Supplier Wind Down Q & A

What did TOUSA announce today?

The Company announced that, due to the severe economic environment, TOUSA and its related brands will suspend efforts to generate new build-to-order sales. The Company's primary focus will be completing and closing homes currently under construction, selling its remaining inventory of spec homes, and monetizing its land assets over time. The Company will continue to market and solicit offers for its assets during this process.

Additionally, TOUSA is in discussions with various parties regarding a sale of its financial services businesses Universal Land Title, Inc., Preferred Home Mortgage Company, and Alliance Insurance Information Services. The Company is also in discussions with various parties regarding a sale of its homebuilding operations in Texas, which serve the Houston, San Antonio, and Austin markets under the Newmark and Trophy brands

Why did TOUSA make this decision?

The ongoing economic downturn continues to hurt businesses of all sizes, across industries. The homebuilding industry has been particularly hard hit. Weak sales, high foreclosure rates, increasing job losses, and the ever-tightening mortgage market have caused many in our industry to re-evaluate existing operation models, including TOUSA.

Will TOUSA still build homes?

Yes. TOUSA will complete all homes currently under construction.

Will you still need my services?

Yes. We will continue to purchase goods and services from you as before and remit payment in the ordinary course of business.

How do I find out which developments/homes will not be completed?

As always, TOUSA will let you know where goods and services will be delivered and when. Your regular contact will be reaching out to you to describe any changes in building schedules, material needs, etc. as before.

If I shipped goods but the home hasn't been built yet and won't be built, will I still get paid?

Yes. The Company will continue to pay invoices in the ordinary course of business as before.

How does the announcement impact suppliers?

TOUSA's suppliers continue to be an important partner as the Company completes homes. All of our suppliers will continue to be paid for their goods and services in the normal course of business, under normal terms.

Will TOUSA try to extend out/delay payments to suppliers?

No. TOUSA will continue to pay suppliers on current schedules under current terms. Today's announcement will have no impact on what TOUSA pays suppliers and when it pays them.

It looks like TOUSA is liquidating. Why should I continue to ship you goods or provide services?

TOUSA is not liquidating. You should continue to ship goods or provide services because you are assured of payment for any goods and services you provide under normal terms and on a normal schedule. All of our suppliers are still fully protected as part of the Chapter 11 process.

How will suppliers be paid?

TOUSA's operations continue to generate cash. Additionally, the Company has access to cash collateral. In short, TOUSA has sufficient liquidity.

Will TOUSA convert its case to Chapter 7 liquidation?

No. TOUSA has sufficient liquidity through cash from operations and its cash collateral to conduct an orderly wind down of operations.

TOUSA said in its press release that the wind down process could take years. Does that mean it will be in bankruptcy for years?

Not that we anticipate. This shift in strategy will be laid out in the Company's amended Chapter 11 plan, which will be filed with the Court shortly. Once filed, we anticipate that confirmation of the Plan will take place a few months following.

Should I file a Notice to Owner or lien to protect my lien rights?

Filing Notice to Owners or liens prematurely will only result in the slowing of payments to you. Per the terms of TOUSA's bankruptcy Court Order, suppliers and service providers that have lien rights will be paid in the ordinary course of business. We cannot generate cash without closing homes clear and free of liens, thus it is in our best interest that we pay our goods and service providers so we can convey our homes.

When will TOUSA file its reorganization plan?

TOUSA anticipates filing its amended Chapter 11 plan shortly.

Has the Company determined how much suppliers will receive in exchange for pre-petition debt?

No. This information will be available once TOUSA files its amended Chapter 11 Plan.