Judge rejects claim by WAMU mortgage investors

WaMu woes plague investors

Mortgage investors who went to bankruptcy court asserting their right to push forward with a $435 million claim against Washington Mutual over mortgage-backed securities losses faced a bankruptcy judge’s rejection, according to The Associated Press.

The investors wanted the court to treat them as unsecured creditors to the bankruptcy, so they could obtain compensation for their losses, the wire service said. But a Delaware bankruptcy judge declined to grant the investors unsecured status. Washington Mutual collapsed in 2008 in the heat of the financial crisis.