920760--2/8/2007--LENNAR_CORP

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A significant decline in demand for new homes coupled with an increase in the inventory of available new homes adversely affects our sales volume and pricing. Demand for new homes is sensitive to economic conditions over which we have no control. Increasing interest rates could cause defaults for homebuyers who financed homes using non-traditional financing products, which could increase the number of homes available for resale. Inflation can adversely affect us, particularly in a period of declining home sale prices. A decline in land values could result in impairment write-downs. We face significant competition in our efforts to sell homes. Homebuilding is subject to warranty and liability claims in the ordinary course of business that can be significant. Natural disasters and severe weather conditions could delay deliveries, increase costs and decrease demand for new homes in affected areas. Supply shortages and other risks related to the demand for skilled labor and building materials could increase costs and delay deliveries. We may not be able to acquire land suitable for residential homebuilding at reasonable prices, which could increase our costs and reduce our revenues, earnings and margins. Reduced numbers of home sales force us to absorb additional costs. We may be unable to obtain suitable financing and bonding for the development of our communities. Our competitive position could suffer if we were unable to take advantage of acquisition opportunities. Our ability to continue to grow our business and operations in a profitable manner depends to a significant extent upon our ability to access capital on favorable terms. We might have difficulty integrating acquired companies into our operations. The performance of our joint venture partners is important to the continued success of our joint venture strategies. We could be hurt by the loss of key management personnel. Our Financial Services segment could have difficulty financing its activities. Federal laws and regulations that adversely affect liquidity in the secondary mortgage market could hurt our business. Government entities in regions where we operate have adopted or may adopt, slow or no growth initiatives, which could adversely affect our ability to build or timely build in these areas. Compliance with federal, state and local regulations related to our business could create substantial costs both in time and money, and some regulations could prohibit or restrict some homebuilding ventures. Tax law changes could make home ownership more expensive or less attractive. We have a stockholder who can exercise significant influence over matters that are brought to a vote of our stockholders.

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920760--2/8/2007--LENNAR_CORP_/NEW/