The combined mortgage delinquency and foreclosure rates hit 14.41% on a non-seasonally adjusted basis -- the highest ever on record, according to the Mortgage Bankers Association's National Delinquency Survey released Thursday.

The MBA reported that in the third quarter of 2009, loans 90 days or more past due, loans in foreclosure and foreclosures started all set new records. Only the percentage of loans 30 days past due is still below the record set in the second quarter of 1985.

On the same day the Obama Administration floated a trial balloon to test the waters for extending TARP, the Congressional Oversight Panel heard from experts about TARP's effectiveness. While some of the experts did find aspects of TARP effective, they all testified to significant problems with TARP and the way it was implemented.

Chairwoman Elizabeth Warren set the tone for the hearing, saying that while the Troubled Assets Relief Program had succeeded in preventing a "catastrophic collapse of the financial sector," it was not "designed really to rescue large banks. The broader long-term goals were aimed at strengthening the overall economy and dealing with the alarming number of mortgage foreclosures." How successful was TARP in meeting these larger goals? Not very.

While the Obama administration floated a trial balloon regarding the possible extension of TARP in The Washington Post Thursday, any hope for that balloon could be quickly burst in hearings today before the Congressional Oversight Panel. Members of the House and Senate already are considering the introduction of bills to kill the unpopular program.

The Congressional Oversight Panel Thursday morning will listen to five experts in a hearing dubbed, "Taking Stock: Independent Views on TARP's Effectiveness."

The housing market dropped off a cliff in October, as the original Nov. 30th expiration date for the first-time home buyers tax credit approached, according to the Housing Market Monitor of the Center for Economic and Policy Research. Add to that the 6.25% 60-day delinquency rate in the third quarter -- 58% above the level of one year ago -- and you've got a recipe for housing disaster: more foreclosures, slower sales and ultimately a greater decline in house prices.

"With unemployment virtually certain to remain high well into next year, there is little prospect for any sizable drop in foreclosures," Dean Baker wrote in the Nov. 18 issue of the Housing Market Monitor. "As a result, foreclosures will be putting homes on the market at an annual rate of close to 2 million. This is guaranteed to depress prices in a market with total demand of close to 5 million. In short, house prices will almost certainly resume their decline. The only questions are how soon and how fast."

You might think it's a bit late in coming, but Attorney General Eric Holder announced a Financial Fraud Enforcement Task Force on Tuesday. Holder will lead the group along with Treasury Secretary Tim Geithner, Housing and Urban Development Secretary Shaun Donovan and Securities and Exchange Commission Chairwoman Mary Schapiro. President Obama established the task force by executive order as an interagency group aimed at strengthening efforts to combat financial crime.

While less than two weeks ago, the Congressional Oversight Panel said that it had found no "significant flaws in Treasury's implementation" of TARP bailout programs, on Tuesday, Special Inspector General Neil Barofsky (pictured) questioned why AIG counterparties were paid 100% of the values of their contracts, costing the U.S. taxpayers $62 billion, most of which may not get repaid. Also on Tuesday, the The Wall Street Journal analyzed enforcement actions filed by federal regulators and found that at least 27 troubled banks got TARP funds even though government officials knew they were in trouble. The Journal estimates this will result in another $5.1 billion in lost taxpayers' money.

These two stories point to $67.1 billion in taxpayers money spent on troubled institutions that may never get paid back. Some consider the AIG payoffs to have been "backdoor bailouts." When you consider who got the AIG payoffs, you too may wonder why the government didn't negotiate discounts. Recipients included Goldman Sachs (GS), Merrill Lynch, Deutsche Bank (DB), UBS (UBS), Barclays (BCS) and Bank of America (BAC).

President Barack Obama will work hard to build trust with China during his trip there, but how far will he be able to go in seeking changes on the key issues -- currency, the trade surplus, North Korea, Iran, human rights and others -- when he's sitting down with his nation's largest creditor? China holds $800 billion in U.S. debt and gets $50 billion a year in interest.

With that level of U.S. debt in its hands, China holds most of the cards. If China started dumping that debt, the value of the U.S. dollar would fall dramatically. China knows it's in the stronger position, as evidenced by its recent decision to ignore the IMF as it continues its stimulus programs. So no matter who was sitting at the table representing the U.S., they wouldn't have much ability to move the Chinese.

In August, the FDIC reluctantly made it easier for private-equity groups to buy failed banks after the number of problem banks rose to 416 at the end of June. I say reluctantly because the FDIC prefers to sell failed banks to people with a track record in the banking industry. Now there are some new kids on the block creating stiff competition for the the private equity firms -- former bank executives working with Wall Street firms to form "blind pools" to buy failed banks.

That's good news for everyone but the private-equity firms. Not only will former bankers be more attractive as buyers to the FDIC, the private-equity firms expect the blind pools to drive up prices, making the purchase of failed banks less attractive. Even when the FDIC agreed to make it easier for private-equity firms to buy failed banks, it added a caveat to prevent them from quickly flipping the banks: It required investors to maintain a bank's minimum capital levels for three years.

The number of foreclosures remain high in the four states that top the list -- Nevada, California, Florida and Arizona -- but the trend appears to be moving in their favor. All four saw declines in their foreclosure filings from September to October, according to RealtyTrac's October 2009 U.S. Foreclosure Market Report. Arizona, Florida and Nevada even saw fewer foreclosure filings year-over-year compared to October 2008.

Nationwide for the third consecutive month, foreclosure filings dropped. These filings, which include default notices, scheduled foreclosure auctions and bank repossessions, totaled 332,292 in October 2009, a decrease of 3% from September. That does represent an increase of 19% from October 2008, but foreclosure moratoriums were starting at that time and continued to build through the end of the year. So, year-over-year comparisons may make things look worse than they are through the end of 2009.

When it comes to the way the U.S. government regulates the beleaguered financial industry, Democratic Sen. Chris Dodd of Connecticut wants to shake things up a bit. For starters, the Chairman of the Senate Banking Committee is pushing the idea of a new super bank cop called the Financial Institutions Regulatory Administration. His plan would involve a complete overhaul of the financial regulatory structure, reducing the power of the Federal Reserve and instead amassing all banking regulatory authority in one place.

Dodd's plan is starkly different than that of the House Committee on Financial Services, which for now is content with the status quo of maintaining banking regulatory agencies and a regulatory council. But with Dodd facing re-election challenges in his home state, bold is the word. This new proposed regulatory authority would have full responsibility for bank supervision, instead of continuing the current practice of having four bank supervisors including the Federal Reserve, the FDIC, the Comptroller of the Currency and the Office of Thrift Savings.