Toxic Mortgage Program Nets Taxpayers $1.7 Billion Nashville

According to DSNews, the program launched by the US Treasury in March 2009 to take toxic mortgage assets off banks’ books has earned $1.7 billion for taxpayers — $500 million in dividends on the investments made and $1.2 billion in “unrealized gains” as the value of securities purchased under the program has increased. 

Under the program, investment funds have been set up by private equity firms, in collaboration with the U.S. Treasury, to purchase legacy mortgage securities. Private investors have put in a collective $7.4 billion to while taxpayers have shouldered about double that – a matching $7.4 billion in equity capital, in addition to $14.7 billion of debt capital commitments.

Of the $29.4 billion available, Treasury says the investment funds have drawn down $20.9 billion, or just over 70 percent.

The private investment firms participating in the program – including the likes of AllianceBernstein, BlackRock, and Invesco – are seeing returns ranging from 27 to 75 percent.

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