. While rates did rise for the week ending October 11, most increases were mild. The 30-year fixed average posted the largest growth, rising to 3.39 percent (0.7 point) from 3.36 percent-a record low the week before. The 15-year fixed-rate mortgage also saw an increase, averaging 2.70 percent (0.6 point), up from 2.69 percent previously.

After a three-year battle, Ellie Mae and software developer DocMagic reached a settlement over an antitrust suit, the companies announced jointly. DocMagic first filed against Ellie Mae in August 2009, alleging antitrust violations, intentional interference with contractual relationships, interference with prospective economic advantage, and unfair competition, according to a company release sent out at the time.

Three mortgage relief companies are in hot water after the Federal Trade Commission (FTC) charged them with using deceptive tactics to prey on distressed homeowners. The FTC filed three separate suits against Prime Legal Plans, American Mortgage Consulting Group, and Expense Management America for allegedly violating its Mortgage Assistance Relief Services (MARS) Rule, which prohibits certain practices commonly used by fraudulent mortgage assistance companies.

Consumer optimism about the housing market and homeownership improved substantially in September, Fannie Mae reported. According to the GSE's September 2012 National Housing Survey, upward trends in home prices and downward trends in mortgage rates throughout the summer reinforced positive attitudes about where the market is headed.

Ocwen made some waves when it announced an agreement to acquire Homeward Residential Holdings in a nearly $750 million deal, but Fitch Ratings is doubtful about the move. The ratings agency announced it has placed Ocwen's ""B"" long-term Issuer Default Rating (IDR) on Rating Watch Negative following the servicer's announcement. Fitch cited in its decision the risks of various difficulties involved in the integration of Homeward Residential, as well as the current regulatory environment in the mortgage sector.