Investment Group Calls on Beazer Homes

As the recent CEO terminations at Merrill Lynch and Citigroup make clear, shareholders expect swift board responses to failed leadership in the wake of a mortgage meltdown that has wrought havoc on the financial service and homebuilder industries. Against this backdrop, it is disturbing that the Beazer board has yet to remove Mr. McCarthy, who is responsible for the most stunning leadership failure in the entire homebuilding industry.

Mr. McCarthy -- who is scheduled to address the UBS Building & Building Products 5th Annual CEO Conference today at 2:00 PM ET -- allowed Beazer to violate federal law, improperly account for land development costs and sale-leaseback transactions, and provide undisclosed loans to executives. Beazer's widespread compliance failure have provoked a crisis of confidence that has driven its stock down 80% so far this year and led to cancellations of 68% last quarter.

The CtW Investment Group works with pension funds sponsored by unions affiliated with Change to Win, a coalition of unions representing nearly 6 million members, to enhance long-term shareholder value through active ownership. These funds, together with public pension funds in which CtW union members participate, have about $1.4 trillion in assets and are substantial long-term Beazer shareholders.

For additional information, please contact Michael Garland at 212-290-0308. Today's letter is below. It is also available at: www.ctwinvestmentgroup.com.

CtW Investment Group Letter:

November 6, 2007

Laurent Alpert

Chair, Nominating/Corporate Governance Committee

Board of Directors

Beazer Homes USA, Inc.

1000 Abernathy Road Suite 1200

Atlanta, GA 30328

Dear Mr. Alpert:

Yesterdayâ??s disclosure that Beazer Homes USA cut its workforce by 25% in October, suspended its quarterly dividend and will incur at least $230 million in impairment charges in its fiscal fourth quarter has further undermined managementâ??s credibility at a precarious moment in the housing cycle. The news follows the Audit Committeeâ??s recent disclosure of Beazerâ??s widespread violations of federal law and improper accounting.

With Beazerâ??s stock down nearly 80% this year and cancellations reaching a staggering 68% last quarter, decisive action by Beazerâ??s independent directors is required to restore investor, creditor, customer and regulatory confidence. Specifically, we call on you to immediately:

1. Replace CEO Ian J. McCarthy;

2. Name an independent board chairman; and

3. Establish a Legal and Regulatory Compliance Committee.

Rather than create sustainable, long-term value for shareholders, Mr. McCarthy has garnered egregious compensation while allowing his management team to violate federal law, improperly account for land development costs and sale-leaseback transactions, and provide undisclosed loans to executives.

While the board has recently removed two other executives who violated company policy, its failure to hold Mr. McCarthy accountable reflects, in our view, a troubling lack of independent leadership. In addition, the Audit Committeeâ??s findings reflect its failure to effectively oversee audit and compliance matters simultaneously, underscoring the need for a dedicated compliance committee, as we previously urged in a September 5 letter to you (to which we received a perfunctory response from management).

We further detail our concerns below.

Illegal mortgage practices and improper accounting

Beazer disclosed on October 11 that employees in its mortgage lending subsidiary violated federal law relating to down payment assistance programs in certain FHA-insured loans dating back to at least 2000. The board hopes to settle with regulators for between $8 - $15 million, and also faces potential civil litigation arising out of the same transactions.