Radian Receives Approval of RMAI Subsidiary from Freddie Mac through 2013

  Radian Receives Approval of RMAI Subsidiary from Freddie Mac through 2013

        Company continues to write new MI business in Radian Guaranty

Business Wire

PHILADELPHIA -- December 21, 2012

Radian Guaranty Inc., the mortgage insurance subsidiary of Radian Group Inc.,
today announced that on December 20, 2012, Freddie Mac agreed to extend its
approval of Radian Mortgage Assurance Inc. (RMAI), a wholly owned subsidiary
of Radian Guaranty, as a limited eligible mortgage insurer for an additional
one-year period that will expire on December 31, 2013. As previously
disclosed, RMAI maintains a similar approval for the same time period from
Fannie Mae.

As of September 30, 2012, Radian Guaranty maintained a risk-to-capital ratio
of 20.1:1, which is below the 25:1 risk-to-capital limit imposed by certain
states. In the event Radian Guaranty is no longer in compliance with the
risk-based capital requirements of certain states, the company plans to write
new mortgage insurance business in those states through state-specific waivers
or similar relief, or by using RMAI. The amended approval from Freddie Mac
does not require any capital contributions from Radian Group to Radian
Guaranty or RMAI beyond those required under the original approval. Based on
the original approval, as previously announced, Radian Group contributed $100
million to Radian Guaranty in February 2012, and is required to contribute $50
million of additional capital to RMAI only in the event that Radian Guaranty
were to exceed the risk-based capital requirements of those states for which a
waiver or other relief has not been obtained. RMAI currently has $19 million
of existing capital.

“Our top priority at Radian is to continue writing new, high-quality mortgage
insurance business. This helps to improve the credit composition of our
mortgage insurance book and better position Radian for a return to operating
profitability next year,” stated Chief Executive Officer S.A. Ibrahim. “The
support of our stakeholders is critical to this effort and the extension of
Freddie Mac’s approval of RMAI is an illustration of that support.”

In addition to the states approved under the original agreement with Freddie
Mac, the amended approval also approves RMAI to write business in Idaho
provided that Radian Guaranty continues its efforts to obtain a waiver
approval or denial from Idaho state insurance regulators. Further, the amended
approval requires Radian Guaranty to diligently pursue an extension of
existing waivers beyond their current expiration dates, including those
waivers in California, Florida, Illinois and New Jersey that expire as of the
end of 2012. The company has submitted requests in each of these states for an
extension of the existing waivers. To the extent that any such extension is
not granted, Radian Guaranty is required to seek further modification of the
amended approval to allow the company to use RMAI in such states.

The amended approval with Freddie Mac includes an additional condition related
to the time-frame by which Radian Guaranty evaluates and internally resolves
claims. Specifically, the amended approval provides that: (1) within 120 days
of the amended approval, Radian Guaranty will pay to Freddie Mac or otherwise
resolve internally (e.g., through loss mitigation actions such as rescission
or denial) a majority of all claims outstanding greater than 90 days; and (2)
going forward, a majority of claims must be paid or otherwise resolved
internally (e.g., through loss mitigation actions such as rescission or
denial) within 90 days of the date the claims are perfected. The terms and
conditions of the amended approval may be found on the Form 8-K filed by
Radian Group Inc. with the SEC today and the original approval may be found as
Exhibit 10.66 to Radian Group Inc.’s Annual Report on Form 10-K for the year
ended December 31, 2011. As was the case with the original approval, Freddie
Mac, in its sole discretion, may modify the terms and conditions of the
amended approval or withdraw it.

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.

Forward-looking Statements

Some of the statements in this press release may constitute “forward-looking
statements” within the meaning of the United States Private Securities
Litigation Reform Act of 1995. These statements are based on our current
expectations, estimates and projections. Words such as "will," "expects,"
"believes" and similar expressions are used to identify these forward-looking
statements. These 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. Actual outcomes and results may differ
materially from what is expressed or forecast in these forward-looking
statements. As a result, these statements speak only as of the date they were
made, 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. For more information regarding these risks and
uncertainties as well as certain additional risks that we face, you should
refer to the Risk Factors detailed in Item 1A of Part I of our Annual Report
on Form 10-K for the year ended December 31, 2011, Item 1A of Part II of our
Quarterly Reports on Form 10-Q filed in 2012, and subsequent reports and
registration statements filed from time to time with the Securities and
Exchange Commission.

Contact:

Radian Group Inc.
Emily Riley, 215-231-1035
emily.riley@radian.biz
 
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