Note 17 - Subsequent Event

9 Months Ended

Sep. 30, 2011

Subsequent Events [Abstract]

Subsequent Events [Text Block]

Subsequent Event

According to the most recent trustee report for the CDO of ABS transaction described in Note 5 and Note 13, the CDO of ABS transaction experienced an approximate $36 thousand interest shortfall as of November 3, 2011. As a result of this interest shortfall, we currently expect to establish a statutory accounting reserve for this transaction in the fourth quarter of 2011. Because Radian Asset Assurance is a direct subsidiary of Radian Guaranty, any statutory reserve established by Radian Asset Assurance has a direct, negative impact on the statutory capital position and risk-to-capital ratio of Radian Guaranty.  Based on our estimates, we currently expect that establishing a statutory reserve for this CDO of ABS will negatively impact Radian Guaranty's statutory capital in the fourth quarter of 2011 in an amount between $88 million and $109 million. Had this event occurred in the third quarter of 2011 (assuming a statutory impact of $109 million), Radian Guaranty's risk-to-capital ratio would have remained below 25 to 1 at approximately 24.2 to 1 as of September 30, 2011. See Note 13 for a discussion of the risks and uncertainties related to Radian Guaranty's risk-to-capital position and the impact on Radian Group's liquidity. Under GAAP, this CDO of ABS is a VIE and therefore, we consolidate the assets and liabilities of this VIE and have elected to record them at fair value. Because the interest shortfall has not significantly altered our cash flow projections for this transaction, we do not expect that the interest shortfall will have a significant impact on Radian Group's GAAP fair value liability or stockholders' equity.