US completes sale of $225 billion in mortgage-backed securities
WASHINGTON — The Treasury Department announced Monday that it had finished selling the $225 billion in mortgage-backed securities it bought to help stabilize the markets during the worst of the financial crisis.
The government ended up making a $25 billion profit on the securities, which are guaranteed by Fannie Mae and Freddie Mac, the government-owned mortgage finance companies. The profit came from interest payments, principal and rising prices for the securities, the department said.
“The successful sale of these securities marks another important milestone in the wind-down of the government’s emergency financial crisis response efforts,” Mary Miller, assistant secretary for financial markets, said in a statement. “This program helped support the housing market during a critical moment for our nation’s economy and delivered a substantial profit for taxpayers.”
The Treasury Department bought $225 billion in mortgage-backed securities in 2008 and 2009 as part of a wide-ranging effort to stabilize the housing and financial markets, an effort started by the Bush administration and continued and amplified under President Barack Obama.
In March 2011, the Treasury Department announced that it would start to sell off what remained of its portfolio. To avoid disturbing the still-fragile housing finance market, it limited sales to $10 billion a month and said it would discontinue the sell-off if any market disturbances occurred.
Thus far, Treasury’s sale of its mortgage-backed securities portfolio has provided a lucrative return to the taxpayer. But it is only one piece of a broad and expensive effort to prevent the collapse of the financial system and housing market.