Beazer Homes USA Exit’s Mortgage Origination Business

ATLANTA–(BUSINESS WIRE)–Feb. 1, 2008–Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com) today announced the discontinuation of mortgage origination services through Beazer Mortgage Corporation, establishment of a new marketing services arrangement with Countrywide Financial Corporation and conclusions from its previously announced comprehensive review of the Company’s markets. The Company also provided certain unaudited and preliminary first quarter financial and operating data.

“We remain disciplined in our operating approach, responding to what has been and what we expect will continue to be a challenging environment for homebuilding,” said Ian J. McCarthy, President and Chief Executive Officer. “We continue to make reductions in direct costs, overhead expenses and land spending, as well as unsold home inventories and believe the actions we have taken to preserve liquidity and generate cash will enable us to successfully weather the downturn. At the same time, we believe the strategic actions we are announcing today will position us well to take advantage of opportunities that will arise when our markets begin to recover. We continue to focus on differentiating Beazer Homes in the eyes of the consumer and allocating capital and resources in order to enhance long term shareholder value.”

Mortgage Origination Services

The Company announced that it will discontinue mortgage origination services through Beazer Mortgage Corporation effective immediately and has ended its related mortgage services relationship with Homebuilders Financial Network, LLC (”HFN”). The Company has entered into a new marketing services arrangement with Countrywide Financial Corporation (NYSE: CFC), whereby Beazer Homes will market Countrywide as the preferred mortgage provider to Beazer Homes’ customers. Under the agreement, Countrywide’s comprehensive array of mortgage products and services will be made available to Beazer Homes’ homebuyers through dedicated Countrywide loan counselors serving all of Beazer Homes’ communities.

“We are pleased to enter into this arrangement with Countrywide, whose broad capabilities in the mortgage financing business make it uniquely qualified to serve our customers across the country,” said McCarthy. “Through this agreement, we can continue to focus on what we do best, providing our customers with homes of superior quality and value. At the same time, given the increasing complexities in mortgage financing today, we believe working with an established leader in mortgage lending makes the most sense for our homebuyers and our business.”

Beazer’s decision to close Beazer Mortgage Corporation and end its relationship with HFN will result in related charges and expenses. The Company does not believe that the amounts and timing of such expenses will be determinable until the Company is able to resolve the previously disclosed mortgage origination issues identified by the Audit Committee’s investigation.

Comprehensive Market Review

As previously announced in July 2007, the Company has undertaken a comprehensive review of each of its markets in order to refine its overall investment strategy and optimize its capital and resource allocation to enhance both its financial position and shareholder value. This review entailed an evaluation of both external market factors and the Company’s position in each market to determine how to optimize and prioritize investment across the Company’s existing and potential geographic footprint.

As a result of this review, the Company has decided that it will exit its homebuilding operations in Charlotte, NC, Cincinnati/Dayton, OH, Columbia, SC, Columbus, OH, and Lexington, KY. While specific plans and timetables for an orderly transition will vary according to the market, the Company intends to complete all homes under construction and is committed to maintaining customer care resources to provide ongoing warranty service to homeowners through their warranty periods. The Company is evaluating its current land holdings and inventory in each of these markets to determine the appropriate methods and timing for disposition.

Over the next twelve months, the Company expects to generate incremental cash as a result of the decision to withdraw from these markets. At December 31, 2007, the Company expects to reclassify certain assets in these markets as property held for sale, and to recognize impairment charges to reduce their carrying value to estimated proceeds less costs to sell. The Company also expects to recognize abandonment charges related to land option positions. In addition, over the next few months, the Company will incur other shut down costs associated with the wind down of operations. Due to the ongoing restatement, the Company will not be able to quantify the financial impact of these decisions until restated financial statements are finalized. At June 30, 2007, approximately 5% of the Company’s homebuilding assets were invested in the markets affected by today’s announcement.

In addition, the Company has confirmed plans to enter the Northwest Florida market in cooperation with The St. Joe Company (NYSE: JOE). The two companies entered into a long-term relationship in 2006 under which St. Joe entitles and sells home sites in a number of the region’s markets to Beazer Homes. The two companies work together on several projects and together plan to identify new opportunities as market conditions in the region improve.

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