Banking, finance, and taxes
US Treasury Reaps Profit on Mortgage Bonds (AIG, GM)
Published:
The US Treasury reported this morning that it had sold the last of the $225 billion in mortgage-backed securities (MBS) that it purchased beginning in 2008 at the height of what appeared to be the beginnings of a collapse of some major US financial institutions. With this last sale of MBS, the Treasury reports the US government made a profit of $25 billion.
The federal government has also recovered about $331 billion of the $414.3 billion disbursed under the troubled asset relief program (TARP), and the Congressional Budget Office estimates that the final cost of TARP to US taxpayers will be about $34 billion. The takeovers of Fannie Mae and Freddie Mac, not included in the MBS figures, cost taxpayers $151 billion. US taxpayers still own a majority stake in American International Group Inc. (NYSE: AIG) and Ally Financial, as well as a minority stake in General Motors Co. (NYSE: GM).
The MBS became attractive to investors when the federal government took over Fannie and Freddie, virtually guaranteeing the MBS and paying a higher return than other US bonds.
Are you ready for retirement? Planning for retirement can be overwhelming, that’s why it could be a good idea to speak to a fiduciary financial advisor about your goals today.
Start by taking this retirement quiz right here from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes. Smart Asset is now matching over 50,000 people a month.
Click here now to get started.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.