Miami-based Lennar disclosed in its annual report to the Securities and Exchange Commission on Jan. 25 that its mortgage lending subsidiary, Eagle Home Mortgage, has been subpoenaed by the Department of Justice regarding “the adequacy of certain underwriting and quality control processes related to Federal Housing Administration loans originated and sold in prior years.”
Lennar stated in the filing that it has provided information to DOJ about the loans and processes, and noted that the department has not made any claim for damages or penalties.
“We do not believe that the ultimate resolution of these claims or lawsuits will have a material adverse effect on our business or financial position. However, the financial effect of litigation concerning purchases and sales of property may depend upon the value of the subject property, which may have changed from the time the agreement for purchase or sale was entered into,” Lennar wrote.
Danielle Andrus was previously the managing editor for Colorado Builder, and is currently Editor for the Journal of Financial Planning.