Washington Mutual stuck with bad loans

Sept. 21, 2008 at 12:59 PM
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SANTA ANA, Calif., Sept. 21 (UPI) -- Troubled Washington Mutual Bank says it is cooperating in an investigation into its relationship with a family of Southern California real-estate flippers.

Washington Mutual made 43 home loans to Vijay and Supriti Soni of Corona del Mar since early last year and six of the 22 homes sold have already gone into foreclosure, The Orange County Register reported Sunday.

The Soni family financed $24.5 million in real estate purchases and is now being investigated for possible fraud by the Orange County District Attorney's office, the newspaper said.

"This is an active investigation and we are fully cooperating with local law enforcement regarding this matter," bank spokeswoman Sara Gaugl told the Register. "We will not tolerate misrepresentation or fraud of any kind."

The newspaper said the troubled Soni mortgages have amounted to nearly $3 million, noted that even as real estate values tumbled in the past year the Soni operation never sold a home at a loss.

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