Radian (RDN) 8-K Radian Reports Third Quarter Financial Results

Exhibit 99.1

1601 Market Street Philadelphia, Pennsylvania 19103-2337 800 523.1988 215 564.6600	News Release

Contact:
Emily Riley –	phone: 215 231.1035
	email: emily.riley@radian.biz

Radian Reports Third Quarter Financial Results

- Lower than expected claims paid; reduced 2009 claims guidance -

- Risk-to-capital ratio of 16.1:1 -

PHILADELPHIA, November 4, 2009—Radian Group Inc. (NYSE: RDN) today reported a net loss for the quarter ended September 30, 2009, of $70.5 million, or $0.86 per diluted share. This compares to net income of $36.7 million, or $0.46 per diluted share, for the prior-year quarter. Book value per share at September 30, 2009, was $25.91.

“There were several positive trends in the quarter, despite the economic challenges our industry continues to face. We are encouraged by Radian’s lower-than-expected claims activity again this quarter, and the consistently high-quality, lower-risk mortgage insurance business we added to our book,” said Chief Executive Officer S. A. Ibrahim.

Ibrahim added, “Our risk to capital ratio increased slightly from the second quarter to 16.1 to 1, which we believe will allow Radian to comfortably write new, high-quality mortgage insurance business into 2010. We are actively working on strategies to continue writing new business well into the future.”

THIRD QUARTER HIGHLIGHTS

• Radian Guaranty Inc.’s risk-to-capital ratio was 16.1:1 at September 30, 2009, compared to a ratio of 15.9:1 at June 30, 2009. The company expects to have sufficient capital to write high-quality mortgage insurance business into 2010.

• The mortgage insurance provision for losses of $376.5 million reflects higher delinquency counts and the continued aging of delinquencies. Radian expects delinquencies to continue to rise during the fourth quarter.

• Mortgage insurance paid claims were $243.2 million, which again were lower than the company’s forecast, and consisted of $210.1 million of first liens and $33.1 million of second liens. Net claims paid reported of $135.5 million is net of proceeds received from captive terminations of $107.7 million. In the fourth quarter, total first- and

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1601 Market Street Philadelphia, Pennsylvania 19103-2337 800 523.1988 215 564.6600	second-lien claims paid are expected to be approximately $290 million. For the full-year 2009, Radian has reduced its claims-paid expectations from the $1.1 billion range, to a current estimate of $940 million, which includes $87 million of second-lien termination payments.
	•     New mortgage insurance written (NIW) of $3.4 billion in the quarter continued to consist of loans with excellent risk characteristics, including 99.9 percent prime credit quality and 74.6 percent with FICO scores of 740 or above. Market share for the quarter was consistent with levels during the second half of 2008 and the first half of 2009. Separately, approximately $300 million of insurance in the quarter is included in the Home Affordable Refinance Program (HARP); these loans are treated as a modification of existing coverage, therefore HARP volume is not included in Radian’s NIW total. •     The company sold a non-core subsidiary at its approximate book value, and received $19 million in cash for the sale. Radian also repurchased nearly $58 million of its 2011 debt at an average price of approximately $0.79 on the dollar, further contributing to its liquidity position. Radian had $380 million in cash immediately available at September 30, 2009. •     Radian Asset Assurance Inc., the company’s principal financial guaranty subsidiary, continues to serve as an important source of capital support for Radian Guaranty, the company’s mortgage insurance subsidiary, and is expected to continue to provide Radian Guaranty with cash infusions over time. •     As of September 30, 2009, Radian Asset had approximately $935 million in statutory surplus with an additional $1.6 billion in total claims-paying resources.
	RECENT EVENTS
	•     The company fully satisfied its 2009 tax obligation to Radian Guaranty through the transfer of its equity interest in Sherman Financial Group LLC to Radian Guaranty. As previously announced, this obligation of approximately $98 million was required under Radian Group’s tax-sharing agreement with its subsidiaries. •     Radian Asset has experienced continued deterioration in its Trust Preferred Securities (TruPs) CDO portfolio, including the default of one TruPs CDO that is expected to require a statutory loss reserve in the fourth quarter. •     Radian Asset received approval to release approximately $143 million in contingency reserves in its financial guaranty portfolio, which will also strengthen Radian

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1601 Market Street Philadelphia, Pennsylvania 19103-2337 800 523.1988 215 564.6600	Guaranty’s statutory capital position. The reserve release was based on a reduction in the company’s net par outstanding, resulting from the maturing of exposures and other terminations of coverage.
	CONFERENCE CALL
	Radian will discuss each of these items in its conference call today, Wednesday, November 4, 2009, at 10:00 a.m. Eastern time. The conference call will be broadcast live over the Internet athttp://www.ir.radian.biz/phoenix.zhtml?c=112301&p=irol-audioarchives or atwww.radian.biz. The call may be accessed by dialing 877-777-1967 inside the U.S., or 612-332-0335 for international callers, using passcode 119984 or by referencing Radian. A replay of the webcast will be available on the Radian website approximately two hours after the live broadcast ends for a period of one year. A replay of the conference call will be available two and a half hours after the call ends for one week, using the following dial-in numbers and passcode: 800-475-6701 inside the U.S., or 320-365-3844 for international callers, passcode 119984. In addition to the information provided in the company’s earnings news release, other statistical and financial information, which is expected to be referred to during the conference call, will be available on Radian’s Web site under Investors >Quarterly Results, or by clicking onhttp://www.ir.radian.biz/phoenix.zhtml?c=112301&p=irol-earnings.
	About Radian Radian Group Inc. (NYSE: RDN), headquartered in Philadelphia, provides private mortgage insurance and related risk mitigation products and services to mortgage lenders nationwide through its principal operating subsidiary, Radian Guaranty Inc. These services help promote and preserve homeownership opportunities for homebuyers, while protecting lenders from default-related losses on residential first mortgages and facilitating the sale of low-downpayment mortgages in the secondary market. Additional information may be found atwww.radian.biz.
	Financial Results and Supplemental Information Contents (Unaudited) For trend information on all schedules, refer to Radian’s quarterly financial statistics athttp://www.radian.biz/investors/financial/corporate.aspx.
	Exhibit A: Condensed Consolidated Statements of Income Exhibit B: Condensed Consolidated Balance Sheets Exhibit C: Segment Information Quarter Ended September 30, 2009 Exhibit D: Segment Information Quarter Ended September 30, 2008 Exhibit E: Segment Information Nine Months Ended September 30, 2009 Exhibit F: Segment Information Nine Months Ended September 30, 2008 Exhibit G: Financial Guaranty Supplemental Information –

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1601 Market Street Philadelphia, Pennsylvania 19103-2337 800 523.1988 215 564.6600
		For the Quarter and Nine Months Ended and as of September 30, 2009
	Exhibit H:	Financial Guaranty Supplemental Information – For the Quarter and Nine Months Ended and as of September 30, 2009
	Exhibit I:	Mortgage Insurance Supplemental Information – For the Quarter and Nine Months Ended and as of September 30, 2009 New Insurance Written and Risk Written
	Exhibit J:	Mortgage Insurance Supplemental Information – For the Quarter and Nine Months Ended and as of September 30, 2009 Insurance in Force and Risk in Force
	Exhibit K:	Mortgage Insurance Supplemental Information – For the Quarter and Nine Months Ended and as of September 30, 2009 Risk in Force by LTV and Policy Year and other Risk in Force
	Exhibit L:	Mortgage Insurance Supplemental Information – For the Quarter and Nine Months Ended and as of September 30, 2009 Claims and Reserves
	Exhibit M:	Mortgage Insurance Supplemental Information – For the Quarter and Nine Months Ended and as of September 30, 2009 Default Statistics
	Exhibit N:	Mortgage Insurance Supplemental Information – For the Quarter and Nine Months Ended and as of September 30, 2009 Net Premiums Written and Earned, Smart Home, Captives and Persistency
	Exhibit O:	Mortgage Insurance Supplemental Information – For the Quarter Ended and as of September 30, 2009 Reinsurance Progression Toward Attachment – Summary by Book Year
	Exhibit P:	Mortgage Insurance Supplemental Information – For the Quarter Ended and as of September 30, 2009 Modified Pool Risk in Force
	Exhibit Q:	Mortgage Insurance Supplemental Information – For the Quarter and Nine Months Ended and as of September 30, 2009 Alt-A Risk in Force
	Exhibit R:	Financial Services Supplemental Information – For the Quarter and Nine Months Ended and as of September 30, 2009

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Radian Group Inc. and Subsidiaries

Condensed Consolidated Statements of Income

Exhibit A

(In thousands, except per-share data)	Quarter Ended September 30						Nine Months Ended September 30
	2009			2008			2009			2008
Revenues:
Net premiums written - insurance	$	(38,060	) (1)	$	202,451		$	280,597	(1)	$	669,402
Net premiums earned - insurance	$	209,487		$	249,718		$	614,331		$	740,776
Net investment income		54,032			65,215			163,566			196,322
Change in fair value of derivative instruments		(30,857	)		164,757			(42,955	)		928,792
Net gains (losses) on other financial instruments		96,508			(48,602	)		175,962			(74,642	)
Total other-than-temporary impairment losses		(3	)		(15,135	)		(873	)		(52,230	)
Losses recognized in other comprehensive loss		—			—			—			—
Net impairment losses recognized in earnings		(3	)		(15,135	)		(873	)		(52,230	)
Other income		2,467			2,756			10,487			9,591
Total revenues		331,634			418,709			920,518			1,748,609
Expenses:
Provision for losses		404,904			544,915			864,408			1,586,505
Provision for premium deficiency		(31,569	)		(252,170	) (2)		(77,569	)		135,727	(2)
Policy acquisition costs		14,193			20,770			54,114			120,628	(3)
Other operating expenses		54,034			80,781			161,271			199,771
Interest expense		11,296			13,852			35,890			40,177
Total expenses		452,858			408,148			1,038,114			2,082,808
Equity in net income of affiliates		7,946			15,798			23,608			44,028
Pretax (loss) income		(113,278	)		26,359			(93,988	)		(290,171	)
Income tax benefit		(42,828	)		(10,340	)		(37,976	)		(129,984	)
Net (loss) income	$	(70,450	)	$	36,699		$	(56,012	)	$	(160,187	)
Diluted net (loss) income per share (4)	$	(0.86	)	$	0.46		$	(0.69	)	$	(2.01	)
(1)    Includes the reversal of $185.6 million of premiums written related to the Ambac commutation in our Financial Guaranty segment. (2)    Includes $(271.8) million for first-lien and $19.6 million for second-lien in the third quarter of 2008, and $150.1 million for first-lien and $(14.4) million for second-lien for the nine months of 2008. (3)    Includes the acceleration of $50.8 million of deferred policy acquisition cost amortization in the nine months ended September 30, 2008, as a result of the establishment of a first-lien premium deficiency reserve in the second quarter of 2008.
(4)    Weighted average shares outstanding (In thousands)
Average common shares outstanding		81,749			79,960			81,761			79,603
Increase in shares-potential exercise of options-diluted basis		—			511			—	��		—
Weighted average shares outstanding		81,749			80,471			81,761			79,603

For Trend Information, refer to our Quarterly Financial Statistics on Radian’s (RDN) website.

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Radian Group Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

Exhibit B

(In thousands, except per-share data)	September 30 2009			December 31 2008			September 30 2008
Assets:
Cash and investments	$	6,466,527		$	6,060,601		$	6,330,214
Investments in affiliates		112,034			99,712			87,256
Deferred policy acquisition costs		158,813			160,526			178,581
Prepaid federal income taxes		—			248,828			248,828
Derivative assets		153,136			179,515			171,116
Deferred income taxes, net		351,575			446,102			268,808
Reinsurance recoverables		597,067			492,359			310,984
Other assets		525,260			428,476			450,449
Total assets	$	8,364,412		$	8,116,119		$	8,046,236
Liabilities and stockholders' equity:
Unearned premiums	$	872,375		$	916,724		$	1,000,725
Reserve for losses and loss adjustment expenses		3,512,999			3,224,542			2,680,381
Reserve for premium deficiency		9,291			86,861			331,373
Long-term debt and other borrowings		698,703			857,802			908,282
Variable interest entity debt		328,986			160,035			127,624
Derivative liabilities		394,386			519,260			343,296
Other liabilities		406,802			320,185			322,229
Total liabilities		6,223,542			6,085,409			5,713,910
Common stock		100			98			98
Additional paid-in capital		477,503			462,647			453,836
Retained earnings		1,694,219			1,766,946			2,017,542
Accumulated other comprehensive income		(30,952	)		(198,981	)		(139,150	)
Total common stockholders' equity		2,140,870			2,030,710			2,332,326
Total liabilities and stockholders' equity	$	8,364,412		$	8,116,119		$	8,046,236
Book value per share	$	25.91		$	25.06		$	28.90

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Radian Group Inc. and Subsidiaries

Segment Information

Quarter Ended September 30, 2009

Exhibit C

(In thousands)	Mortgage Insurance			Financial Guaranty			Financial Services			Total
Revenues:
Net premiums written - insurance	$	149,000		$	(187,060	)	$	—		$	(38,060	)
Net premiums earned - insurance	$	186,859		$	22,628		$	—		$	209,487
Net investment income		33,822			20,209			1			54,032
Change in fair value of derivative instruments		6,678			(37,535	)		—			(30,857	)
Net gains on other financial instruments		38,583			57,925			—			96,508
Net impairment losses recognized in earnings		(3	)		—			—			(3	)
Other income		2,299			97			71			2,467
Total revenues		268,238			63,324			72			331,634
Expenses:
Provision for losses		376,488			28,416			—			404,904
Provision for premium deficiency		(31,569	)		—			—			(31,569	)
Policy acquisition costs		8,672			5,521			—			14,193
Other operating expenses		39,440			18,877			(4,283	)		54,034
Interest expense		3,739			7,557			—			11,296
Total expenses		396,770			60,371			(4,283	)		452,858
Equity in net income of affiliates		—			—			7,946			7,946
Pretax (loss) income		(128,532	)		2,953			12,301			(113,278	)
Income tax (benefit) provision		(45,912	)		(1,245	)		4,329			(42,828	)
Net (loss) income	$	(82,620	)	$	4,198		$	7,972		$	(70,450	)
Cash and investments	$	4,093,265		$	2,373,262		$	—		$	6,466,527
Deferred policy acquisition costs		30,528			128,285			—			158,813
Total assets		5,231,755			3,015,532			117,125			8,364,412
Unearned premiums		266,122			606,253			—			872,375
Reserve for losses and loss adjustment expenses		3,387,740			125,259			—			3,512,999
Derivative liabilities		17,018			377,368			—			394,386

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Radian Group Inc. and Subsidiaries

Segment Information

Quarter Ended September 30, 2008

Exhibit D

(In thousands)	Mortgage Insurance			Financial Guaranty			Financial Services		Total
Revenues:
Net premiums written - insurance	$	188,583		$	13,868		$	—	$	202,451
Net premiums earned - insurance	$	196,207		$	53,511		$	—	$	249,718
Net investment income		38,017			27,198			—		65,215
Change in fair value of derivative instruments		8,606			156,151			—		164,757
Net (losses) gains on other financial instruments		(36,579	)		(12,106	)		83		(48,602	)
Net impairment losses recognized in earnings		(3,346	)		(11,789	)		—		(15,135	)
Other income		2,561			58			137		2,756
Total revenues		205,466			213,023			220		418,709
Expenses:
Provision for losses		519,257			25,658			—		544,915
Provision for premium deficiency		(252,170	)		—			—		(252,170	)
Policy acquisition costs		5,327			15,443			—		20,770
Other operating expenses		43,771			36,885			125		80,781
Interest expense		6,718			7,134			—		13,852
Total expenses		322,903			85,120			125		408,148
Equity in net income of affiliates		—			—			15,798		15,798
Pretax (loss) income		(117,437	)		127,903			15,893		26,359
Income tax (benefit) provision		(70,473	)		53,550			6,583		(10,340	)
Net (loss) income	$	(46,964	)	$	74,353		$	9,310	$	36,699
Cash and investments	$	3,899,815		$	2,430,399		$	—	$	6,330,214
Deferred policy acquisition costs		17,997			160,584			—		178,581
Total assets		4,928,234			2,934,032			183,970		8,046,236
Unearned premiums		351,200			649,525			—		1,000,725
Reserve for losses and loss adjustment expenses		2,496,412			183,969			—		2,680,381
Derivative liabilities		220,363			122,933			—		343,296

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Radian Group Inc. and Subsidiaries

Segment Information

Nine Months Ended September 30, 2009

Exhibit E

(In thousands)	Mortgage Insurance			Financial Guaranty			Financial Services			Total
Revenues:
Net premiums written - insurance	$	465,878		$	(185,281	)	$	—		$	280,597
Net premiums earned - insurance	$	534,789		$	79,542		$	—		$	614,331
Net investment income		97,465			66,098			3			163,566
Change in fair value of derivative instruments		(28,455	)		(14,500	)		—			(42,955	)
Net gains on other financial instruments		64,250			111,712			—			175,962
Net impairment losses recognized in earnings		(850	)		(23	)		—			(873	)
Other income		9,865			316			306			10,487
Total revenues		677,064			243,145			309			920,518
Expenses:
Provision for losses		840,974			23,434			—			864,408
Provision for premium deficiency		(77,569	)		—			—			(77,569	)
Policy acquisition costs		22,332			31,782			—			54,114
Other operating expenses		110,724			54,619			(4,072	)		161,271
Interest expense		12,052			23,838			—			35,890
Total expenses		908,513			133,673			(4,072	)		1,038,114
Equity in net income of affiliates		—			—			23,608			23,608
Pretax (loss) income		(231,449	)		109,472			27,989			(93,988	)
Income tax (benefit) provision		(73,048	)		25,004			10,068			(37,976	)
Net (loss) income	$	(158,401	)	$	84,468		$	17,921		$	(56,012	)

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Radian Group Inc. and Subsidiaries

Segment Information

Nine Months Ended September 30, 2008

Exhibit F

(In thousands)	Mortgage Insurance			Financial Guaranty			Financial Services		Total
Revenues:
Net premiums written - insurance	$	598,864		$	70,538		$	—	$	669,402
Net premiums earned - insurance	$	605,568		$	135,208		$	—	$	740,776
Net investment income		115,803			80,505			14		196,322
Change in fair value of derivative instruments		105,548			823,244			—		928,792
Net (losses) gains on other financial instruments		(47,983	)		(26,779	)		120		(74,642	)
Net impairment losses recognized in earnings		(18,231	)		(33,999	)		—		(52,230	)
Other income		9,051			237			303		9,591
Total revenues		769,756			978,416			437		1,748,609
Expenses:
Provision for losses		1,539,561			46,944			—		1,586,505
Provision for premium deficiency		135,727			—			—		135,727
Policy acquisition costs		82,473			38,155			—		120,628
Other operating expenses		126,644			72,642			485		199,771
Interest expense		21,140			18,788			249		40,177
Total expenses		1,905,545			176,529			734		2,082,808
Equity in net income of affiliates		—			—			44,028		44,028
Pretax (loss) income		(1,135,789	)		801,887			43,731		(290,171	)
Income tax (benefit) provision		(428,186	)		279,537			18,665		(129,984	)
Net (loss) income	$	(707,603	)	$	522,350		$	25,066	$	(160,187	)

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Radian Group Inc.

Financial Guaranty Supplemental Information

For the Quarter and Nine Months Ended and as of September 30, 2009

Exhibit G

(In thousands)	Quarter Ended September 30						Nine Months Ended September 30
	2009			2008			2009			2008
Net Premiums Earned:
Public finance direct	$	9,363		$	13,380		$	35,750		$	43,194
Public finance reinsurance		11,071			32,310			38,297			65,145
Structured direct		1,321			3,569			5,156			11,211
Structured reinsurance		834			4,472			15,130			15,163
Trade credit reinsurance		39			(220	)		174			495
Net Premiums Earned - insurance		22,628			53,511			94,507			135,208
Impact of commutations		—			—			(14,965	)		—
Total Net Premiums Earned - insurance	$	22,628		$	53,511		$	79,542		$	135,208
Refundings included in earned premium	$	8,553		$	27,326		$	32,076		$	55,647
Claims paid:
Trade credit reinsurance	$	41		$	449		$	912		$	1,432
Financial Guaranty		84,976	(1)		6,450			123,761	(1)		114,040	(2)
Total	$	85,017		$	6,899		$	124,673		$	115,472

Balance Sheet impact of initial adoption of the accounting standard for financial guarantee insurance contracts on January 1, 2009:
($ in millions)
Increase in unearned premiums	$	(292.8	)
Increase in premiums receivable		161.4
Increase in deferred policy acquisition costs		66.0
Decrease in reserve for losses and LAE		8.2
Decrease in deferred taxes, net		20.2
Increase in premium taxes payable		(0.6	)
Decrease in equity	$	(37.6	)
Pre-tax Income Statement impact of Ambac Commutation in Q2 2009:
($ in millions)
Decrease in premiums earned	$	(15.3	)
Decrease in provision for losses		38.6
Increase in amortization of policy acquisition costs		(8.9	)
Increase in pre-tax income	$	14.4
Balance Sheet impact of Ambac Commutation in Q3 2009:
($ in millions)
Decrease in:
Cash and investments	$	100.0
Premiums receivable		93.2
Unearned premiums		185.6
Reserve for losses and LAE		53.9
Deferred policy acquisition costs		46.3

(1) Includes $53.9 million related to Ambac commutation.

(2) Includes a $100 million payment related to one CDO of an ABS transaction that was fully reserved for in 2007.

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Radian Group Inc.

Financial Guaranty Supplemental Information

For the Quarter and Nine Months Ended and as of September 30, 2009

Exhibit H

($ in thousands, except ratios)	September 30 2009			December 31 2008		September 30 2008
Statutory Information:
Capital and surplus	$	939,880		$	968,197	$	957,177
Contingency reserve		494,058			515,023		510,195
Qualified statutory capital		1,433,938			1,483,220		1,467,372
Unearned premium reserve		616,788			729,274		818,365
Loss and loss expense reserve		57,259			82,340		70,621
Total statutory policyholders’ reserves		2,107,985			2,294,834		2,356,358
Present value of installment premiums		274,655			380,666		402,223
Soft capital facilities		150,000			150,000		150,000
Total statutory claims paying resources	$	2,532,640		$	2,825,500	$	2,908,581
Net debt service outstanding	$	112,780,855		$	138,430,925	$	156,928,647
Capital leverage ratio (1)		79			93		107
Claims paying leverage ratio (2)		45			49		54
Net par outstanding by product:
Public finance direct	$	18,081,562		$	17,836,221	$	18,344,046
Public finance reinsurance		24,664,615			31,578,163		40,420,433
Structured direct		44,258,529			46,001,355		46,695,176
Structured reinsurance		2,324,867			5,310,004		5,567,853
Total	$	89,329,573	(3)	$	100,725,743	$	111,027,508
Reserve for losses and LAE-GAAP Basis:
Financial Guaranty	$	117,585		$	219,671	$	163,070
Trade Credit		7,674			14,877		20,899
Total	$	125,259		$	234,548	$	183,969

(1) The capital leverage ratio is derived by dividing net debt service outstanding by qualified statutory capital.

(2) The claims paying leverage ratio is derived by dividing net debt service outstanding by total statutory claims paying resources.

(3) Reduction due to $9.8 billion of par that was commuted in connection with the Ambac commutation in July 2009. Also included in public finance net par outstanding is $2.4 billion for legally defeased bond issues where our financial guaranty policy has not been extinguished but cash or securities have been deposited in an escrow account for the benefit of bondholders. The accounting standard for financial guarantee insurance contracts requires that these contracts continue to be accounted for as outstanding contracts despite the elimination of substantially all risk.

Page 12

Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter and Nine Months Ended and as of September 30, 2009

Exhibit I

($ in millions)	Quarter Ended September 30										Nine Months Ended September 30
	2009					2008					2009					2008
	$			%		$			%		$			%		$			%
Primary new insurance written
Flow	$	3,446		100.0	%	$	7,524		99.8	%	$	14,555		100.0	%	$	26,240		95.5	%
Structured		—		—			16		0.2	%		—		—			1,234		4.5	%
Total Primary	$	3,446		100.0	%	$	7,540		100.0	%	$	14,555		100.0	%	$	27,474		100.0	%
Flow
Prime	$	3,441		99.9	%	$	7,405		98.4	%	$	14,530		99.8	%	$	24,356		92.8	%
Alt-A		1		—			96		1.3	%		11		0.1	%		1,154		4.4	%
A minus and below		4		0.1	%		23		0.3	%		14		0.1	%		730		2.8	%
Total Flow	$	3,446		100.0	%	$	7,524		100.0	%	$	14,555		100.0	%	$	26,240		100.0	%
Structured
Prime	$	—		—		$	16		100.0	%	$	—		—		$	1,232		99.8	%
Alt-A		—		—			—		0.0	%		—		—			2		0.2	%
Total Structured	$	—		—		$	16		100.0	%	$	—		—		$	1,234		100.0	%
Total
Prime	$	3,441		99.9	%	$	7,421		98.4	%	$	14,530		99.8	%	$	25,588		93.1	%
Alt-A		1		—			96		1.3	%		11		0.1	%		1,156		4.2	%
A minus and below		4		0.1	%		23		0.3	%		14		0.1	%		730		2.7	%
Total Primary	$	3,446		100.0	%	$	7,540		100.0	%	$	14,555		100.0	%	$	27,474		100.0	%
Total primary new insurance written by FICO score
Flow
>=740	$	2,570		74.6	%	$	4,082		54.2	%	$	10,464		71.9	%	$	11,912		45.4	%
680-739		831		24.1	%		2,662		35.4	%		3,822		26.3	%		9,729		37.1	%
620-679		45		1.3	%		773		10.3	%		268		1.8	%		4,223		16.1	%
<=619		—		—			7		0.1	%		1		—			376		1.4	%
Total Flow	$	3,446		100.0	%	$	7,524		100.0	%	$	14,555		100.0	%	$	26,240		100.0	%
Structured
>=740	$	—		—		$	12		75.0	%	$	—		—		$	780		63.2	%
680-739		—		—			4		25.0	%		—		—			437		35.4	%
620-679		—		—	��		—		0.0	%		—		—			17		1.4	%
Total Structured	$	—		—		$	16		100.0	%	$	—		—		$	1,234		100.0	%
Total
>=740	$	2,570		74.6	%	$	4,094		54.3	%	$	10,464		71.9	%	$	12,692		46.2	%
680-739		831		24.1	%		2,666		35.3	%		3,822		26.3	%		10,166		37.0	%
620-679		45		1.3	%		773		10.3	%		268		1.8	%		4,240		15.4	%
<=619		—		—			7		0.1	%		1		—			376		1.4	%
Total Primary	$	3,446		100.0	%	$	7,540		100.0	%	$	14,555		100.0	%	$	27,474		100.0	%
Percentage of primary new insurance written
Refinances		30	%				20	%				43	%				33	%
95.01% LTV and above		0.3	%				3	%				0.1	%				13	%
ARMs
Less than 5 years		0.1	%				1	%				0.1	%				1	%
5 years and longer		2.3	%				10	%				0.9	%				9	%
Primary risk written
Flow	$	756		100.0	%	$	1,170		99.9	%	$	3,130		100.0	%	$	6,317		95.2	%
Structured		—		—			2		0.1	%		—		—			316		4.8	%
Total Primary	$	756		100.0	%	$	1,172		100.0	%	$	3,130		100.0	%	$	6,633		100.0	%

Page 13

Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter and Nine Months Ended and as of September 30, 2009

Exhibit J

($ in millions)	September 30 2009					September 30 2008
	$			%		$			%
Primary insurance in force
Flow	$	122,912		79.9	%	$	119,593		77.5	%
Structured		30,876		20.1	%		34,699		22.5	%
Total Primary	$	153,788		100.0	%	$	154,292		100.0	%
Prime	$	113,518		73.8	%	$	109,432		70.9	%
Alt-A		30,012		19.5	%		33,404		21.7	%
A minus and below		10,258		6.7	%		11,456		7.4	%
Total Primary	$	153,788		100.0	%	$	154,292		100.0	%
Primary risk in force
Flow	$	30,388		88.0	%	$	29,968		86.4	%
Structured		4,131		12.0	%		4,701		13.6	%
Total Primary	$	34,519		100.0	%	$	34,669		100.0	%
Flow
Prime	$	25,253		83.1	%	$	24,242		80.9	%
Alt-A		3,257		10.7	%		3,674		12.3	%
A minus and below		1,878		6.2	%		2,052		6.8	%
Total Flow	$	30,388		100.0	%	$	29,968		100.0	%
Structured
Prime	$	2,152		52.1	%	$	2,451		52.1	%
Alt-A		1,305		31.6	%		1,451		30.9	%
A minus and below		674		16.3	%		799		17.0	%
Total Structured	$	4,131		100.0	%	$	4,701		100.0	%
Total
Prime	$	27,405		79.4	%	$	26,693		77.0	%
Alt-A		4,562		13.2	%		5,125		14.8	%
A minus and below		2,552		7.4	%		2,851		8.2	%
Total Primary	$	34,519		100.0	%	$	34,669		100.0	%
Total primary risk in force by FICO score
Flow
>=740	$	10,449		34.4	%	$	8,999		30.0	%
680-739		11,002		36.2	%		11,101		37.0	%
620-679		7,561		24.9	%		8,318		27.8	%
<=619		1,376		4.5	%		1,550		5.2	%
Total Flow	$	30,388		100.0	%	$	29,968		100.0	%
Structured
>=740	$	1,114		27.0	%	$	1,254		26.7	%
680-739		1,314		31.8	%		1,452		30.9	%
620-679		1,083		26.2	%		1,255		26.7	%
<=619		620		15.0	%		740		15.7	%
Total Structured	$	4,131		100.0	%	$	4,701		100.0	%
Total
>=740	$	11,563		33.5	%	$	10,253		29.6	%
680-739		12,316		35.7	%		12,553		36.2	%
620-679		8,644		25.0	%		9,573		27.6	%
<=619		1,996		5.8	%		2,290		6.6	%
Total Primary	$	34,519		100.0	%	$	34,669		100.0	%
Percentage of primary risk in force
Refinances		31	%				31	%
95.01% LTV and above		21	%				23	%
ARMs
Less than 5 years		8	%				9	%
5 years and longer		8	%				9	%
Pool risk in force
Prime	$	1,973		70.3	%	$	2,096		70.7	%
Alt-A		284		10.1	%		290		9.8	%
A minus and below		549		19.6	%		577		19.5	%
Total	$	2,806		100.0	%	$	2,963		100.0	%

Page 14

Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter and Nine Months Ended and as of September 30, 2009

Exhibit K

($ in millions)	September 30 2009				September 30 2008
	$		%		$		%
Total primary risk in force by LTV
85.00% and below	$	3,556	10.3	%	$	3,659	10.6	%
85.01% to 90.00%		12,690	36.7	%		12,045	34.7	%
90.01% to 95.00%		11,142	32.3	%		11,003	31.7	%
95.01% and above		7,131	20.7	%		7,962	23.0	%
Total	$	34,519	100.0	%	$	34,669	100.0	%
Total primary risk in force by policy year
2005 and prior	$	10,140	29.4	%	$	11,983	34.6	%
2006		4,650	13.4	%		5,342	15.4	%
2007		9,823	28.4	%		10,896	31.4	%
2008		6,887	20.0	%		6,448	18.6	%
2009		3,019	8.8	%		—	—
Total	$	34,519	100.0	%	$	34,669	100.0	%
Total pool risk in force by policy year
2005 and prior	$	2,280	81.2	%	$	2,407	81.3	%
2006		241	8.6	%		255	8.6	%
2007		227	8.1	%		241	8.1	%
2008		58	2.1	%		60	2.0	%
Total pool risk in force	$	2,806	100.0	%	$	2,963	100.0	%
Other risk in force
Second-lien
1st loss	$	184			$	289
2nd loss		100				407
NIMs		418				456
International
1st loss-Hong Kong primary mortgage insurance		316				442
Reinsurance		—				139
Credit default swaps		3,132				7,567
Other
Domestic credit default swaps		—				162
Total other risk in force	$	4,150			$	9,462
Risk to capital ratio-Radian Guaranty only (1)		16.1:1				14.5:1

(1) Starting June 30, 2009, risk in force on policies currently in default and for which loss reserves have been established are deducted from total risk in force used for our risk to capital calculations. Risk to capital ratios for the prior periods have not been restated to conform with this presentation.

Page 15

Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter and Nine Months Ended and as of September 30, 2009

Exhibit L

($ in thousands)	Quarter Ended September 30						Nine Months Ended September 30
	2009			2008			2009			2008
Direct claims paid
Prime	$	104,605		$	98,269		$	246,816		$	222,975
Alt-A		61,538			68,960			149,249			152,438
A minus and below		43,989			65,280			115,873			162,911
Second-lien and other		10,790			44,882			51,735			138,094
Subtotal		220,922			277,391			563,673			676,418
Impact of captive terminations		(107,747	)		—			(107,747	)		—
Impact of second-lien terminations		22,323			—			87,323			—
Total	$	135,498		$	277,391		$	543,249		$	676,418
Average claim paid (1)
Prime	$	43.2		$	45.0		$	42.2		$	40.0
Alt-A		55.4			58.7			54.0			53.9
A minus and below		39.6			42.6			38.8			38.6
Second-lien and other		42.5			36.9			42.2			35.1
Total	$	45.1		$	45.4		$	44.0		$	40.8
Loss ratio - GAAP Basis		201.2	%		258.1	%		156.7	%		244.6	%
Expense ratio - GAAP Basis		25.7	%		24.4	%		24.8	%		33.2	% (2)
		226.9	%		282.5	%		181.5	%		277.8	%
Reserve for losses by category
Prime	$	1,125,684		$	667,349
Alt-A		922,420			844,551
A minus and below		454,844			432,001
Pool insurance		211,399			87,429
Second-lien		81,462			153,839
Other		74			1,436
Reserve for losses, net		2,795,883			2,186,605
Reinsurance recoverable		591,857	(3)		309,807
Total	$	3,387,740		$	2,496,412

(1) Calculated prior to the impact of captive and second-lien terminations.

(2) Includes the acceleration of $50.8 million of deferred policy acquisition cost amortization, as a result of the establishment of a first-lien premium deficiency reserve in the second quarter of 2008.

(3) Reinsurance recoverable on ceded losses related to captives ($483 million) and Smart Home ($109 million).

16

Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter and Nine Months Ended and as of September 30, 2009

Exhibit M

	September 30 2009		December 31 2008		September 30 2008
Default Statistics
Primary insurance:
Flow
Prime
Number of insured loans	621,794		624,970		619,035
Number of loans in default	69,287		44,575		33,330
Percentage of loans in default	11.14	%	7.13	%	5.38	%
Alt-A
Number of insured loans	62,860		68,948		70,814
Number of loans in default	21,563		16,959		13,853
Percentage of loans in default	34.30	%	24.60	%	19.56	%
A minus and below
Number of insured loans	55,657		59,189		60,946
Number of loans in default	19,885		15,768		13,436
Percentage of loans in default	35.73	%	26.64	%	22.05	%
Total Flow
Number of insured loans	740,311		753,107		750,795
Number of loans in default	110,735		77,302		60,619
Percentage of loans in default	14.96	%	10.26	%	8.07	%
Structured
Prime
Number of insured loans	60,931		67,165		68,744
Number of loans in default	8,496		6,692		5,900
Percentage of loans in default	13.94	%	9.96	%	8.58	%
Alt-A
Number of insured loans	74,911		80,491		82,187
Number of loans in default	25,098		18,747		15,499
Percentage of loans in default	33.50	%	23.29	%	18.86	%
A minus and below
Number of insured loans	19,861		22,315		23,337
Number of loans in default	7,669		7,812		7,784
Percentage of loans in default	38.61	%	35.01	%	33.35	%
Total Structured
Number of insured loans	155,703		169,971		174,268
Number of loans in default	41,263		33,251		29,183
Percentage of loans in default	26.50	%	19.56	%	16.75	%
Total Primary Insurance
Prime
Number of insured loans	682,725		692,135		687,779
Number of loans in default	77,783		51,267		39,230
Percentage of loans in default	11.39	%	7.41	%	5.70	%
Alt-A
Number of insured loans	137,771		149,439		153,001
Number of loans in default	46,661		35,706		29,352
Percentage of loans in default	33.87	%	23.89	%	19.18	%
A minus and below
Number of insured loans	75,518		81,504		84,283
Number of loans in default	27,554		23,580		21,220
Percentage of loans in default	36.49	%	28.93	%	25.18	%
Total Primary Insurance
Number of insured loans	896,014		923,078		925,063
Number of loans in default (1)	151,998		110,553		89,802
Percentage of loans in default	16.96	%	11.98	%	9.71	%
Pool insurance:
Number of loans in default (2)	36,889		32,677		29,487

(1) Includes approximately 385, 539 and 483 defaults at September 30, 2009, December 31, 2008 and September 30, 2008, respectively, where reserves have not been established because no claim payment is currently anticipated.

(2) Includes approximately 17,859, 21,719 and 20,965 defaults at September 30, 2009, December 31, 2008 and September 30, 2008, respectively, where reserves have not been established because no claim payment is currently anticipated.

Page 17

Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter and Nine Months Ended and as of September 30, 2009

Exhibit N

	Quarter Ended September 30						Nine Months Ended September 30
	2009			2008			2009			2008
Net Premiums Written (In thousands)
Primary and Pool Insurance	$	169,180		$	186,524		$	483,872		$	578,770
Second-lien		(1,493	) (1)		2,044			(750	) (1)		8,430
International		(18,687	) (1)		15			(17,244	) (1)		11,664
Total Net Premiums Written - Insurance	$	149,000		$	188,583		$	465,878		$	598,864
Net Premiums Earned (In thousands)
Primary and Pool Insurance	$	182,582		$	187,596		$	517,770		$	575,017
Second-lien		1,264			3,250			4,649			14,378
International		3,013			5,361			12,370			16,173
Total Net Premiums Earned - Insurance	$	186,859		$	196,207		$	534,789		$	605,568
SMART HOME (In millions)
Ceded Premiums Written	$	2.4		$	3.1		$	8.0		$	10.0
Ceded Premiums Earned	$	2.4		$	3.1		$	8.0		$	10.0
1st Lien Captives
Premiums ceded to captives (In millions)	$	31.0		$	34.6		$	103.0		$	104.4
% of total premiums		14.3	%		15.4	%		16.4	%		15.2	%
NIW subject to captives (In millions)	$	144.3		$	2,103.6		$	1,615.7		$	10,268.1
% of primary NIW		4.2	%		27.9	%		11.1	%		37.4	%
IIF included in captives (2)		34.2	%		36.6	%
RIF included in captives (2)		47.6	%		41.0	%
Persistency (twelve months ended September 30)		87.0	%		83.9	%
	September 30 2009			September 30 2008
SMART HOME
% of Primary RIF included in Smart Home Transactions (2)		3.4	%		3.9	%

(1) Reflects the impact of second-lien and international terminations.

(2) Radian reinsures the middle layer risk positions, while retaining a significant portion of the total risk comprising the first loss and most remote risk positions.

Page 18

Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter Ended and as of September 30, 2009

Exhibit O

Reinsurance Progression Toward Attachment - Summary by Book Year (1)

($ in millions)	Original Book RIF		Progression to Attachment Point	September 30 2009										December 31 2008 (5)
Book Year (2):				Gross Current RIF		Ceded Current RIF(3)		Net Current RIF		Ever-to- Date Incurred Losses		Reinsurance Benefit (4)		Gross Current RIF		Ceded Current RIF(3)		Net Current RIF		Ever-to- Date Incurred Losses		Reinsurance Benefit (4)
Pre-2006			0-50%	$	445	$	79	$	366	$	152			$	1,120	$	558	$	562	$	239
Pre-2006			50-75%		423		221		202		99				942		349		593		142
Pre-2006			75-99%		580		239		341		131				1,084		397		687		160
Pre-2006			Attached		1,792		466		1,326		356	$	123		1,355		237		1,118		184	$	75
Pre-2006 Total	$	22,732		$	3,240	$	1,005	$	2,235	$	738	$	123	$	4,501	$	1,541	$	2,960	$	725	$	75
2006			0-50%	$	2	$	—	$	2	$	—			$	32	$	2	$	30	$	1
2006			50-75%		21		2		19		1				62		4		58		3
2006			75-99%		8		1		7		1				310		42		268		18
2006			Attached		1,855		264		1,591		342	$	179		2,074		270		1,804		290	$	161
2006 Total	$	2,954		$	1,886	$	267	$	1,619	$	344	$	179	$	2,478	$	318	$	2,160	$	312	$	161
2007			0-50%	$	13	$	1	$	12	$	—			$	31	$	2	$	29	$	—
2007			50-75%		15		1		14		1				225		12		213		8
2007			75-99%		1		—		1		—				71		7		64		3
2007			Attached		3,720		406		3,314		389	$	171		4,329		454		3,875		350	$	147
2007 Total	$	4,545		$	3,749	$	408	$	3,341	$	390	$	171	$	4,656	$	475	$	4,181	$	361	$	147
2008			0-50%	$	548	$	36	$	512	$	10			$	2,167	$	197	$	1,970	$	25
2008			50-75%		1,489		166		1,323		42				42		4		38		1
2008			75-99%		—		—		—		—				—		—		—		—
2008			Attached		225		19		206		20	$	11		190		15		175		16	$	9
2008 Total	$	2,553		$	2,262	$	221	$	2,041	$	72	$	11	$	2,399	$	216	$	2,183	$	42	$	9
2009			0-50%	$	282	$	12	$	270	$	—			$	—	$	—	$	—	$	—
2009			50-75%		—		—		—		—				—		—		—		—
2009			75-99%		—		—		—		—				—		—		—		—
2009			Attached		—		—		—		—	$	—		—		—		—		—	$	—
2009 Total	$	290		$	282	$	12	$	270	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Quota Share			0-50%	$	—	$	—	$	—	$	—			$	—	$	—	$	—	$	—
Quota Share			50-75%		—		—		—		—				—		—		—		—
Quota Share			75-99%		—		—		—		—				—		—		—		—
Quota Share			Attached		105		34		71		32	$	14		116		37		79		27	$	12
Quota Share Total	$	313		$	105	$	34	$	71	$	32	$	14	$	116	$	37	$	79	$	27	$	12
Total Captive (Including Quota Share)	$	33,387		$	11,524	$	1,947	$	9,577	$	1,576	$	498	$	14,150	$	2,587	$	11,563	$	1,467	$	404
SmartHome			0-50%	$	33	$	15	$	18	$	11			$	117	$	51	$	66	$	27
SmartHome			50-75%		74		29		45		22				—		—		—		—
SmartHome			75-99%		—		—		—		—				—		—		—		—
SmartHome			Attached		1,061		504		557		407	$	111		1,188		521		667		346	$	91
Total SmartHome	$	3,900		$	1,168	$	548	$	620	$	440	$	111	$	1,305	$	572	$	733	$	373	$	91

(1) Data is presented in the aggregate for all trusts for captives active at each period end only. Actual trust attachment points and exit points vary by individual contract. The attachment point is calculated at the contract/deal level and is based on Total Incurred Losses which are defined as claims paid ever-to-date plus loss reserves.

(2) Book year figures may include loans from additional periods pursuant to reinsurance agreement terms and conditions.

(3) Risk ceded to reinsurers based on individual contract terms.

(4) Captive Benefit is defined as ceded reserves at period end plus ever-to-date claims paid by the trust.

(5) Revised from December 31, 2008 originally presented.

Page 19

Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter Ended and as of September 30, 2009

Exhibit P

($ in millions)	September 30 2009				September 30 2008
	$		%		$		%
Modified Pool Risk in Force
Prime
2005 and prior	$	81	54.0	%	$	86	55.1	%
2006		45	30.0	%		44	28.2	%
2007		20	13.3	%		22	14.1	%
2008		4	2.7	%		4	2.6	%
Total	$	150	100.0	%	$	156	100.0	%
Alt-A
2005 and prior	$	186	28.5	%	$	200	29.8	%
2006		160	24.5	%		165	24.5	%
2007		303	46.4	%		304	45.2	%
2008		4	0.6	%		4	0.5	%
Total	$	653	100.0	%	$	673	100.0	%
A minus and below
2005 and prior	$	13	56.5	%	$	15	60.0	%
2006		3	13.0	%		3	12.0	%
2007		7	30.5	%		7	28.0	%
Total	$	23	100.0	%	$	25	100.0	%
Total
2005 and prior	$	280	33.9	%	$	301	35.2	%
2006		208	25.2	%		212	24.8	%
2007		330	39.9	%		333	39.0	%
2008		8	1.0	%		8	1.0	%
Total Modified Pool Risk in Force	$	826	100.0	%	$	854	100.0	%

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Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter and Nine Months Ended and as of September 30, 2009

ALT-A

Exhibit Q

($ in millions)	September 30
	2009				2008
	$		%		$		%
Primary risk in force by FICO score
>=740	$	1,121	24.6	%	$	1,256	24.5	%
680-739		2,202	48.2	%		2,452	47.8	%
660-679		666	14.6	%		755	14.7	%
620-659		543	11.9	%		628	12.3	%
<=619		30	0.7	%		34	0.7	%
Total	$	4,562	100.0	%	$	5,125	100.0	%
Primary risk in force by LTV
85.00% and below	$	1,195	26.2	%	$	1,308	25.5	%
85.01% to 90.00%		1,880	41.2	%		2,131	41.6	%
90.01% to 95.00%		1,175	25.8	%		1,330	26.0	%
95.01% and above		312	6.8	%		356	6.9	%
Total	$	4,562	100.0	%	$	5,125	100.0	%
Primary risk in force by policy year
2005 and prior	$	1,428	31.3	%	$	1,647	32.1	%
2006		1,010	22.1	%		1,141	22.3	%
2007		1,886	41.4	%		2,083	40.6	%
2008		237	5.2	%		254	5.0	%
2009		1	—			—	—
Total	$	4,562	100.0	%	$	5,125	100.0	%

Page 21

Radian Group Inc.

Financial Services Supplemental Information

For the Quarter and Nine Months Ended and as of September 30, 2009

Exhibit R

(In thousands)	Quarter Ended September 30						Nine Months Ended September 30
	2009			2008			2009			2008
Investment in Affiliates-Selected Information
Sherman
Balance, beginning of period	$	108,719		$	112,644		$	99,656		$	104,315
Net income for period		7,946			15,798			23,608			44,028
Dividends received		(4,599	)		(15,961	)		(11,040	)		(35,460	)
Other comprehensive (loss) income		(87	)		522			(245	)		120
Adjustment to investment related to buyback of MGIC interest		—			(25,786	)		—			(25,786	)
Balance, end of period	$	111,979		$	87,217		$	111,979		$	87,217
Portfolio Information:
Sherman
Total assets	$	1,951,458		$	2,433,666
Net revenues	$	299,592		$	368,112		$	968,075		$	1,158,454

Page 22

1601 Market Street Philadelphia, Pennsylvania 19103-2337 800 523.1988 215 564.6600

Forward-Looking Statements Some of the statements in this release constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995. Generally, words such as “may,” “will,” “should,” “could,” “would,” “anticipate,” “expect,” “intend,” “estimate,” “plan,” “project,” “continue,” “goal” and “believe,” or other variations on these and other similar expressions identify forward-looking statements. Forward-looking statements are only predictions and, as such, are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Forward-looking statements are based upon assumptions as to future events or our future financial performance that may not prove to be accurate. These statements speak only as of the date of this news release, and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Actual outcomes and results may differ materially from what is expressed or implied in these forward-looking statements. Factors that could cause actual results to differ from those projected in such forward-looking statements include, without limitation, the following:

•     changes in general financial and political conditions, such as the failure of the U.S. economy to recover robustly from the current recession or the U.S. economy reentering a recessionary period following a brief period of stabilization or even growth, a further reduction in the liquidity in the capital markets and further contraction of credit markets, a prolonged period of high unemployment rates and limited home price appreciation, changes or volatility in interest rates or consumer confidence, changes in credit spreads, changes in the way investors perceive the strength of private mortgage insurers or financial guaranty providers, investor concern over the credit quality and specific risks faced by the particular businesses, municipalities or pools of assets covered by our insurance; •     catastrophic events or further economic changes in geographic regions where our mortgage insurance or financial guaranty insurance in force is more concentrated; •     our ability to successfully execute upon our capital plan for our mortgage insurance business (which depends, in part, on the performance of our financial guaranty portfolio), and if necessary, to obtain additional capital to support new business writings in our mortgage insurance business and the long-term liquidity needs of our holding company (including significant payment obligations in 2010 and 2011); •     a further decrease in the volume of home mortgage originations due to reduced liquidity in the lending market, tighter underwriting standards and the ongoing deterioration in housing markets throughout the U.S.; •     our ability to maintain adequate risk-to-capital ratios and surplus requirements in our mortgage insurance business in light of ongoing losses in this business and continued deterioration in our financial guaranty portfolio which, in the absence of new capital, may depend on our ability to execute strategies for which regulatory and other approvals are required and may not be obtained; •     our ability to continue to effectively mitigate our mortgage insurance losses, which have positively impacted our provisions for losses; •     the negative impact our increased levels of insurance rescissions and claim denials may have on our relationships with customers; •     the concentration of our mortgage insurance business among a relatively small number of large customers; •     disruption in the servicing of mortgages covered by our insurance policies;

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1601 Market Street Philadelphia, Pennsylvania 19103-2337 800 523.1988 215 564.6600

•     the aging of our mortgage insurance portfolio and changes in severity or frequency of losses associated with certain of our products that are riskier than traditional mortgage insurance or financial guaranty insurance policies;

•     the performance of our insured portfolio of higher risk loans, such as Alternative-A (“Alt-A”) and subprime loans, and of adjustable rate products, such as adjustable rate mortgages and interest-only mortgages, which have resulted in increased losses and are expected to result in further losses; •     reduced opportunities for loss mitigation in markets where housing values do not appreciate or continue to decline; •     changes in persistency rates of our mortgage insurance policies; •     an increase in the risk profile of our existing mortgage insurance portfolio due to mortgage refinancing in the current housing market; •     further downgrades or threatened downgrades of, or other ratings actions with respect to, our credit ratings or the ratings assigned by the major rating agencies to any of our rated insurance subsidiaries at any time (in particular, the credit rating of Radian Group Inc. and the financial strength ratings assigned to Radian Guaranty Inc.); •     heightened competition for our mortgage insurance business from others such as the Federal Housing Administration and the Veterans’ Administration or other private mortgage insurers (in particular those that have been assigned higher ratings from the major rating agencies); •     changes in the charters or business practices of Federal National Mortgage Association (“Fannie Mae”) and Freddie Mac, the largest purchasers of mortgage loans that we insure, and our ability to remain an eligible provider to both Freddie Mac and Fannie Mae; •     the application of existing federal or state consumer, lending, insurance, securities and other applicable laws and regulations, or changes in these laws and regulations or the way they are interpreted; including, without limitation: (i) the outcome of existing investigations or the possibility of private lawsuits or other formal investigations by state insurance departments and state attorneys general alleging that services offered by the mortgage insurance industry, such as captive reinsurance, pool insurance and contract underwriting, are violative of the Real Estate Settlement Procedures Act and/or similar state regulations, (ii) legislative and regulatory changes affecting demand for private mortgage insurance, or (iii) legislation or regulatory changes limiting or restricting our use of (or requirements for) additional capital, the products we may offer, the form in which we may execute the credit protection we provide or the aggregate notional amount of any product we may offer for any one transaction or in the aggregate;

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1601 Market Street Philadelphia, Pennsylvania 19103-2337 800 523.1988 215 564.6600

•     the possibility that we may fail to estimate accurately the likelihood, magnitude and timing of losses in connection with establishing loss reserves for our mortgage insurance or financial guaranty businesses or premium deficiencies for our mortgage insurance businesses, or to estimate accurately the fair value amounts of derivative contracts in our mortgage insurance and financial guaranty businesses in determining gains and losses on these contracts; •     the ability of our primary insurance customers in our financial guaranty reinsurance business to provide appropriate surveillance and to mitigate losses adequately with respect to our assumed insurance portfolio; and the significant concentration of our financial guaranty reinsurance business in customers under common control; •     volatility in our earnings caused by changes in the fair value of our derivative instruments and our need to reevaluate the premium deficiency in our mortgage insurance business on a quarterly basis; •     changes in accounting guidance from the Securities and Exchange Commission or the Financial Accounting Standards Board; •     legal and other limitations on amounts we may receive from our subsidiaries as dividends or through our tax- and expense-sharing arrangements with our subsidiaries; and •     our investment in, and other arrangements with, Sherman Financial Group LLC, which could be negatively affected in the current credit environment if Sherman is unable to maintain sufficient sources of funding for its business activities or remain in compliance with its credit facilities.

For more information regarding these risks and uncertainties as well as certain additional risks that we face, you should review the risks described under Item 1A, “Risk Factors” under our Annual Report on Form 10-K for the year ended December 31, 2008, our Quarterly Report on Form 10-Q for the quarter ended June 30, 2009 and subsequent reports and registration statements filed from time to time with the Securities and Exchange Commission.

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