BANKING & FINANCE - June 14, 1995
CalFed Slapped With Fraud Judgment: California Federal Bank and its defunct Orange County home-building arm received the $31-million judgment from jurors in a civil suit filed by Weyerhaeuser Mortgage Co. The jury found that Los Angeles-based CalFed reneged on a “letter of commitment” it issued to the timber company’s Woodland Hills-based lending unit. In the letter, California Federal allegedly provided a credit enhancement for two loans totaling about $24 million made by Weyerhaeuser to the bank’s real estate development subsidiary, California Communities Inc., in 1989 and ’90. CalFed said it is appealing the verdict.
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