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Financial Instruments and Fair Value Disclosure
 12 Months Ended
Nov. 30, 2022
Fair Value Disclosures [Abstract]  
Financial Instruments and Fair Value Disclosure Financial Instruments and Fair Value Disclosures
The following table presents the carrying amounts and estimated fair values of financial instruments held or issued by the Company at November 30, 2022 and 2021, using available market information and what the Company believes to be appropriate valuation methodologies. Considerable judgment is required in interpreting market data to develop the estimates of fair value. The use of different market assumptions and/or estimation methodologies might have a material effect on the estimated fair value amounts. The table excludes cash and cash equivalents, restricted cash, receivables, net, and accounts payable, all of which had fair values approximating their carrying amounts due to the short maturities and liquidity of these instruments.
November 30,
20222021
Fair ValueCarryingFairCarryingFair
(In thousands)HierarchyAmountValueAmountValue
ASSETS
Financial Services:
Loans held-for-investment, netLevel 3$45,636 45,647 44,582 44,594 
Investments held-to-maturityLevel 3143,251 143,208 157,808 184,495 
LIABILITIES
Homebuilding senior notes and other debts payable, netLevel 2$4,047,294 3,993,242 4,652,338 5,046,721 
Financial Services notes and other debts payable, netLevel 22,135,093 2,135,797 1,726,026 1,726,860 
Multifamily notes payable, net Level 216,749 16,749 — — 
The following methods and assumptions are used by the Company in estimating fair values:
Financial Services—The fair values above are based on quoted market prices, if available. The fair values for instruments that do not have quoted market prices are estimated by the Company on the basis of discounted cash flows or other financial information. For notes and other debts payable, the fair values approximate their carrying value due to variable interest pricing terms and the short-term nature of the majority of the borrowings.
Homebuilding—For senior notes and other debts payable, the fair value of fixed-rate borrowings is primarily based on quoted market prices and the fair value of variable-rate borrowings is based on expected future cash flows calculated using current market forward rates.
Multifamily—For notes payable, the fair values approximate their carrying value due to variable interest pricing terms and the short-term nature of the borrowings.
Fair Value Measurements
GAAP provides a framework for measuring fair value, expands disclosures about fair value measurements and establishes a fair value hierarchy which prioritizes the inputs used in measuring fair value summarized as follows:
Level 1:    Fair value determined based on quoted prices in active markets for identical assets.
Level 2:    Fair value determined using significant other observable inputs.
Level 3:    Fair value determined using significant unobservable inputs.
The Company’s financial instruments measured at fair value on a recurring basis are summarized below:
Fair Value at November 30,
(In thousands)Fair
Value
Hierarchy		20222021
Financial Services Assets:
Residential loans held-for-saleLevel 2$1,750,712 1,636,283 
LMF Commercial loans held-for-sale
Level 325,599 68 
Mortgage servicing rightsLevel 33,463 2,492 
Forward optionsLevel 19,473 — 
Lennar Other:
Investments in equity securitiesLevel 1212,981 906,539 
Investments available-for-saleLevel 335,482 41,654 
Residential and LMF Commercial loans held-for-sale in the table above include:
November 30,
20222021
(In thousands)Aggregate Principal BalanceChange in Fair ValueAggregate Principal BalanceChange in Fair Value
Residential loans held-for-sale$1,734,480 16,233 1,586,764 49,519 
LMF Commercial loans held-for-sale
24,000 1,599 — 68 
The estimated fair values of the Company’s financial instruments have been determined by using available market information and what the Company believes to be appropriate valuation methodologies. Considerable judgment is required in interpreting market data to develop the estimates of fair value. The use of different market assumptions and/or estimation methodologies might have a material effect on the estimated fair value amounts. The following methods and assumptions are used by the Company in estimating fair values:
Financial Services residential loans held-for-sale— Fair value is based on independent quoted market prices, where available, or the prices for other mortgage whole loans with similar characteristics. The Company recognizes the fair value of its rights to service a mortgage loan as revenue upon entering into an interest rate lock loan commitment with a borrower. The fair value of these are included in Financial Services’ loans held-for-sale as of November 30, 2022 and 2021. Fair value of servicing rights is determined based on actual sales of servicing rights on loans with similar characteristics.
LMF Commercial loans held-for-sale— The fair value of loans held-for-sale is calculated from model-based techniques that use discounted cash flow assumptions and the Company’s own estimates of CMBS spreads, market interest rate movements and the underlying loan credit quality. Loan values are calculated by allocating the change in value of an assumed CMBS capital structure to each loan. The value of an assumed CMBS capital structure is calculated, generally, by discounting the cash flows associated with each CMBS class at market interest rates and at the Company’s own estimate of CMBS spreads. The Company estimates CMBS spreads by observing the pricing of recent CMBS offerings, secondary CMBS markets, changes in the CMBX index, and general capital and commercial real estate market conditions. Considerations in estimating CMBS spreads include comparing the Company’s current loan portfolio with comparable CMBS offerings containing loans with similar duration, credit quality and collateral composition. These methods use unobservable inputs in estimating a discount rate that is used to assign a value to each loan. While the cash payments on the loans are contractual, the discount rate used and assumptions regarding the relative size of each class in the CMBS capital structure can significantly impact the valuation. Therefore, the estimates used could differ materially from the fair value determined when the loans are sold to a securitization trust.
Mortgage servicing rights — Financial Services records mortgage servicing rights when it sells loans on a servicing-retained basis or through the acquisition or assumption of the right to service a financial asset. The fair value of the mortgage servicing rights is calculated using third-party valuations. The key assumptions, which are generally unobservable inputs, used in the valuation of the mortgage servicing rights include mortgage prepayment rates, discount rates and delinquency rates and are noted below:
November 30, 2022
Unobservable inputs
Mortgage prepayment rate8%
Discount rate13%
Delinquency rate7%
Forward options - Fair value of forward options is based on independent quoted market prices for similar financial instruments. The fair value     of these are included in Financial Services' other assets and the Company recognizes the changes in the fair value of the premium paid as Financial Services' Revenue.
Lennar Other investments in equity securities - The fair value of investments in equity securities was calculated based on independent quoted market prices. The Company’s investments in equity securities were recorded at fair value with all changes in fair value recorded to Lennar Other unrealized gain (loss) from technology investments on the Company’s consolidated statements of operations and comprehensive income (loss).
Lennar Other investments available-for-sale - The fair value of investments available-for-sale is calculated from model-based techniques that use discounted cash flow assumptions and the Company’s own estimates of CMBS spreads, market interest rate movements and the underlying loan credit quality. Loan values are calculated by allocating the change in value of an assumed CMBS capital structure to each loan. The value of an assumed CMBS capital structure is calculated, generally, by discounting the cash flows associated with each CMBS class at market interest rates and at the Company’s own estimate of CMBS spreads.
The changes in fair values for Level 1 and Level 2 financial instruments measured on a recurring basis are shown below by financial instrument and financial statement line item:
Years Ended November 30,
(In thousands)202220212020
Changes in fair value included in Financial Services revenues:
Loans held-for-sale$(33,287)(14,449)21,765 
Mortgage loan commitments43,695 (8,302)12,774 
Forward contracts(48,790)11,513 (9,805)
Forward options(142)— — 
Changes in fair value included in Lennar Other unrealized gain (loss) from technology investments: 
Investments in equity securities$(655,094)510,802 — 
Changes in fair value included in other comprehensive income (loss), net of tax:
Lennar Other investments available-for-sale$1,464 (536)(805)
Interest on Financial Services loans held-for-sale and LMF Commercial loans held-for-sale measured at fair value is calculated based on the interest rate of the loans and recorded as revenues in the Financial Services’ statement of operations.
The following table represents the reconciliation of the beginning and ending balance for the Level 3 recurring fair value measurements in the Company's Financial Services segment:
Years Ended November 30,
20222021
(In thousands)Mortgage servicing rightsLMF Commercial loans held-for-saleMortgage servicing rightsLMF Commercial loans held-for-sale
Beginning of year$2,492 68 2,113 193,588 
Purchases/loan originations353 740,345 584 774,905 
Sales/loan originations sold, including those not settled
— (715,933)— (931,023)
Disposals/settlements (1)(404)— (1,365)(35,837)
Changes in fair value (2)1,022 1,599 1,160 (388)
Interest and principal paydowns— (480)— (1,177)
End of year$3,463 25,599 2,492 68 
(1)The year ended November 30, 2021 includes $28.5 million of loans sold/paid outside of LMF Commercial’s six securitizations and $7.3 million of loans converted to loans held-for-investment.
(2)Changes in fair value for LMF Commercial loans held-for-sale and Financial Services mortgage servicing rights are included in Financial Services' revenues.
The Company’s assets measured at fair value on a nonrecurring basis are those assets for which the Company has recorded valuation adjustments and write-offs. The fair values included in the tables below represent only those assets whose carrying values were adjusted to fair value during the respective periods disclosed. The assets measured at fair value on a nonrecurring basis are summarized below:
Years Ended November 30,
202220212020
(In thousands)Fair
Value
Hierarchy		Carrying ValueFair ValueTotal
Losses, Net (1)		Carrying ValueFair ValueTotal Losses, Net (1)Carrying ValueFair ValueTotal Losses, Net (1)
Non-financial assets
Homebuilding:
Finished homes and construction in progress (2)
Level 3$347,300 295,663 (51,637)32,364 16,342 (16,022)176,637 148,684 (27,953)
Land and land under development (2)
Level 3183,737 126,135 (57,602)35,775 26,841 (8,934)182,137 92,355 (89,782)
Other assets (2)
Level 3— — — 12,764 12,024 (740)— — — 
Investments in unconsolidated entities (2)Level 31,454 — (1,454)— — — — — — 
(1)Represents losses due to valuation adjustments and deposit and acore write-offs recorded during the year.
(2)Valuation adjustments for finished homes and construction in progress, and land and land under development were included in Homebuilding costs and expenses. During the year ended November 30, 2022, total losses, net, for land and land underdevelopment
included $47.9 million of deposit and pre-acquisition cost write-offs. Valuation adjustments related to investments in unconsolidated entities were included in equity in earnings (loss) from unconsolidated entities and/or Homebuilding other income (expense), net in the Company's consolidated statements of operations and comprehensive income for the years ended November 30, 2022, 2021 and 2020.
See Note 1 for a detailed description of the Company’s process for identifying and recording valuation adjustments related to Homebuilding inventory.