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U.S. turned a profit on sales of mortgage-backed securities


The U.S. Treasury Department sold one of its financial-crisis era portfolios of mortgage-backed securities and made a $25 billion profit, the department announced today.

The Treasury Department bought $225 billion worth of mortgage-backed securities during the height of the financial crisis starting from October 2008 through December 2009.

Some of those securities were backing up loans thought to be worthless, financial analysts reported at the time. But Treasury’s portfolio was made up mostly of 30-year fixed-rate mortgage-backed securities that were guaranteed by Fannie Mae or Freddie Mac, making them more valuable, CNNMoney reported.

Last March, the department started the process of selling those securities. The agency said it received a total of $250 billion in sales, principal and cash.

However, if the mortgages behind those securities fail, taxpayers will still be on the hook, since federal housing giants guarantee the loans and taxpayers have been propping up Fannie Mae and Freddie Mac.

The Treasury Department heralded the profit, calling it a successful wind-down of a useful program that helped the nation navigate the financial crisis, CNNMoney reported.

The repayments from the mortgage-backed security program will go to pay down debt, unless Congress decides otherwise, CNNMoney said. 

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