Company: LEN
Filing Date: 2025-04-04
Form Type: 10-Q
Source: 0001628280-25-016792
Chunk: 86

Company: LENNAR CORP /NEW/
Filing Date: 2025-04-04
Form: 10-Q
Item: Item 8
Chunk 86
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560,000 675,000 2,235,000 LMF commercial facilities maturing:December 2025200,000 — 200,000 January 2026100,000 — 100,000 Total LMF commercial facilities$300,000 — 300,000 Total$2,535,000 The Financial Services segment uses residential mortgage loan warehouse facilities to finance its residential lending activities until the mortgage loans are sold to investors and the proceeds are collected. The facilities are non-recourse to the Company and are expected to be renewed or replaced with other facilities when they mature. The LMF Commercial facilities finance LMF Commercial loan originations and securitization activities and were secured by up to 80% interests in the originated commercial loans financed.Borrowings and collateral under the facilities were as follows:(In thousands)February 28, 2025November 30, 2024Borrowings under the residential facilities$1,235,008 1,776,045 Collateral under the residential facilities1,286,848 1,837,833 Borrowings under the LMF Commercial facilities37,465 28,747 If the facilities are not renewed or replaced, the borrowings under the lines of credit will be repaid by selling the mortgage loans held-for-sale to investors and by collecting receivables on loans sold but not yet paid for. Without the facilities, the Financial Services segment would have to use cash from operations and other funding sources to finance its lending activities. Substantially all of the residential loans the Financial Services segment originates are sold within a short period in the secondary mortgage market on a servicing released, non-recourse basis. After the loans are sold, the 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. Mortgage investors could seek to have the Company buy back mortgage loans or compensate them for losses incurred on mortgage loans that the Company has sold based on claims that the Company breached its limited representations or warranties. 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