Company: LEN
Filing Date: 2025-07-01
Form Type: 10-Q
Source: 0001628280-25-033777
Chunk: 16

Company: LENNAR CORP /NEW/
Filing Date: 2025-07-01
Form: 10-Q
Item: Item 1
Chunk 16
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 Company retains potential liability for possible claims by purchasers that it breached certain limited industry-standard representations and warranties in the loan sale agreements. Purchasers sometimes try to defray losses by purporting to have found inaccuracies related to sellers’ representations and warranties in particular loan sale agreements and seeking to have the Company buy back mortgage loans or compensate them for losses incurred on mortgage loans that the Company has sold. The Company’s mortgage operations have established accruals for possible losses associated with mortgage loans previously originated and sold to investors. The Company establishes accruals for such possible losses based upon, among other things, an analysis of repurchase requests received, an estimate of potential repurchase claims not yet received and actual past repurchases and losses through the disposition of affected loans, as well as previous settlements. While the Company believes that it has adequately reserved for known losses and projected repurchase requests, given the volatility in the residential mortgage market and the uncertainty regarding the ultimate resolution of these claims, if either actual repurchases or the losses incurred resolving repurchase claims exceed the Company’s expectations, additional recourse expense may be incurred. The provision for loan losses was immaterial for both the three and six months ended May 31, 2025 and 2024. Loan origination liabilities were $16.8 million and $16.7 million as of May 31, 2025 and November 30, 2024, respectively, and included in Financial Services’ liabilities in the Company's condensed consolidated balance sheets.

13

Lennar Corporation and SubsidiariesNotes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

LMF Commercial - loans held-for-saleLMF Commercial originated commercial loans as follows:Three Months EndedSix Months EndedMay 31,May 31,(Dollars in thousands)2025202420252024Originations (1)$180,875 71,510 308,840 212,335 Sold190,936 129,335 285,823 156,285 Securitizations236 5 (1)During both the three and six months ended May 31, 2025 and 2024, the commercial loans originated were recorded as loans held-for-sale, which are held at fair value.Investments held-to-maturityAt May 31, 2025 and November 30, 2024, the Financial Services segment held commercial mortgage-backed securities (“CMBS”). These securities are classified as held-to-maturity based on the segment's intent and