Lennar Gets Loan Transactions with FDIC

Developer Lennar Corp. has finished transactions with the Federal Deposit Insurance Corp. under which the homebuilder and the independent government agency are set to resolve an estimated 5,500 distressed real estate loans, they stated Wednesday.Lennar stated, they, along with the Federal Deposit Insurance Corp., which insures bank deposits, are set to hold equity interests in two portfolios of loans with a combined unpaid balance of $3.05 billion. The transactions include an estimated 5,500 distressed commercial and residential real estate loans from 22 failed bank receiverships.Lennar indirectly acquired 40% managing member interests in limited-liability companies created to hold the loans, for an estimated $243 million.The Federal Deposit Insurance Corp. is retaining the remaining 60% stake, and is providing $627 million in financing at 0% interest for seven years.Rialto Capital Advisors, a subsidiary of Lennar, are set to conduct the day-to-day management and workout of the distressed loan portfolios.Acquiring and working out distressed real estate loans was a large and profitable part of Lennar President and CEO Stuart Miller company’s business during the real estate slump in the early 1990s, he stated.Lennar is “pleased to return to this business and honored to partner with the FDIC,” Miller added.Lennar has “been carefully preparing to invest in this space for the last two years,” he added.Miller stated, the transactions with Federal Deposit Insurance Corp. are expected to add to the company’s earnings this year.After the close of trading Wednesday, when its shares increased a penny to $15.61, Lennar announced the transaction.Source: homebuilder.com