Investor Presentation

September 5, 2007

Exhibit 99.3

2

Forward Looking Statements –

Safe Harbor Provisions

All

statements

made

during

today’s

investor

call

or

included

in

the

accompanying

presentation

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,

which

include

projections

regarding

revenues

and

losses

as

well

as

other

statements

regarding

our

future

financial

condition,

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

housing

demand

or

mortgage

originations,

changes

in

housing

values,

population

trends

and

changes

in

household

formation

patterns,

changes

in

unemployment

rates,

changes

or

volatility

in

interest

rates,

consumer

confidence,

or

changes

in

credit

spreads;

changes

in

investor

perception

of

the

strength

of

private

mortgage

insurers

or

financial

guaranty

providers;

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

mortgage

insurance

and

financial

guaranty

insurance

policies;

material

changes

in

the

persistency

rates

of

our

mortgage

insurance

policies;

losses

associated

with

the

aging

of

our

mortgage

insurance

portfolio;

ratings

actions

with

respect

to

our

credit

ratings

or

the

insurance

financial-strength

ratings

assigned

by

the

major

ratings

agencies

to

our

operating

subsidiaries;

heightened

competition

from

other

insurance

providers

and

from

alternative

products

to

private

mortgage

insurance

and

financial

guaranty

insurance;

changes

in

the

charters

or

business

practices

of

Fannie

Mae

and

Freddie

Mac;

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

mortgage

insurance

or

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

mortgage

insurance

or

financial

guaranty

industries;

vulnerability

to

the

performance

of

our

strategic

investments

and

the

amount

of

the

impairment

charge

related

to

our

interest

in

Credit

Based

Asset

Servicing

and

Securitization

LLC

(“C-BASS”),

which

has

not

yet

been

determined

and

may

be

influenced

by:

(i)

changes

in

the

market

for

subprime

mortgages

and

the

amount,

timing

and

severity

of

market

dislocations

occurring

in

the

subprime

market;

(ii)

the

amount,

timing

and

severity

of

any

future

margin

calls

that

C-BASS

may

receive;

(iii)

C-BASS’s

ability

to

obtain

sufficient

and

timely

financing

to

support

its

liquidity

position;

and

(iv)

our

ability

to

sell

part

or

all

of

our

interest

in

C-BASS

and

the

amount

that

may

be

received

in

connection

with

any

such

sale;

legal

and

other

limitations

on

the

amount

of

dividends

that

we

may

receive

from

our

insurance

subsidiaries;

international

expansion

of

our

mortgage

insurance

and

financial

guaranty

businesses

into

new

markets

and

risks

associated

with

our

international

business

activities;

and

risks

and

uncertainties

associated

with

the

termination

of

our

merger

with

MGIC

Investment

Corporation,

including,

without

limitation:

possible

customer

attrition

and

disruption

from

the

transaction

making

it

more

difficult

to

maintain

relationships

with

customers,

employees

or

other

business

relationships,

which

may

have

a

materially

adverse

impact

on

our

financial

results

and

prospects.

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

our

annual

report

on

Form

10-K

for

the

year

ended

December

31,

2006.

We

caution

you

not

to

place

undue

reliance

on

these

forward-looking

statements,

which

are

current

only

as

of

the

date

of

this

presentation.

We

do

not

intend

to,

and

disclaim

any

duty

or

obligation

to,

update

or

revise

any

forward-looking

statements

made

during

today’s

investor

call

or

included

in

the

accompanying

presentation

to

reflect

new

information,

future

events

or

for

any

other

reason.

3

Agenda

1.

Introduction

S.A. Ibrahim, Chief Executive Officer

2.

Finance

Bob Quint, Executive Vice President

and Chief Financial Officer

3.

Mortgage Insurance

Mark Casale, President, Mortgage

Insurance

4.

Financial Guaranty

Steve Cooke, President, Financial

Guaranty

5.

Summary and Closing Remarks

S.A. Ibrahim, Chief Executive Officer

6.

Q&A

Introduction

5

•

Market developments have led us to mutually conclude that focusing on

managing our respective businesses has to be our most important priority

•

Management and employees remain fully committed to the business

–

Pre-deal executive team remains completely intact

–

Less than 5% of key employees covered under retention have left Radian

•

The strengths of our Mortgage Insurance business position us well to

capitalize on the current mortgage market trends

•

Our Financial Guaranty business will continue to provide stable results

•

Our primary near-term goals will be to preserve book value and stabilize

credit ratings

Situation Update

6

•

Based on Radian’s expected case financial projections

Projected Book Value per Share Development

(1)

Assumes an estimated NIMS mark-to-market credit loss of $270 million pre-tax; actual estimate and timing of mark-to-market and

actual claims are not yet determined. 

(1)

$51.53

$46.90

$49.87

$54.46

$59.96

$35

$45

$55

$65

6/30/2007

2007E

2008E

2009E

2010E

7

Mortgage Update and Outlook

•

Home price appreciation rate

has decelerated nationally

–

Prices now declining in certain

markets

•

Deteriorating credit

performance for mortgage

assets

–

Subprime delinquency rates

particularly affected

•

Reevaluation of rating agency

credit models

–

Contributes to asset pricing and

secondary market volatility

•

Reduced mortgage risk appetite

among both lenders and

investors

–

Liquidity and asset valuations

under pressure

•

Increasing volume of ARM

resets

Recent Developments

•

Portfolio lenders benefit from

secondary market disruption

–

Gain on sale model challenging

in current environment

•

Declining subprime and Alt A

origination volume

–

Liquidity and pricing have

constrained capacity

–

Pure subprime and Alt A lenders

disappearing from market

•

Tighter underwriting guidelines

–

Reduced “piggy-back”

and  

short-reset ARM volume

•

Growing importance of GSEs

–

Pricing advantage for agency-

eligible products

–

Potential expansion in role of

FHA

Mortgage Industry Reaction

•

Growing market share for top-

tier lenders

•

Delinquencies will remain high

due to reduced refinancing

flexibility for borrowers

•

Increased mortgage industry

share for Fannie Mae and

Freddie Mac

•

Strict underwriting standards

should improve credit

performance of late-2007 and

future vintages

Outlook

The ongoing mortgage market transition will create an attractive

environment for mortgage insurers

8

Mortgage Insurance –

Industry Overview

•

Strong fundamentals favoring the MI business as the market correction is

highlighting the value and benefit of MI

–

Increased penetration

–

Higher persistency

–

Tightened underwriting guidelines

–

Improved risk-adjusted pricing

•

GSEs still command a huge presence and influence on the industry

–

Emerging from a “dormant”

stage due to accounting and legislative pressures

–

More business is shifting towards the agencies

•

Increased concentration of origination volume among largest portfolio lenders

•

MI volume increasingly concentrated within traditional prime quality products

•

Strong long-term trends for home ownership

–

Favorable demographics

–

MI tax-deductibility helps first time buyers

9

What This Means for Radian

•

Our domestic Mortgage Insurance business is well positioned as large

lenders will benefit from market turmoil in the long-run

–

Radian’s emphasis has been on customized solutions used by larger lenders

–

Consolidation of mortgage industry has benefited Radian’s core customers

Recent market disruptions will continue to drive this trend

–

Large lenders and the GSEs have reaffirmed the value of Radian relationships by committing to

new business

•

Financial Guaranty and Sherman expected to provide diversification, and

stable and profitable results

•

Radian will continue to prudently write international Mortgage Insurance

and Financial Guaranty insurance in selected, proven markets

Finance

11

Finance –

Situation Update

•

Radian has been a public company since 1992 with a strong track record

of earnings, return on equity and book value growth

•

Credit and liquidity disruption during 2007 has caused a significant

increase in projected losses in the traditional MI portfolio

•

Radian has exposure to subprime mortgage assets separate from

traditional mortgage insurance risk

–

C-BASS: Subprime mortgage assets

–

NIMS: Guarantee of subprime mortgage securities

–

Second Liens

–

Financial Guaranty

•

Radian has always been aware of these non-traditional risks and

maintains adequate capital on both an economic and rating agency

basis

to support these risks

12

Finance –

Situation Update (continued)

•

As a result of these developments, between now and 2009 we expect:

–

Significant impairment to C-BASS investment to be recognized in the 3rd quarter of 2007

–

Approximately

$270

million

in

expected

incremental

credit

losses

(contained

in

mark-to-market)

in

NIMS

(claim

payments

expected

to

begin

in

2010)

–

Approximately $300 million in expected incremental losses in second lien book through year-

end 2010

–

Incurred loss ratio on primary / pool portfolio of 80%-90% in 2007 and 2008 and 60%-70% in

2009

–

Large short-term negative mark in FG book due to non-credit issues (primarily corporate spread

related only).  Although we do not currently anticipate losses associated with subprime

mortgage risk at FG, we continue to carefully monitor every deal

•

We expect book value to bottom in the 3

rd

quarter of 2007 after the        

C-BASS impairment and to increase steadily thereafter

13

•

Expected case performance delivers profitability and book value growth

through year-end 2010

Projected Book Value Development

* Assumes

full

impairment;

estimate

of

actual

impairment

not

yet

determined.

Note: All values in the above table are after-tax. 

Per Share

Total

(4.19)

(0.3B)

C-BASS *

$59.96

3.45

6.67

7.11

$51.53

$4.8B

0.3B

0.5B

0.6B

(0.2B)

(0.2B)

$4.1B

(2.43)

(2.18)

Financial Services

Traditional Mortgage Insurance

Core Business Performance:

Financial Guaranty

12/31/2010 Book Value

Seconds

NIMS

6/30/2007 Book Value

14

Capital Position and Initiatives

•

Strong capital / liquidity position

–

Radian has no current liquidity risk; claims will be paid over time

–

Investment portfolio of $6.0 billion at 6/30/07 consisting primarily of highly-rated liquid

investments

–

Core businesses have adequate capital to support risk

–

No current plans to pay cash dividends from any operating insurance subsidiary

–

Radian Group’s modest dividend conserves capital and liquidity

•

Capital enhancement opportunities

–

Potential

sale

of

a

portion

of

Sherman

interest

–

proceeds

to

support

mortgage

insurance

capital

–

Additional $200 million credit line available

15

C-BASS

Sherman

•

Sale remains a possibility

•

Full impairment possible, but not a

certainty

•

Litton servicing platform intact and

clearly valuable

•

Strong cash flow with manageable

leverage

•

Continued strong earnings contribution

from Sherman expected in 2007 and

beyond

•

Potential sale of partial ownership

interest by end of September

•

Proceeds will be used to supplement

MI capital

Update on C-BASS and Sherman

Mortgage Insurance

17

Primary MI Bulk

13%

Primary MI

Flow

71%

Pool

10%

NIMs / CDS

3%

Seconds

3%

Radian’s Mortgage Insurance Segment Overview

•

Radian’s business consists primarily

of traditional MI

•

Traditional MI consists of contracts

which protect the mortgage holders

from losses on a portion of the value

of a mortgage

–

Increases liquidity of a loan

–

Essential for high LTV underwriting

•

Traditional MI is where majority of

mortgage originations will occur in the

near-term

–

Less subprime

–

More Fannie / Freddie

–

Fewer or no “piggy-back”

structures

Represents domestic risk in force only; financial data as of July 31, 2007.

Losses for both products will be

substantially realized by year-end 2009

Risk in Force

Net Interest Margin Securities

(NIMS)

19

•

Outstanding insurance protection of $796 million as of 6/30/07

•

NIMS risk in force continues to decline

-

RIF

for

NIMS

has

decreased

by

$54

million

to

$742

million

during

July

and

August

Reflects the normal pay-down of the insured securities

Two bonds paid off

-

Average remaining term to expiration of existing NIMS is approximately 2 years

•

Radian has provided insurance protection on approximately $3 billion of

NIMS issued since 2001

-

To date, Radian has not paid out any claims and has earned over $240 million in premiums

•

Radian has discontinued writing new business

Net Interest Margin Securities (NIMS)

20

NIMS Loss Estimation Methodology

•

NIMS are bonds whose source of repayment is the excess cash flows coming from other securitizations

-

Roughly equal to interest income less interest expense less credit losses

-

Higher losses and faster pre-payment of mortgages in the underlying securitizations decrease a NIM bond’s

value by lowering overall cash flows used to pay interest and principal on the bond

•

A

NIMS

wrap

is

a

financial

guarantee

on

a

NIM

bond

for

payment

of

principal

and

interest

–

typically

having

a

5

year

legal

maturity

-

Claims are paid at maturity when the final amount of any cash shortfall owed to bond holders is known

-

Accordingly, NIMS cash losses (i.e., paid claims) do not develop

like traditional mortgage insurance

-

Majority of claims are not expected to be paid until 2010 and beyond

•

Using market based roll rates and

internally developed loss

assumptions, Radian estimates

the losses in the underlying

securitizations

•

Projected pre-payment speeds of

the underlying collateral in each

securitization incorporate actual

historical pre-payment experience

•

The estimated loss and

prepayment speeds are used to

estimate the cash flows for each

securitization, and thus for each

NIM bond

•

Cash flows are aggregated to arrive

at estimated future principal

outstanding on each NIM bond at

legal maturity

•

A zero balance implies the cash flows

were sufficient to pay the bond off

•

Any positive balance is paid by

Radian, along with any missed

interest payments

Estimate Losses and Prepayments

Estimate Cash Flows

Estimate Bond P&I

Valuation is more similar to mark to market estimation than a report on current losses

21

Estimated NIMS Economic Loss Development

NIMS –

Loss and Paydown schedule

($ in millions)

To Date, as of

Total Post-

Q2 2007

Q2 2007

Total

Premium Income

$240

$86

$326

Write-Downs

(70)

(270)

(340)

170

(184)

(14)

Risk in Force

795

0

0

Claims Paid

$0

($340)

($340)

Second Lien Portfolio

23

Second Lien Business –

Risk in Force

Summary Risk in Force as of 6/30/07

Transaction B

$77

7%

Remaining

Portfolio

$500

46%

Transaction A

$508

47%

24

Second Lien Business –

Expected Future Losses

•

Total Projected Claims through 2010 (in millions)

Transaction A

Transaction B

(1)  Radian’s portion of loss is contained in both first and second loss policies, but is essentially 50% of total projected losses.

(2)  Radian’s risk band is approximately 4.8% of Original Principal Balance.

$301

Total

40

Remaining Portfolio

77

Transaction B

$184

Transaction A

($ in millions)

($ in millions)

Radian Risk in Force

$77

Original Principal Balance

1,577

Projected Cumulative Loss

315

Radian Portion of Loss

(2)

77

Losses to Date

-

Remaining Losses

$77

Radian Risk in Force

$508

Original Principal Balance

1,573

Projected Cumulative Loss

508

Radian Portion of Loss

(1)

254

Losses to Date

70

Remaining Losses

$184

25

Estimated Seconds Economic Loss Development

Second Lien Risk –

Loss and Paydown schedule

($ in millions)

Q3 - Q4

Total

2007

2008

2009

2010

Q3 2007 - 2010

Initial RIF

$1,063

$911

$581

$379

$1,063

Paydown

(100)

(230)

(112)

(220)

(662)

Claims Paid

(52)

(100)

(90)

(59)

(301)

Ending RIF

$911

$581

$379

$100

$100

Traditional Business

27

Risk in Force –

FICO Breakdown

2005 Vintage Risk in Force

2007

Vintage

Risk

in

Force

(1)

•

Beginning in 2006, Radian focused on writing higher FICO business

2005 Vintage RIF:  $5.6 billion

2007 Vintage RIF:  $6.1 billion

(1) 2007 vintage as of July 31, 2007.

<570

3%

660+

67%

620-659

21%

570-619

9%

570-619

6%

620-659

18%

660+

75%

<570

1%

28

Primary MI Portfolio Compared with the MI Industry

Note: IIF and RIF are sourced from MICA.  Industry average statistics are an average of Genworth, MGIC and PMI, as publicly available.

(As of June 30, 2007)

Attribute

Radian

Industry

Primary IIF

$128B

$730B

Primary RIF

$27B

$162B

FL Primary RIF (%)

9%

10%

CA Primary RIF (%)

8%

6%

TX Primary RIF (%)

6%

7%

620+ FICO - % of Primary RIF

91%

90%

Alt-A - % of Primary RIF

19%

16%

Interest Only - % of Primary RIF

9%

10%

> 95 LTV

20%

25%

ARMs < 5 years

16%

15%

29

Primary MI Book Current Expected Loss Parameters

(1) Cumulative Loss Rate on Balance is equal to the product of Cumulative Claim Rate on Balance and Cumulative Severity on Balance.

(2) Total Loss on Balance is equal to the product of Cumulative Loss Rate on Balance and IIF.

(3)  Losses will be recognized over the life of the insured loans.

($ in millions)

Expected Performance on Current Balance

Vintage

IIF

RIF

% of RIF

% ARM

Cumulative

Claim Rate on

Balance

Cumulative

Severity on

Balance

Cumulative

Loss Rate on

Balance

(1)

Total Loss on

Balance

(2) (3)

Total / Average

$73,647

$18,085

66.3%

10%

4.9%

26.6%

1.3%

$960

<=2003

19,915

4,656

17.1%

6%

2.8%

27.1%

0.8%

2004

10,570

2,622

9.6%

17%

3.6%

25.6%

0.9%

2005

13,842

3,462

12.7%

15%

5.0%

26.1%

1.3%

2006

16,414

4,173

15.3%

8%

7.4%

24.6%

1.8%

2007

12,906

3,173

11.6%

6%

7.5%

23.0%

1.7%

Total / Average

$41,315

$5,753

21.1%

18%

8.1%

17.2%

1.4%

$580

<=2003

4,477

1,092

4.0%

6%

3.1%

26.1%

0.8%

2004

2,395

616

2.3%

27%

8.4%

26.6%

2.2%

2005

6,400

845

3.1%

51%

9.3%

14.1%

1.3%

2006

13,156

1,530

5.6%

15%

9.9%

16.7%

1.7%

2007

14,886

1,669

6.1%

9%

8.7%

14.7%

1.3%

Total / Average

$13,305

$3,443

12.6%

60%

18.2%

25.8%

4.7%

$623

<=2003

1,870

477

1.7%

50%

9.1%

24.8%

2.3%

2004

2,061

591

2.2%

52%

18.8%

26.0%

4.9%

2005

5,434

1,383

5.1%

69%

20.5%

24.4%

5.0%

2006

2,911

774

2.8%

61%

21.7%

25.6%

5.6%

2007

1,029

219

0.8%

39%

20.5%

20.5%

4.2%

Grand Total / Average

$128,266

$27,281

100.0%

18%

7.3%

24.1%

1.8%

$2,163

MI Business Outlook

31

•

Capitalize on established relationships with top mortgage lenders

•

Continue to leverage creative structuring capabilities, but channel towards more

traditional products (primary / pool)

•

Selectively target middle market lenders using customized solutions

Mortgage Insurance Go-Forward Strategy

Manage Risk

and

Efficiency

Franchise

•

Target mortgage credit risk with a low volatility risk profile

•

Focus business on prime and high quality Alt-A which has proven performance over

last 10 years

•

Stopped

writing

non-traditional

MI

business

–

2nd

liens,

Credit

Default

Swaps

and

financial guaranty products (NIMS)

•

Improve operational efficiency

•

Lender-focused, consultative approach to customers represents significant competitive

advantage in rapidly evolving marketplace

•

Leverage mortgage banking talent brought into company to reinforce relationships and

further improve customer service / technology

–

These areas will increasingly become differentiating factors

•

Culture of new product innovations (first to create captives, LPMI, SMART Home, etc.)

•

Increase investment in sales organization

Build Upon

Core

Strengths

32

Radian’s Customers Will Benefit from Market Turmoil Long-Term

•

Radian’s emphasis has been on

customized solutions used by larger

well capitalized lenders

•

Consolidation of mortgage industry

into fewer hands has benefited

Radian’s core customers

•

Flow NIW at 8/31/07 is at $26 billion,

a 56% increase over the comparable

period last year

•

Large lenders have reaffirmed value

of Radian relationships by committing

to new business during the 3

rd

quarter

($ in billions)

Flow

NIW ($)

Radian

Market Share

% of

Radian NIW

Top 10 Lenders

$12.8

17%

50%

Top 11 - 50 Lenders

6.9

14%

27%

Top 51 - 100 Lenders

2.0

13%

8%

Top 101 - 250 Lenders

1.5

9%

6%

All Other Lenders (250+)

2.3

8%

9%

Total

$25.6

14%

100%

Radian New Insurance Written -

2005

33

Strong Trends in Traditional MI

$6.0

$12.9

$12.7

$10.9

$12.8

$11.5

$8.2

$7.6

$13.2

$16.9

$0.0

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

$14.0

$16.0

$18.0

($ in billions)

Primary New Insurance Written

Persistency

58.4%

56.9%

57.1%

58.2%

58.6%

62.8%

65.7%

67.3%

69.5%

71.1%

40.0%

45.0%

50.0%

55.0%

60.0%

65.0%

70.0%

75.0%

(12 months ended)

Financial Guaranty

35

•

Operates three product lines –

Global Structured Products, US Public

Finance and Reinsurance

•

Established track record serving distinct mix of clients

•

Focus on insuring obligations that are investment grade

Global Structured

Products

Provider of credit enhancement

in CDS or FG form to leading

financial institutions

•

$47 billion corporate CDO

exposure; more than 99% at

AAA or Super-AAA attachment

•

Heavily focused on synthetic

high grade corporate portfolios

•

Minimal RMBS exposure

US Public Finance

Niche insurer of primarily

investment grade credits in

underserved sectors

•

Over 2,000 deals insured

since 1990

•

Diversified insured portfolio

with minimal credit losses

•

Steady earnings stream from

seasoned book

Reinsurance

Leading provider of reinsurance

capacity to AAA insurers

•

Strong insured portfolio; 85%

rated A or better

•

Strategy of providing

Facultative capacity to take

advantage of underwriting

resources (40% of reinsurance

book)

•

Steady earnings stream and

provides portfolio diversification

Financial Guaranty

36

Financial Strength and Liquidity

•

Qualified Statutory Capital of $1.4 billion

•

Claims Paying Resources of $2.8 billion

•

Unearned Premium Reserve of $844.6 million and $364.5 million of

future

installments provides substantial earnings stream

•

Financial Guaranty does not enter into Credit Support Annexes (“CSA”) in

connection with the execution of its credit default swaps and does not

post collateral for any of its transactions

•

Financial Guaranty’s obligation is generally to make timely payments of

scheduled principal and interest in the event of a claim

•

$100 million of additional capital anticipated to be contributed

by Radian

Group

Note:  Data as of June 30, 2007.

37

Highly Rated, Diversified Insured Portfolio

•

$110.5 billion Net Par Outstanding as of June 30, 2007

•

Public finance exposure accounts for over 50% of the portfolio

•

Diversified book of over 7,000 credits; more than 40% derived from

reinsurance with the AAA insurers

•

44% of Radian’s insured portfolio is rated AAA, placing it among the

highest AAA % in the industry, and well above the industry average of 25% 

•

Corporate CDOs make up 42% of total book; more than 99% attach at AAA

or Super-Senior levels, with more than 84% having attachments of at least

2x the AAA attachment point as determined by S&P

–

Requires mark-to-market even though these assets are held to maturity and function like an

insurance policy

Credit exposure is extremely remote and provided no claims are paid, the mark-to-market

losses

resulting

from

widening

credit

spreads

will

reverse

to

$0

at

the

CDOs

maturity

38

•

US RMBS exposure totals $960.4 million (0.9% of par)

–

Lowest

par

amount

in

industry

and

well

below

industry

average

of

$18.8

billion

–

Lowest percent in industry and well below industry average of 6.7%

–

Source: Operating Supplements of each insurer

•

US RMBS Subprime

exposure totals $560.7 million (0.5% of par)

–

Par amount 2

nd

lowest in industry and well below industry average of $4.1 billion

–

Percent of Net Par 2

nd

lowest in industry and well below industry average of 1.68%

–

Source: S&P Subprime Exposure report (June 26, 2007)

•

2006 and 2007 vintages represent 20% and 13%, respectively, of total

subprime exposure.  All of these deals still maintain investment-grade

ratings, 63% of which are rated between A and AAA

•

Financial Guaranty also has limited subprime RMBS exposure in three

direct-insured CDOs of asset-backed securities with a total par outstanding

of $765 million, 0.7% of total par

•

The overall ratings distribution of these CDOs is AAA (87%) and BBB (13%)

Note: More information on our subprime exposure can be found at http://www.radian.biz/structured/index.aspx

Financial Guaranty –

US RMBS Exposure as of 6/30/07

39

•

Bolster market confidence by highlighting financial strength, portfolio quality

and franchise value

•

Maximize growth areas / opportunities in new markets

–

Expand new products (e.g., soft capital solutions and project finance)

–

Expand client base (e.g., from bulge bracket to regional and Yankee banks)

–

Expand sale point within existing clients (e.g., going beyond trading desks to portfolio management

units)

–

Market directly to issuers and other asset managers

•

Execute on strategy for managed international growth

–

Expanding on the PFI, PPP, and Project Finance markets by partnering with banks and helping

them compete against capital market executions

Financial Guaranty Go-Forward Strategy

Conclusion

41

•

Market developments have led us to mutually conclude that focusing on

managing our respective businesses has to be our most important priority

•

Management and employees remain fully committed to the business

–

Pre-deal executive team remains completely intact

–

Less than 5% of key employees covered under retention have left Radian

•

The strengths of our Mortgage Insurance business position us well to

capitalize on the current mortgage market trends

•

Our Financial Guaranty business will continue to provide stable results

•

Our primary near-term goals will be to preserve book value and stabilize

credit ratings

Summary

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