In a move that puts a once-popular kind of mortgage one step closer to extinction, Washington Mutual Inc. is drastically cutting back production of 11th District cost-of-funds loans.

Washington Mutual Inc., with about $50 billion of loans and securities- or 61% of its portfolio-tied to the cost-of-funds index, said it plans to deemphasize the loans in favor of adjustable rate loans linked to Treasury rates.

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