"New York Fed Lures Wall Street Bids on Once-Toxic Mortgage Debt" is the headline over a Bloomberg Government article. The article is behind a hard paywall, but the headline tells the story and prompts the questions: What happened? Did they give the securities some kind of de-toxification? Change the terms?
"Toxic" was simply a pejorative term applied to securities by the press and public officials to refer to securities that had declined in value that they didn't understand or that they believed were poor investments.
In fact, enormous decisions were prescribed based on mark-to-market rules that were inappropriate or didn't even exist for regulatory capital purposes.
It turns out that hundreds of billions of dollars of "toxic" securities were in fact paid off as scheduled and otherwise had spectacular returns from depressed pricing levels. Those depressed prices were exacerbated by rhetoric and misguided policies that forced selling of these securities and discouraged buying, creating illiquidity and regulatory-related uncertainty.