Treasury Department turns $25B profit on crisis-era securities

The Treasury Department has sold off all the mortgage-backed securities it bought during the financial crisis, reaping a profit along the way.

The government made $25 billion from roughly $225 billion of debt backed by Fannie Mae and Freddie Mac. The securities were purchased in the midst of the financial crisis, as the government tried to keep credit flowing in the housing market.

Now, with markets surging and the financial crisis in the rearview mirror — and with the presidential campaign rapidly approaching — the government is backing away from its outsized presence in the markets.

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“The successful sale of these securities marks another important milestone in the wind-down of the government’s emergency financial crisis response efforts,” said Mary Miller, the Treasury's assistant secretary for financial markets. “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 announced plans to gradually wind down its housing holdings in March 2011.

The move marks the latest in a series of steps by the government to exit its crisis-driven investments. In July, the Treasury announced it was no longer invested in Chrysler, ending with a roughly $1.3 billion loss.

However, the government has fared better with investments in the banking sector. The Treasury announced roughly one year ago that it had officially turned a profit on that portion of the bailout, and ultimately estimates it will turn a $20 billion profit on the $245 billion that was pumped into banks.