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Investments

Treasury winds down agency MBS portfolio

The Treasury Department completed the sale of its $225 billion portfolio of Fannie Mae and Freddie Mac mortgage-backed securities.

During the height of the crisis in 2008 and in 2009, the Treasury bought the MBS to keep some liquidity flowing through the mortgage market. The government said the sale of the bonds generated a $25 billion return to taxpayers through sales, principal and interest.

"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."

In March 2011, the Treasury sold roughly $3.7 billion in agency MBS then decided as markets had improved enough to begin unloading the bonds at a higher pace. The following month, the Treasury sold nearly $10 billion worth of Fannie and Freddie MBS, according to data released Monday.

The sales remained steady until the peak in January when the Treasury unloaded $10.7 billion worth of agency MBS, followed by $9.2 billion in February then the remaining $5 billion in March.

Meanwhile, the Federal Reserve is still buying agency MBS as part of its effort to keep mortgage rates low. From March through March 14, the Fed purchased $6.4 billion in Fannie, Freddie and Ginnie Mae securities.

It plans to purchase roughly $29 billion in MBS between March 13 and April 11, according to the Federal Reserve Bank of New York.

jprior@housingwire.com

@JonAPrior

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