WASHINGTON, DC-The US Treasury Department has announced plans to dismantle its $142-billion portfolio of GSE-guaranteed mortgage bonds. Starting this month and continuing every month, it will begin selling as much as $10 billion “subject to market conditions,” according to the agency’s statement. If all goes according to planned it will sell off its portfolio within 12 months. “We will exit this investment at a gradual and orderly pace to maximize the recovery of taxpayer dollars and help protect the repairing of the housing finance market,” Mary Miller, the Treasury’s assistant secretary for financial markets, said in a statement.

The Treasury Department launched the program in September 2008 when the financial markets were in meltdown mode and even fiscal and monetary conservatives were alarmed that the worse case scenario was set to materialize. The program was supplemented by a similar move by the Federal Reserve, a $1.25-trillion buying spree that ended last year. Today, the central banks hold about $945 billion of mortgage-backed securities on its balance sheet.

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