Radian (RDN) 8-K Consolidated GAAP Income Statements

Exhibit 99.1

Quarterly

Operating Supplement

Fourth Quarter 2007

Table of Contents
	Page
Introductory Note	2
Company Profile	2
Company Information	2
Consolidated GAAP Income Statements	3
Consolidated GAAP Balance Sheets	4
Consolidated Gross Premiums Written by Product	5
Consolidated Net Premiums Earned by Product	5
Consolidated Net Unearned Premium Amortization and Estimated Future Installment Premiums	5
Consolidated Selected Loss Information	6
Consolidated Selected Derivative Information	7
Consolidated Investment Portfolio Highlights	8
Consolidated Insured Portfolio Highlights	9
Consolidated Explanatory Notes	18
Safe Harbor Statement	19

1 Quarterly Operating Supplement for the Period Ended Dec. 31, 2007 /Table of Contents

Radian Asset Assurance Inc.

Quarterly Operating Supplement

December 31, 2007

Introductory Note

This operating supplement presents financial information for Radian Asset Assurance Inc. (Radian) and its consolidated subsidiaries on a GAAP basis. Please visit our website at www.radian.biz for selected statutory information.

Company Profile

Radian, founded in 1985 and rated* AA (outlook: Stable) by Standard & Poor’s, a division of The McGraw-Hill Companies (S&P) and Aa3 (outlook: Negative) by Moody’s Investor Service (Moody’s), is a niche insurer of public finance transactions and a provider of credit enhancement to leading financial institutions in the structured finance market. As a direct writer of financial guaranty insurance for municipal bonds, asset-backed securities and structured transactions, Radian plays an important role in extending the benefits of insurance to a broad range of institutions and securities issuers. Radian is also a leading provider of reinsurance to the AAA-rated monoline financial guarantors. In addition, Radian provided Trade Credit reinsurance until 2005, when this line of business was placed in runoff.

Radian is a subsidiary of Radian Group Inc. (Radian Group) (NYSE: RDN), a global credit risk management company headquartered in Philadelphia with significant operations in both New York and London.

For more information regarding Radian and Radian Group, please visit our website at www.radian.biz

Company Information
Radian Asset Assurance Inc.	Contact:
335 Madison Avenue	John C. DeLuca
New York, New York 10017	Senior Vice President
1 877 337.4925 (within the U.S.)	Director of Marketing, Public Finance
1 212 983.3100	1 212 984.9222
www.radian.biz	john.deluca@radian.biz

* Radian Group formally requested that Fitch Ratings (Fitch) withdraw its ratings of all Radian Group entities on September 5, 2007. Notwithstanding such request, Fitch rates Radian A+ (outlook: Evolving). Please refer to our website for more information.

2 Quarterly Operating Supplement for the Period Ended Dec. 31, 2007/ Introductory Note / Company Profile / Company Information

Radian Asset Assurance Inc.

Consolidated GAAP Income Statements*

($ Thousands)

(Unaudited)

	Quarter ended						Twelve months ended
	December 31 2007			December 31 2006			December 31 2007			December 31 2006
Revenues
Net premiums written - insurance	$	41,256		$	61,042		$	185,718		$	199,746
Net premiums written - derivatives		13,020			15,195			43,043			60,107
Total net premiums written	$	54,276		$	76,237		$	228,761		$	259,853
Net premiums earned - insurance	$	33,633		$	30,098		$	131,833		$	128,032
Net premiums earned - derivatives		13,422			18,649			62,066			71,541
Total net premiums earned		47,055			48,747			193,899			199,573
Net investment income		27,559			24,526			104,372			92,656
(Loss) gain on sale of investments		(1,539	)		(43	)		12,334			1,505
Change in fair value of derivative instruments		(545,554	)		21,245			(808,867	)		12,384
Total revenues		(472,479	)		94,475			(498,262	)		306,118
Expenses
Losses and loss adjustment expenses		59,058			4,179			107,232			21,849
Policy acquisition costs		11,161			10,320			45,163			46,263
Other operating expenses		12,022			13,600			48,821			59,543
Other expense		5,863			4,137			18,089			15,059
Total expenses		88,104			32,236			219,305			142,714
(Loss) income before income taxes		(560,583	)		62,239			(717,567	)		163,404
Income tax (benefit) expense		(198,050	)		16,671			(273,648	)		36,116
Net (loss) income	$	(362,533	)	$	45,568		$	(443,919	)	$	127,288
Financial Ratios
Loss and LAE Ratio		125.5	%		8.6	%		55.3	%		10.9	%
Underwriting Expense Ratio		49.3	%		49.1	%		48.5	%		53.0	%
Combined Ratio		174.8	%		57.7	%		103.8	%		63.9	%

* See Consolidated Explanatory Notes on page 18.

3 Quarterly Operating Supplement for the Period Ended Dec. 31, 2007 /Consolidated GAAP Income Statements

Radian Asset Assurance Inc.

Consolidated GAAP Balance Sheets*

($ Thousands)**

(Unaudited)

	December 31 2007		December 31 2006
Assets
Investments:
Fixed maturities, available for sale, at fair value (amortized cost $2,066,052 and $2,111,479)	$	2,092,720	$	2,171,578
Fixed maturities - trading, at fair value (cost $16,125)		16,132		—
Hybrid securities, at fair value (amortized cost $140,325)		155,844		—
Trading securities, at fair value (cost $17,459)		—		28,340
Common stock, at fair value (cost $931 and $931)		1,143		1,152
Short-term investments		253,614		93,042
Total Investments		2,519,453		2,294,112
Cash and cash equivalents		6,012		2,371
Deferred income taxes - net		233,996		—
Accrued interest and dividends receivable		28,319		27,860
Premiums and other receivables		21,582		25,760
Deferred policy acquisition costs		172,560		153,094
Prepaid reinsurance premiums		1,138		1,184
Reinsurance recoverable on unpaid losses		169		2,259
Prepaid federal income taxes		14,995		14,995
Federal income tax recoverable		—		409
Derivative financial guaranty contracts		7,903		118,721
Put options on committed preferred securities		35,242		—
Other assets		13,259		7,752
Total Assets	$	3,054,628	$	2,648,517
Liabilities and Shareholder’s Equity
Liabilities
Losses and loss adjustment expenses	$	249,864	$	173,990
Reinsurance payable on paid losses and loss adjustment expenses		1,410		1,853
Deferred premium revenue		713,726		659,877
Federal income taxes payable		4,348		—
Deferred federal income taxes		—		109,849
Payable to affiliates		6,298		5,141
Derivative financial guaranty contracts		801,284		59,143
Accrued expenses and other liabilities		24,721		32,388
Total Liabilities		1,801,651		1,042,241
Shareholder’s Equity
Common stock - $150 par value
Authorized, issued and outstanding - 100,000 shares		15,000		15,000
Additional paid-in capital		704,500		600,654
Retained earnings		504,341		944,996
Accumulated other comprehensive income		29,136		45,626
Total Shareholder’s Equity		1,252,977		1,606,276
Total Liabilities and Shareholder’s Equity	$	3,054,628	$	2,648,517

* See Consolidated Explanatory Notes on page 18.

** Except share amounts.

4 Quarterly Operating Supplement for the Period Ended Dec. 31, 2007 /Consolidated GAAP Balance Sheets

Radian Asset Assurance Inc.

Consolidated Gross Premiums Written by Product*

($ Thousands)

	Quarter ended						Twelve months ended
	December 31 2007		December 31 2006		Percent Change		December 31 2007		December 31 2006		Percent Change
Public Finance Direct	$	11,461	$	30,300	-62.2	%	$	60,117	$	79,658	-24.5	%
Structured Finance Direct		4,507		4,117	9.5	%		16,582		18,569	-10.7	%
Public Finance Reinsurance		19,739		20,526	-3.8	%		86,821		81,065	7.1	%
Structured Finance Reinsurance		5,327		5,901	-9.7	%		21,933		18,676	17.4	%
Trade Credit Reinsurance		216		219	-1.4	%		1,723		3,905	-55.9	%
Derivatives		13,180		15,332	-14.0	%		43,626		60,575	-28.0	%
	$	54,430	$	76,395	-28.8	%	$	230,802	$	262,448	-12.1	%

Consolidated Net Premiums Earned by Product*

($ Thousands)

	Quarter ended						Twelve months ended
	December 31 2007		December 31 2006		Percent Change		December 31 2007		December 31 2006		Percent Change
Public Finance Direct	$	13,459	$	9,136	47.3	%	$	45,770	$	32,515	40.8	%
Structured Finance Direct		3,878		4,705	-17.6	%		17,384		19,244	-9.7	%
Public Finance Reinsurance		10,770		9,509	13.3	%		44,667		37,765	18.3	%
Structured Finance Reinsurance		5,461		5,467	-0.1	%		22,957		21,086	8.9	%
Trade Credit Reinsurance		65		1,281	-94.9	%		1,055		17,422	-93.9	%
Derivatives		13,422		18,649	-28.0	%		62,066		71,541	-13.2	%
	$	47,055	$	48,747	-3.5	%	$	193,899	$	199,573	-2.8	%

Consolidated Net Unearned Premium Amortization and Estimated Future Installment Premiums**

As of December 31, 2007

($ Millions)

	Ending Net Unearned Premiums		Unearned Premium Amortization		Future Installments		Total Premium Earnings
2008	$	642.1	$	86.3	$	67.5	$	153.8
2009		584.0		58.1		79.3		137.4
2010		531.7		52.3		64.5		116.8
2011		483.1		48.6		60.3		108.9
2012		437.5		45.6		54.8		100.4
2008 – 2012		437.5		290.9		326.4		617.3
2013 – 2017		250.6		186.9		146.6		333.5
2018 – 2022		122.9		127.7		51.0		178.7
2023 – 2027		46.1		76.8		39.4		116.2
After 2027		—		46.1		62.1		108.2
Total		—	$	728.4	$	625.5	$	1,353.9

* See Consolidated Explanatory Notes on page 18.

** This table depicts the expected amortization of the unearned premium, net of prepaid reinsurance premiums, including credit derivatives, for the existing financial guaranty portfolio, assuming no advance refundings as of December 31, 2007. Expected maturities will differ from contractual maturities because borrowers have the right to call or repay financial guaranty obligations. Unearned premium amounts are net of prepaid reinsurance.

5 Quarterly Operating Supplement for the Period Ended Dec. 31, 2007 /Consolidated: Gross Premiums Written / Net Premiums Earned / Net Unearned Premium

Radian Asset Assurance Inc.

Consolidated Selected Loss Information*

($ Thousands)

Components of Claims Paid and Incurred Losses and Loss Adjustment Expenses

	Quarter ended						Twelve months ended
	December 31 2007			December 31 2006			December 31 2007			December 31 2006
Claims Paid
Trade Credit	$	1,528		$	1,368		$	7,973		$	13,669
Financial Guaranty		10,070			(30	)		11,102			6,787
Conseco Finance Corp		2,667			3,513			11,449			15,763
Total	$	14,265		$	4,851		$	30,524		$	36,219
Incurred Losses and Loss Adjustment Expenses
Trade Credit	$	(2,182	)	$	88		$	(7,269	)	$	6,180
Financial Guaranty		61,240			4,091			114,501			16,951
Conseco Finance Corp		—			—			—			(1,282	)
Total	$	59,058		$	4,179		$	107,232		$	21,849
Net payments under derivative contracts	$	—		$	(729	)	$	1		$	63,548

Components of Losses and Loss Adjustment Expense Reserves

	December 31 2007		December 31 2006
Financial Guaranty
Case	$	31,685	$	42,459
Allocated non-specific		141,270		26,185
Unallocated non-specific		49,195		60,431
		222,150		129,075
Trade Credit and Other
Case		14,800		20,770
IBNR		12,914		24,145
		27,714		44,915
Total	$	249,864	$	173,990

* See Consolidated Explanatory Notes on page 18.

6 Quarterly Operating Supplement for the Period Ended Dec. 31, 2007 /Consolidated Selected Loss Information

Radian Asset Assurance Inc.

Consolidated Selected Derivative Information*

($ Millions)

Balance Sheet Information

	December 31 2007			December 31 2006
Notional value - insured portfolio	$	48,539.4		$	43,728.0
Gross unrealized gains on derivative financial guaranty contracts	$	7.9		$	118.7
Gross unrealized losses on derivative financial guaranty contracts		(785.5	)		(24.3	)
Gross unrealized gains on put options on committed preferred securities		35.2			—
Net (losses) gains	$	(742.4	)	$	94.4

Income Statement Information

	Quarter ended					Twelve months ended
	December 31 2007			December 31 2006		December 31 2007			December 31 2006
Net gains (losses) on trading securities	$	—		$	4.2	$	(0.3	)	$	4.9
Net (losses) gains on derivative financial guaranty contracts		(577.8	)		17.0		(840.8	)		7.4
Net gains on put options on committed preferred securities		32.2			—		32.2			—
Change in fair value of derivative instruments	$	(545.6	)	$	21.2	$	(808.9	)	$	12.3

Net Gains and (Losses)

	December 31 2007			December 31 2006
Balance at January 1	$	94.4		$	23.4
Net (losses) gains on derivative financial guaranty contracts		(840.8	)		7.4
Settlements of derivatives contracts:
Early termination receipts		(31.2	)		—
Defaults
Recoveries		—			(4.5	)
Payments		—			68.1
Net gains on put options on committed preferred securities		32.2			—
Payment to maintain put options on committed preferred securities		3.0			—
Balance at end of period	$	(742.4	)	$	94.4

* See Consolidated Explanatory Notes on page 18.

7 Quarterly Operating Supplement for the Period Ended Dec. 31, 2007 /Selected Consolidated Derivative Information

Radian Asset Assurance Inc.

Consolidated Investment Portfolio Highlights*

($ Millions)

Asset Quality**	Book Value (12/31/2007)		Percent of Book Value		Book Value (12/31/2006)		Percent of Book Value
AAA	$	1,698.4	67.5	%	$	1,573.2	68.5	%
AA		418.9	16.6	%		404.4	17.6	%
A		220.8	8.8	%		172.6	7.5	%
BBB		174.1	6.9	%		132.4	5.8	%
BIG		—	0.0	%		3.5	0.2	%
NR		6.1	0.2	%		5.8	0.3	%
Other		1.2	0.0	%		2.2	0.1	%
Total	$	2,519.5	100.0	%	$	2,294.1	100.0	%
Asset Class	Book Value (12/31/2007)		Percent of Book Value		Book Value (12/31/2006)		Percent of Book Value
Municipal Bonds	$	1,747.6	69.4	%	$	1,703.6	74.2	%
Taxable Bonds		361.3	14.3	%		344.2	15.0	%
Convertible Bonds		125.8	5.0	%		116.5	5.1	%
Short-Term		253.6	10.1	%		93.0	4.1	%
Other		31.2	1.2	%		36.8	1.6	%
Total	$	2,519.5	100.0	%	$	2,294.1	100.0	%

* See Consolidated Explanatory Notes on page 18.

** Average duration of 5.8 years and 5.6 years at 12/31/2007 and 12/31/2006, respectively.

8 Quarterly Operating Supplement for the Period Ended Dec. 31, 2007 /Consolidated Investment Portfolio Highlights

Radian Asset Assurance Inc.

Consolidated Insured Portfolio Highlights*

($ Millions)

Consolidated Gross Par Originated

	Quarter ended
	December 31, 2007						December 31, 2006
	Direct		Assumed		Total		Direct		Assumed**		Total
Public Finance	$	494	$	3,132	$	3,626	$	1,448	$	1,544	$	2,992
Structured Finance		450		1,099		1,549		5,994		815		6,809
Total	$	944	$	4,231	$	5,175	$	7,442	$	2,359	$	9,801
	Twelve months ended
	December 31, 2007						December 31, 2006
	Direct		Assumed		Total		Direct		Assumed**		Total
Public Finance	$	3,282	$	9,963	$	13,245	$	3,304	$	6,486	$	9,790
Structured Finance		13,514		2,179		15,693		22,990		2,113		25,103
Total	$	16,796	$	12,142	$	28,938	$	26,294	$	8,599	$	34,893

Sector Breakout

	Net Par Outstanding (12/31/2007)		Percent of total Net Par		Net Par Outstanding (12/31/2006)		Percent of total Net Par
Public Finance
General Obligations	$	19,780	17.0	%	$	16,760	16.1	%
Healthcare		10,849	9.4	%		10,198	9.8	%
Transportation		6,938	6.0	%		5,426	5.2	%
Utilities		6,555	5.7	%		6,269	6.0	%
Tax Backed		5,851	5.0	%		5,269	5.1	%
Education		4,237	3.7	%		4,095	3.9	%
Investor-Owned Utilities		3,889	3.4	%		2,355	2.3	%
Long Term Care		1,548	1.3	%		1,464	1.4	%
Housing		621	0.5	%		793	0.8	%
Other Public Finance		1,784	1.5	%		1,184	1.1	%
Subtotal Public Finance	$	62,052	53.5	%	$	53,813	51.7	%
Structured Finance
Collateralized Debt Obligations	$	46,961	40.5	%	$	43,989	42.3	%
Asset Backed - Consumer		1,799	1.5	%		1,310	1.3	%
Asset Backed - Commercial and Other		1,359	1.2	%		1,109	1.1	%
Asset Backed - Mortgage and MBS		1,195	1.0	%		1,023	1.0	%
Other Structured Finance		2,656	2.3	%		2,722	2.6	%
Subtotal Structured Finance		53,970	46.5	%		50,153	48.3	%
Total	$	116,022	100.0	%	$	103,966	100.0	%

* See Consolidated Explanatory Notes on page 18.

** Reflects one quarter lag

9 Quarterly Operating Supplement for the Period Ended Dec. 31, 2007 /Consolidated Insured Portfolio Highlights

Radian Asset Assurance Inc.

Consolidated Insured Portfolio Highlights*

($ Millions)

Rating Distribution**

Rating**	Net Par Outstanding (12/31/2007)		Percent of total Net Par		Net Par Outstanding (12/31/2006)		Percent of total Net Par
Public Finance
AAA	$	1,943	1.7	%	$	1,371	1.3	%
AA		19,560	16.8	%		16,436	15.8	%
A		20,753	17.9	%		18,715	18.0	%
BBB		18,044	15.6	%		15,808	15.2	%
Below Investment Grade		1,709	1.5	%		1,293	1.2	%
Not Rated		43	0.0	%		190	0.2	%
Subtotal Public Finance	$	62,052	53.5	%	$	53,813	51.7	%
Structured Finance
AAA	$	48,267	41.6	%	$	41,800	40.2	%
AA		858	0.8	%		2,976	2.9	%
A		1,541	1.3	%		1,481	1.5	%
BBB		2,471	2.1	%		2,511	2.4	%
Below Investment Grade		86	0.1	%		119	0.1	%
Not Rated		747	0.6	%		1,266	1.2	%
Subtotal Structured Finance	$	53,970	46.5	%	$	50,153	48.3	%
Total
AAA	$	50,210	43.3	%	$	43,171	41.5	%
AA		20,418	17.6	%		19,412	18.7	%
A		22,294	19.2	%		20,196	19.5	%
BBB		20,515	17.7	%		18,319	17.6	%
Below Investment Grade		1,795	1.6	%		1,412	1.3	%
Not Rated		790	0.6	%		1,456	1.4	%
Total	$	116,022	100.0	%	$	103,966	100.0	%

* See Consolidated Explanatory Notes on page 18.

** Indicated ratings category reflects the highest rating assigned to the underlying obligation from the three rating agencies (S&P, Moody’s and Fitch), or, if no such rating has been assigned, Radian’s rating estimate of the obligation utilizing rating agency models and methodologies to the extent available. Radian’s rating estimates are subject to revision at any time and may differ from the credit ratings ultimately assigned by the three rating agencies.

10 Quarterly Operating Supplement for the Period Ended Dec. 31, 2007 /Consolidated Insured Portfolio Highlights

Radian Asset Assurance Inc.

Consolidated Insured Portfolio Highlights*

($ Millions)

Geographic Diversification

	Net Par Outstanding (12/31/2007)		Percent of total Net Par		Net Par Outstanding (12/31/2006)		Percent of total Net Par
Domestic public finance
California	$	7,191	6.2	%	$	6,185	5.9	%
New York		5,862	5.2	%		5,051	4.9	%
Texas		4,454	3.8	%		4,158	4.0	%
Florida		3,466	3.0	%		3,245	3.1	%
Pennsylvania		3,298	2.8	%		2,892	2.8	%
Illinois		3,156	2.7	%		2,881	2.8	%
New Jersey		2,666	2.3	%		2,250	2.2	%
Massachusetts		2,417	2.1	%		2,238	2.2	%
Washington		2,056	1.8	%		1,775	1.7	%
Colorado		1,831	1.6	%		1,409	1.3	%
Top ten states - domestic public finance subtotal		36,397	31.5	%		32,084	30.9	%
Total of other states - domestic public finance		20,124	17.3	%		18,685	17.9	%
Total domestic public finance		56,521	48.8	%		50,769	48.8	%
Domestic structured finance		37,054	31.9	%		37,205	35.8	%
International public and structured finance		22,447	19.3	%		15,992	15.4	%
Total	$	116,022	100.0	%	$	103,966	100.0	%

* See Consolidated Explanatory Notes on page 18.

11 Quarterly Operating Supplement for the Period Ended Dec. 31, 2007 /Consolidated Insured Portfolio Highlights

Radian Asset Assurance Inc.

Consolidated Insured Portfolio Highlights*

($ Millions)

25 Largest Public Finance Exposures

Obligor	Net Par Outstanding (12/31/2007)		Percent of total Net Par		Rating**
New York, NY - G.O.	$	827	0.7	%	AA
California - G.O.		745	0.7	%	A+
Port Authority of New York & New Jersey		723	0.6	%	AA-
Chicago, IL - G.O.		572	0.5	%	AA-
New Jersey Transportation Trust Fund Authority		541	0.5	%	AA-
Washington - G.O.		467	0.4	%	AA+
Los Angeles Unified School District, CA		424	0.4	%	AA-
Massachusetts - G.O.		414	0.4	%	AA
Metropolitan Transportation Authority, NY		402	0.4	%	A
Massachusetts School Building Authority		359	0.3	%	AA+
New Jersey Economic Development Authority School Facilities		357	0.3	%	AA-
Puerto Rico - G.O.		314	0.3	%	BBB-
Jefferson County, AL - Sewer Revenue		302	0.3	%	A
Illinois - G.O.		298	0.3	%	AA
Reliance Rail Corp., AU		294	0.3	%	A-
Illinois Toll Highway Authority		289	0.2	%	AA-
Long Island Power Authority, NY		288	0.2	%	A-
Thames Water Utilities Finance PLC, UK		268	0.2	%	BBB+
Citizens Prop Ins Corp., FL		264	0.2	%	A+
District of Columbia		254	0.2	%	A+
San Francisco International Airport, CA		252	0.2	%	A1
New Jersey Turnpike Authority		249	0.2	%	A
Metropolitan Washington DC Airports Authority		243	0.2	%	AA-
Bay Area Toll Authority, CA		241	0.2	%	AA
Massachusetts Water Resources Authority		237	0.2	%	AA
Total	$	9,624	8.3	%

Largest Structured Finance Exposures

Radian’s largest Structured Finance exposures consist of the following:

• Seven $600 million transactions representing Static Synthetic Investment Grade Corporate CDOs rated AAA.

• One $599 million transaction representing a Static Synthetic Investment Grade Commercial Mortgage Backed Securities CDO rated AAA.

• One $563 million transaction representing a Static Synthetic Investment Grade Corporate CDO rated AAA.

• One $502 million transaction representing a Managed Cashflow Investment Grade Asset-Backed CDO rated AAA.

• Twenty eight $450 million transactions representing Static Synthetic Investment Grade Corporate CDOs rated AAA.

• One $450 million transaction representing a Second-to-Pay CDO rated AAA.

• One $450 million transaction representing a Static Synthetic Investment Grade Commercial Mortgage Backed Securities CDO rated AAA.

These 40 transactions combine to total $19.4 billion, or 16.7% of Radian’s Net Par Outstanding as of December 31, 2007.

* See Consolidated Explanatory Notes on page 18.

** Indicated ratings category reflects the highest rating assigned to the underlying obligation from the three rating agencies (S&P, Moody’s and Fitch), or, if no such rating has been assigned, Radian’s rating estimate of the obligation utilizing rating agency models and methodologies to the extent available. Radian’s rating estimates are subject to revision at any time and may differ from the credit ratings ultimately assigned by the three rating agencies.

12 Quarterly Operating Supplement for the Period Ended Dec. 31, 2007 /Consolidated Insured Portfolio Highlights

Radian Asset Assurance Inc.

Consolidated Insured Portfolio Highlights*

($ Millions)

Below Investment Grade Exposure by Sector

Sector	Net Par Outstanding (12/31/2007)		Percent of total Net Par
Public Finance
General Obligations	$	1,155	1.0	%
Utilities		121	0.1	%
Education		114	0.1	%
Tax Backed		102	0.1	%
Healthcare		79	0.1	%
Long Term Care		55	0.1	%
Transportation		24	0.0	%
Housing		20	0.0	%
Other Public Finance		39	0.0	%
Subtotal Public Finance		1,709	1.5	%
Structured Finance
Asset Backed - Consumer		67	0.1	%
Asset Backed - Commercial and Other		14	0.0	%
Collateralized Debt Obligations		5	0.0	%
Subtotal Structured Finance		86	0.1	%
Total	$	1,795	1.6	%

10 Largest Health Care Exposures

Obligor	Net Par Outstanding (12/31/2007)		Percent of total Net Par		Rating**
Catholic Healthcare West	$	143	0.1	%	A+
Bon Secours Health System Inc		130	0.1	%	A-
Capital Hospitals		121	0.1	%	BBB-
Catholic Health Initiatives		120	0.1	%	AA
MedStar Health		117	0.1	%	A-
Partners Healthcare System		114	0.1	%	AA
Consort Healthcare Limited		109	0.1	%	BBB-
Kaiser Permanente		109	0.1	%	A+
OSF Healthcare System Inc.		105	0.1	%	A
Methodist Hospital		105	0.1	%	AA
Total	$	1,173	1.0	%

* See Consolidated Explanatory Notes on page 18.

** Indicated ratings category reflects the highest rating assigned to the underlying obligation from the three rating agencies (S&P, Moody’s and Fitch), or, if no such rating has been assigned, Radian’s rating estimate of the obligation utilizing rating agency models and methodologies to the extent available. Radian’s rating estimates are subject to revision at any time and may differ from the credit ratings ultimately assigned by the three rating agencies.

13 Quarterly Operating Supplement for the Period Ended Dec. 31, 2007 /Consolidated Insured Portfolio Highlights

Radian Asset Assurance Inc.

Consolidated Insured Portfolio Highlights*

($ Millions)

CDO Exposure

	Net Par Outstanding (12/31/2007)		Percent of Total CDO Net Par		Net Par Outstanding (12/31/2006)		Percent of Total CDO Net Par
Direct	$	45,121	96.1	%	$	42,110	95.7	%
Assumed		1,840	3.9	%		1,879	4.3	%
Total	$	46,961	100.0	%	$	43,989	100.0	%

Total CDO Portfolio Rating Distribution**

	Net Par Outstanding (12/31/2007)		Percent of Total CDO Net Par		Net Par Outstanding (12/31/2006)		Percent of Total CDO Net Par
AAA	$	46,491	99.0	%	$	40,448	92.0	%
AA		149	0.3	%		2,357	5.4	%
A		175	0.4	%		505	1.1	%
BBB		141	0.3	%		271	0.6	%
Below Investment Grade		5	0.0	%		8	0.0	%
Not Rated		—	0.0	%		400	0.9	%
Total	$	46,961	100.0	%	$	43,989	100.0	%

Direct CDO Underlying Asset Types

	Direct CDO Net Par Outstanding (12/31/2007)		Percent of Direct CDO Net Par		Direct CDO Net Par Outstanding (12/31/2006)		Percent of Direct CDO Net Par
Corporates	$	38,822	86.0	%	$	36,319	86.2	%
Other		6,299	14.0	%		5,791	13.8	%
Total	$	45,121	100.0	%	$	42,110	100.0	%

* See Consolidated Explanatory Notes on page 18.

** Indicated ratings category reflects the highest rating assigned to the underlying obligation from the three rating agencies (S&P, Moody’s and Fitch), or, if no such rating has been assigned, Radian’s rating estimate of the obligation utilizing rating agency models and methodologies to the extent available. Radian’s rating estimates are subject to revision at any time and may differ from the credit ratings ultimately assigned by the three rating agencies.

14 Quarterly Operating Supplement for the Period Ended Dec. 31, 2007 /Consolidated Insured Portfolio Highlights

Radian Asset Assurance Inc.

Consolidated Insured Portfolio Highlights*

($ Millions)

CDO of ABS, CMBS, and Multi-sector Portfolio

Type of Collateral as a Percentage of Total Pool

Year Insured	Legal Final Maturity	Net Par Outstanding (12/31/2007)			ABS		RMBS		Subprime RMBS		CMBS		Investment Grade Corporate		High Yield Corporate		CDO of ABS		CDO of CDO		Other		Total Collateral Pool
2003	2010	$	100	***	4.7	%	28.5	%	25.0	%	23.8	%	0.0	%	0.0	%	13.2	%	1.5	%	3.3	%	100.0	%
2004	2009		265		33.7	%	35.3	%	0.0	%	0.0	%	28.8	%	2.2	%	0.0	%	0.0	%	0.0	%	100.0	%
2005	2010		150		25.2	%	49.0	%	15.8	%	0.0	%	8.6	%	1.4	%	0.0	%	0.0	%	0.0	%	100.0	%
2006	2046		502		0.0	%	23.0	%	42.5	%	13.5	%	0.0	%	0.0	%	12.6	%	3.6	%	4.8	%	100.0	%
2006	2047		450		0.0	%	0.0	%	0.0	%	100.0	%	0.0	%	0.0	%	0.0	%	0.0	%	0.0	%	100.0	%
2006	2049		599		0.0	%	0.0	%	0.0	%	100.0	%	0.0	%	0.0	%	0.0	%	0.0	%	0.0	%	100.0	%
2006	2056		353		0.0	%	0.0	%	0.0	%	100.0	%	0.0	%	0.0	%	0.0	%	0.0	%	0.0	%	100.0	%
2007	2047		430		0.0	%	0.0	%	0.0	%	100.0	%	0.0	%	0.0	%	0.0	%	0.0	%	0.0	%	100.0	%
Total		$	2,849

Year Insured	S&P Rating	Moody’s Rating	Original AAA Subordination		Radian Attachment Point		Radian Detachment Point		% RMBS A or Better**		% Subprime A or Better**
2003	BBB	N/R	7.8	%	2.0	%	12.0	%	100.0	%	100.0	%
2004	AAA	Aaa	2.2	%	20.7	%	39.4	%	100.0	%	0.0	%
2005	AAA	N/R	4.5	%	13.0	%	38.0	%	100.0	%	100.0	%
2006	AAA****	Aaa	4.9	%	20.0	%	100.0	%	79.2	%	74.6	%
2006	AAA	N/R	2.4	%	6.8	%	30.0	%	0.0	%	0.0	%
2006	AAA	N/R	0.6	%	5.1	%	30.0	%	0.0	%	0.0	%
2006	AAA	N/R	5.5	%	6.5	%	30.0	%	0.0	%	0.0	%
2007	AAA	Aaa	2.4	%	7.0	%	50.0	%	0.0	%	0.0	%

* See Consolidated Explanatory Notes on page 18.

** Ratings are based on Moody’s ratings. If Moody’s rating is unavailable, then S&P rating applies.

*** A loss reserve equal to 100% of net par outstanding has been established for this extendible note program and Radian has paid claims equal to our exposure in the first quarter of 2008.

**** S&P placed this AAA CDO of ABS on negative watch on January 30, 2008.

15 Quarterly Operating Supplement for the Period Ended Dec. 31, 2007 /Consolidated Insured Portfolio Highlights

Radian Asset Assurance Inc.

Consolidated Insured Portfolio Highlights*

($ Millions)

Non-CDO RMBS Portfolio: Breakdown by Asset Type

	Net Par Outstanding (12/31/2007)	% of RMBS Portfolio		Direct**	Assumed Non-HELOCs	Assumed HELOCs	Assumed Total	% 2006/2007 Vintage	Ratings***
									AAA		AA		A		BBB****		BIG*****
Subprime	$423 MM 149 Policies	36.3	%	$147 MM 7 Policies 34.6%	$251 MM 141 Policies 59.4%	$25 MM 1 Policy 5.9%	$276 MM 142 Policies 65.4%	10.7% / 31.6%	19.6	%	0.2	%	25.8	%	11.7	%	42.7	%
Prime	$270 MM 71 Policies	23.2	%	$124 MM 7 Policies 46.0%	$81 MM 49 Policies 30.1%	$65 MM 15 Policy 23.9%	$146 MM 64 Policies 54.0%	7.9% / 26.2%	66.6	%	9.4	%	4.2	%	18.7	%	1.1	%
Alt A	$428 MM 61 Policies	36.8	%	$78 MM 3 Policies 18.3%	$271 MM 52 Policies 63.3%	$79 MM 6 Policies 18.4%	$350 MM 58 Policies 81.7%	25.8% / 32.4%	74.3	%	3.5	%	3.2	%	14.0	%	5.0	%
Second to Pay	$44 MM 14 Policies	3.7	%	$0 MM 0 Policies 0%	$44 MM 14 Policies 100.0%	$0 MM 0 Policies 0%	$44 MM 14 Policies 100.0%	0.0% / 85.8%	100.0	%	0.0	%	0.0	%	0.0	%	0.0	%
Total RMBS	$1,165 MM 295 Policies	100.0	%	$349 MM 17 Policies 29.9%	$647 MM 256 Policies 55.6%	$169 MM 22 Policies 14.5%	$816 MM 278 Policies 70.1%	15.2% / 32.6%	53.6	%	3.6	%	11.5	%	13.7	%	17.6	%

Note: No direct RMBS have been written since 2005 and no direct Subprime RMBS have been written since 2004

* See Consolidated Explanatory Notes on page 18.

** Radian has no direct HELOC exposure

*** Ratings are based on internal ratings

**** 100% of the BBB exposure is assumed through treaties from the monoline primaries

***** All of the BIG exposure is on Radian’s Watch List and reserves have been established for these as needed

16 Quarterly Operating Supplement for the Period Ended Dec. 31, 2007 /Consolidated Insured Portfolio Highlights

Radian Asset Assurance Inc.

Consolidated Insured Portfolio Highlights*

($ Millions)

Net Debt Service Amortization

	Scheduled Net Debt Service Amortization as of 12/31/2007		Ending Net Debt Service Outstanding
2008	$	6,024	$	158,323
2009		7,618		150,705
2010		7,007		143,698
2011		6,995		136,703
2012		11,310		125,393
2013-2017		53,717		71,676
2018-2022		23,097		48,579
2023-2027		17,800		30,779
After 2027		30,779		—
Total	$	164,347

* See Consolidated Explanatory Notes on page 18.

17 Quarterly Operating Supplement for the Period Ended Dec. 31, 2007 /Consolidated Insured Portfolio Highlights

Radian Asset Assurance Inc.

Consolidated Explanatory Notes

1. The accompanying unaudited GAAP financial information includes the accounts of Radian, Radian Asset Assurance Limited, (RAAL) Radian Financial Products Limited, Van-American Insurance Agency, Inc. and Asset Recovery Solutions Group Inc.

These unaudited consolidated financial statements do not include all of the information and disclosures required by generally accepted accounting principles. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto, including the Report of Independent Registered Public Accounting Firm for Radian for the year ended December 31, 2006.

2. Prior year amounts have been restated to conform to current year presentation.

3. For the quarter ended December 31, 2007, the change in fair value of derivatives was $(545.6) million comprised of a change of $(577.8) million in the fair value of derivative financial guaranty contracts partially offset by a $32.2 million change in the fair value of put options on committed preferred securities. The substantial loss resulted from the widening of credit spreads. For the year ended December 31, 2007, the change in fair value of derivatives was $(808.9) million, primarily comprised of a change of $(840.8) million in the fair value of derivative financial guaranty contracts partially offset by a $32.2 million change in the fair value of put options on committed preferred securities. The 2007 year to date results were also impacted by the widening of credit spreads. The 2006 year to date change in fair value of derivative instruments was a gain resulting from the tightening of credit spreads. However, the net gain of $12.3 million included a loss of $(17.2) million from a credit that settled in March 2006.

4. The current quarter’s and year to date increase in losses and loss adjustment expenses is primarily related to one financial guaranty transaction. An allocated non-specific reserve of $100 million was established for this transaction, of which $50 million was recorded during the quarter.

18 Quarterly Operating Supplement for the Period Ended Dec. 31, 2007 /Consolidated Explanatory Notes

Safe Harbor Statement

All statements made herein that address events or developments that we expect or anticipate may occur in the future are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the U.S. Private Securities Litigation Reform Act of 1995. These statements are made on the basis of management’s current views and assumptions with respect to future events. These forward-looking statements, as well as our prospects as a whole, are subject to risks and uncertainties, including the following: changes in general financial and political conditions such as extended national or regional economic recessions (or expansions), changes in income, population trends and changes in household formation patterns, changes in unemployment rates, changes or volatility in interest rates, consumer confidence, or credit spreads; future credit market disruptions - in particular, further deterioration in the municipal finance, corporate credit, mortgage and related credit markets; changes in investor perception of the strength of us individually, financial guaranty providers generally, or in the perception of the strength of our ultimate parent Radian Group Inc. and the other businesses in which it or its other subsidiaries participate, including the mortgage insurance industry; risks faced by the businesses, municipalities or pools of assets covered by our insurance; the loss of a customer with whom we have a concentration of our insurance in force or the influence of large customers; increased severity or frequency of losses associated with certain of our products that are riskier than traditional financial guaranty insurance policies; losses associated with the aging of our municipal finance and structured finance insurance portfolios; ratings actions with respect to Radian Group’s credit ratings or the insurance financial-strength ratings assigned by the major ratings agencies to us or any of our insurance subsidiaries; heightened competition from other insurance providers, from federal and state governmental or quasi-governmental entities and from alternative products to financial guaranty insurance; the application of federal or state consumer, lending, insurance and other applicable laws and regulations, or changes in these laws and regulations or the way they are interpreted; the possibility that we may fail to estimate accurately the likelihood, magnitude and timing of losses in connection with establishing loss reserves for our financial guaranty businesses or to estimate accurately the fair value amounts of derivative financial guaranty contracts in determining gains and losses on these contracts; changes in accounting guidance from the SEC or the Financial Accounting Standards Board regarding income recognition and the treatment of loss reserves in the financial guaranty insurance industry; legal and other limitations on the amount of dividends that we may pay; international expansion of our financial guaranty businesses into new markets and risks associated with our international business activities. For more information regarding these risks and uncertainties, as well as certain additional risks that we face, investors should refer to the risk factors detailed in Part I, Item 1A of Radian Group’s annual report on Form 10-K for the year ended December 31, 2007. We caution you not to place undue reliance on these forward-looking statements, which are current only as of the date on which this information was publicly released. We do not intend to, and disclaim any duty or obligation to, update or revise any forward-looking statements made in this document to reflect new information, future events or for any other reason.

19 Quarterly Operating Supplement for the Period Ended Dec. 31, 2007 /Safe Harbor Statement