US Treasury Reaps Profit on Mortgage Bonds (AIG, GM)

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.