MIAMI — Miami-based homebuilder Lennar Corp. has purchased an interest in two portfolios of distressed loans currently held by the Federal Deposit Insurance Corp. (FDIC) with a combined unpaid balance of $3.05 billion. The portfolios contain approximately 5,500 residential and commercial real estate loans obtained by the FDIC from the receiverships of 22 failed banks.Approximately 21 percent of loans are secured by commercial real estate properties.
Lennar acquired a 40 percent interest in a limited liability company created by the FDIC to hold the loans for approximately $243 million, including up to $5 million in working capital to be contributed by Rialto Capital Advisors, a subsidiary of Lennar that will manage and work out the loans. The FDIC will retain the remaining 60 percent interest in the LLC and will provide $627 million of non-recourse financing at a 0 percent interest rate for 7 years.
“Acquiring and working out distressed real estate loans was a large and extremely profitable part of our business during the last major real estate down cycle in the early 1990s,” said Stuart Miller, president and CEO of Lennar Corp., in a statement. “We are pleased to return to this business and honored to partner with the FDIC to manage, work though and add value to these portfolios of real estate loans.”
— Coleman Wood