by David Urani

We noted last month after Lennar's fiscal 3Q earnings results that the housing market is about to get tough. We made light of the fact that a potential drop in prices leaves the Company in danger of tightened gross margins and another round of asset impairment charges. We still hold that thesis. We also noted that one aspect of Lennar's business, its Rialto investment arm, was one of the bright spots during the quarter. Lennar (LEN) was back in the investment game again on Friday as it bought up $740 million worth of distressed real estate assets. That's a good way to take a little breather from homebuilding as it continues to be one of the worst sectors in the economy.