How can I protect this plumbing in an exterior wall from freezing?
I've had this problem and it gets passed up in inspection a lot of the time.  I would build a separate box around these pipes, insulate and even use heat tape.  Plumbing on an outside wall like this will freeze!  Even a concrete outside wall 8" thick.  Put the heat tape on a separate line so that you decide to turn it on when necessary.  Insulation could be fiber glass, blown in insulation or even shredded newspaper.  Newspaper is great insulation.  I'd use something that is fire retardant for insulation if you use electrical tape.

How long ago was this installed?  In Washington State, there is 12 years for discovery and getting something fixed by the general contractor no cost to you.  There are ways for contractors to get out of this clause in Washington States laws but few understand the laws, even lawyers are clueless.

Check out the laws in your state.  If you did not sign a contract that says, "Indiana's State law for warranty is superseded by this contract declaring a one year warranty to include labor and material..." then that contractor is obliged and has to abide by the warranty law in your state.  Worth checking out.  You have to hire a licensed plumber to fix this, you should not do it yourself because it might VOID the warranty protecting you.  

I would hire a free lancing home inspector.  Very reasonable costs!  They work for you!  Not the city or county.