Sharp drop in delinquencies at Freddie and Fannie.Mortgage loans backed by Fannie Mae and Freddie Mac which are seriously delinquent or in foreclosure dropped below 1 million for the first time since mid-2009, according to Federal Housing Finance Agency's third-quarter foreclosure prevention report released last month. With 969,000 such mortgages at the end of the third quarter, delinquencies were down nearly 4 percent from the second quarter and more than 13 percent from a year earlier. FHFA also reports that more banks are exiting delinquent mortgage loans through foreclosure alternatives such as short sales, which totaled nearly 34,000 in the third quarter, the highest number since the FHFA began tracking such data in 2008. Mortgage loans which are current on their payments also improved to 88.6 percent of all mortgages at end of the third quarter 2012, according to a report released by the Office of the Comptroller of the Currency..Small Business Lending Fund spurs loan growth.Banks that participated in the Small Business Lending Fund showed a $7.4 billion increase in lending during the five quarters ending on Sept. 30, the U.S. Department of the Treasury reported. With 275 community banks participating in the SBLF program, 89 percent have increased lending. Also, of the 51 participating community development loan funds, 90 percent have increased their small-business lending. More than 78 percent of all participants in the program have increased such lending by 10 percent or more. Participants increased small business lending by a median of 32.2 percent. According to Treasury, banks that did not participate only increased business lending by 5.7 percent..Lew nominated as Treasury secretary.President Obama on Jan. 10 nominated White House Chief of Staff Jack Lew to replace Timothy Geithner as Secretary of the U.S. Department of the Treasury. Geithner announced he planned to step down from his position at the end of January. At 57 years old, Lew has spent the majority of his career in a variety of government positions, including serving twice as director of the Office of Management and Budget under Presidents Clinton and Obama. He also worked as a top aide to Secretary of State Hillary Clinton and a senior policy adviser for former House Speaker Tip O'Neill. Lew worked at Citigroup from 2006 to 2009..Bankers expect consumer borrowing to pick up in 2013 .With a few years of paying down debts under their belts, consumers will be applying for more new credit over the next six months, according to a survey by Fair Isaac Corporation. The survey of 251 risk managers in banking found that 61 percent expect the number of requests to increase a credit line to rise over the next six months. The same number of bankers also expects new credit requests to increase in the first half of 2013. Both those results are the highest FICO has reported since it began conducting the survey in 2009. In addition, 59 percent of bankers polled expect credit card balances to increase, which is the second-highest figure seen throughout the history of the survey.