Hi Daniel,
did you check out
> PAM_MKHOMEDIR(8): pam_mkhomedir - PAM module to create users home directory
?
Apart from that, `/etc/pam.d/login` by default includes
`/etc/pam.d/common-session` which also loads `pam_umask.so`. Maybe it
disregards your `pam_umask.so` options. The pam stack can be a tricky beast,
please make use of the `debug` option and check the log files.