Treasury Nets $25B from Sale of Mortgage-Backed Securities

The U.S. Treasury said it completed the sale of the mortgage-backed securities portfolio it acquired at the height of the financial crisis in 2008 and 2009 – and netted a profit of $25 billion for taxpayers.
The Treasury had invested $225 billion in securities backed by mostly 30-year fixed-rate mortgages during 2008 and 2009 through its authority provided by Congress under the Housing and Economic Recovery Act of 2008.
A year ago, Treasury started selling those securities. It reported today that the total of cash from the sales, the principal and interest paid taxpayers was $250 billion.
However, taxpayers could still be on the hook if those mortgages behind the securities fail. The mortgages are guaranteed by financing giants Fannie Mae and Freddie Mac, which have been taxpayer-subsidized since September 2008.
Nonetheless, Treasury officials heralded the $25 billion profit as a victory.
They do have some bragging rights. These purchases of the mortgage-backed securities (MBS) helped preserve access to mortgage credit during a period of unprecedented market stress.
“The successful sale of these securities marks another important milestone in the wind down of the government’s emergency financial crisis response efforts,” said Assistant Secretary for Financial Markets Mary Miller. “This program helped support the housing market during a critical moment for our nation’s economy and delivered a substantial profit for taxpayers.”

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