The Securities and Exchange Commission has rejected a "no action" request by Beazer Homes to exclude a new proposal by the Indiana Laborers' Pension Fund that seeks a report on the company's mortgage operations and loan-default risks.

The SEC staff ruling presumably will clear the way for similar shareholder resolutions to appear on the ballot at other builders, mortgage companies, and financial firms. The Laborers' International Union of North America, of which the Indiana union is a part, has filed mortgage report proposals at Washington Mutual, Ryland Group, and Bear Stearns, all of which have seen financial losses because of the subprime credit crisis.

"It's great that this is going to set a precedent at those other firms," said Jennifer O'Dell, assistant director of the Laborers' office of corporate affairs. "We couldn't be happier for a first-time proposal."

The Beazer proposal asks the board to make a report to shareholders within 90 days of the annual meeting detailing how many of the company's mortgages are subprime, as well as the regions most reliant on subprime mortgages and the firm's expectations of mortgage defaults. The proposal also asks for the identity of the purchasers buying mortgage loans on the secondary market.

Representatives of Atlanta-based Beazer did not respond to phone calls by press time.

The homebuilder asked the SEC for permission to exclude the Laborers proposal from its proxy statement on the grounds that it violates Rule 14a-8(i)(7), which allows firms to omit resolutions that relate to "ordinary business" operations. Lawyers for Beazer also invoked a less-often used exclusion, Rule 14a-8(i)(5), which lets companies exclude proposals that "relate to operations which account for less than 5 percent of the company's total assets … and for less than 5 percent of its net earnings and gross sales."

In late November, the SEC concluded that it was "unable to concur" with Beazer's arguments to "exclude the proposal under Rule 14a-8(i)(5) ... [and] 14a-8 (i)(7)."

Though Beazer's exclusion request was denied, a vote on the Laborers' proposal is not entirely certain, O'Dell said.

"We don't know whether Beazer will be able to hold an annual meeting" in 2008, she said, citing concerns that the company's mortgage troubles may lead to a financial restatement. Under SEC rules, companies that are restating past results cannot hold regular annual shareholder meetings because they do not have current financial information to include in proxy materials.

Beazer is now under formal investigation by the SEC and by federal prosecutors in North Carolina in connection with past mortgage lending and financial practices. Several employees of the company's mortgage finance division were found during an internal investigation to have broken Department of Housing and Urban Development laws relating to down-payment assistance programs, charges which the firm said it hopes to settle out of court for $15 to $18 million, Beazer said in an October press release.

The SEC has also begun calling on banks and insurance companies to provide greater disclosure of subprime risks. According to a Dec. 11 Associated Press report, the agency plans to send letters to more than 20 firms that previously disclosed off-the-books purchases in collateralized debt obligations and other investment vehicles.