Treasury sells last mortgage bonds

WASHINGTON – The Treasury Department has sold the last of $225 billion in mortgage-backed securities it began buying during the financial crisis and announced the program designed to keep the housing finance market afloat made a $25 billion profit.

The purchases of bonds from Fannie Mae and Freddie Mac started in October 2008 and continued through December 2009.

“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, the Treasury’s assistant secretary for financial markets, said on Monday.

The bonds consisted mostly of 30-year, fixed-rate mortgages that were guaranteed by Fannie or Freddie, the housing finance giants that were seized by the government in 2008 to avoid their collapse. The Treasury purchased the bonds to keep money flowing into the mortgage market, helping banks continue to make loans to homebuyers as the economy struggled.

As the economy and financial system improved, the Treasury began selling the mortgage-backed securities last March. The bonds, worth $225 billion, were sold incrementally in the past year to avoid harming the mortgage market.

As the sales progressed, the Treasury said it anticipated making a profit. The department said Monday it received a total of $250 billion in sales, principal and interest from the securities.