8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): December 11, 2008

Radian Group Inc.

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation)

1-11356	23-2691170
(Commission File Number)	(IRS Employer Identification No.)

1601 Market Street, Philadelphia, Pennsylvania	19103
(Address of principal executive offices)	(Zip Code)

(215) 231 - 1000

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On December 11, 2008, we posted to our website a quarterly operating supplement for the third quarter of 2008, providing financial and other statistical information for our financial guaranty business. The quarterly operating supplement is furnished as Exhibit 99.1 to this report.

The information included in, or furnished with, this report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

99.1* Radian Asset Assurance Inc. – Quarterly Operating Supplement, Third Quarter 2008.

* Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	RADIAN GROUP INC.
Date: December 11, 2008	By:	/s/ Catherine M. Jackson
		Catherine M. Jackson
		Senior Vice President, Controller

EXHIBIT INDEX

Exhibit No.	Description
99.1*	Radian Asset Assurance Inc. – Quarterly Operating Supplement, Third Quarter 2008.

* Furnished herewith.

EX-99.1

Exhibit 99.1

Quarterly

Operating Supplement

Third Quarter 2008

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 Future Revenue	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	20

1  Quarterly Operating Supplement for the Period Ended Sept. 30, 2008 / Table of Contents

Radian Asset Assurance Inc.

Quarterly Operating Supplement

September 30, 2008

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 BBB+ (Negative Outlook) by Standard & Poor’s, a division of The McGraw-Hill Companies (S&P) and A3 (Under Review for Possible Downgrade) 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. Radian has traditionally written financial guaranty insurance for municipal bonds, asset-backed securities and structured transactions. Radian has also traditionally provided reinsurance to the monoline financial guarantors. In addition, Radian provided Trade Credit reinsurance until 2005, when this line of business was placed in runoff.

In June 2008, the financial strength ratings of Radian were downgraded by both S&P and Moody’s. These downgrades, combined with the difficult market conditions for financial guaranty insurance, have severely limited Radian’s ability to write new direct insurance and reinsurance both domestically and internationally. As a result, new business production across all our product lines has been significantly reduced in the nine months of 2008 and is likely to remain minimal for the foreseeable future, if not permanently. In light of these conditions, Radian has discontinued, for the foreseeable future, writing any new financial guaranty insurance other than as may be necessary to commute, restructure, hedge or otherwise mitigate losses or reduce exposure in our existing portfolio. Although Radian cannot be certain of the extent and duration of any continued deterioration, disruptions or uncertainty in credit markets or other sectors of the economy in which Radian’s financial guaranty business participates, Radian believes these conditions are likely to persist for the foreseeable future. In the third quarter of 2008, Radian initiated plans to reduce its financial guaranty operations, including reducing its workforce commensurate with our current intention not to originate new business.

Radian is a direct subsidiary of Radian Guaranty Inc., a Pennsylvania mortgage insurer, and an indirect 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.)	1 212 984.9222
1 212 983.3100	john.deluca@radian.biz
www.radian.biz

2 Quarterly Operating Supplement for the Period Ended Sept. 30, 2008 / Introductory Note / Company Profile / Company Information

Radian Asset Assurance Inc.

Consolidated GAAP Income Statements* ($ Thousands)

(Unaudited)

	Quarter ended						Nine Months ended
	September 30 2008			September 30 2007			September 30 2008			September 30 2007
Revenues
Net premiums written - insurance	$	13,843		$	59,068		$	70,427		$	144,462
Net premiums earned - insurance	$	53,382		$	32,678		$	134,688		$	98,200
Net investment income		26,152			26,456			78,443			76,813
(Loss) gain on investments		(26,898	)		5,473			(63,758	)		13,873
Realized gain on derivatives		8,660			17,479			27,538			79,577
Unrealized gains (losses) on derivatives		147,490			(259,391	)		795,705			(294,246	)
Total change in fair value of derivative instruments		156,150			(241,912	)		823,243			(214,669	)
Total revenues		208,786			(177,305	)		972,616			(25,783	)
Expenses
Losses and loss adjustment expenses		25,719			52,133			48,141			48,174
Policy acquisition costs		15,421			10,923			38,092			34,002
Other operating expenses		36,902			9,933			72,510			36,799
Other expense		6,847			3,833			17,721			12,226
Total expenses		84,889			76,822			176,464			131,201
Income (loss) before income taxes		123,897			(254,127	)		796,152			(156,984	)
Income tax expense (benefit)		53,006			(101,709	)		275,340			(75,598	)
Net Income (loss)	$	70,891		$	(152,418	)	$	520,812		$	(81,386	)

^* See Consolidated Explanatory Notes on page 18.

3  Quarterly Operating Supplement for the Period Ended Sept. 30, 2008 / Consolidated GAAP Income Statements

Radian Asset Assurance Inc.

Consolidated GAAP Balance Sheets* ($ Thousands)**

(Unaudited)

	September 30 2008			December 31 2007
Assets
Investments:
Fixed maturities, available for sale, at fair value (amortized cost $2,014,068 and $2,066,052)	$	1,926,754		$	2,092,720
Fixed maturities - trading, at fair value (amortized cost $39,141 and $16,125)		39,027			16,132
Hybrid securities, at fair value (amortized cost $143,627 and $140,325)		128,641			155,844
Preferred stock, at fair value (cost $21,956 and $0)		18,056			—
Common stock, at fair value (cost $931 and $931)		1,049			1,143
Short-term investments		124,772			253,614
Total Investments		2,238,299			2,519,453
Cash and cash equivalents		10,768			6,012
Deferred federal income taxes - net		—			233,996
Accrued interest and dividends receivable		27,898			28,319
Premiums and other receivables		15,027			21,582
Deferred policy acquisition costs		160,492			172,560
Prepaid reinsurance premiums		962			1,138
Prepaid federal income taxes		—			14,995
Derivative assets		163,433			43,145
Other assets		9,146			13,428
Total Assets	$	2,626,025		$	3,054,628
Liabilities and Shareholder’s Equity
Liabilities
Losses and loss adjustment expenses	$	182,567		$	249,864
Reinsurance payable on paid losses and loss adjustment expenses		1,837			1,410
Deferred premium revenue		649,289			713,726
Federal income taxes payable		37,878			4,348
Deferred federal income taxes - net		15,155			—
Payable to affiliates		10,055			6,298
Derivative liabilities		122,933			801,284
Accrued expenses and other liabilities		16,857			24,721
Total Liabilities		1,036,571			1,801,651
Shareholder’s Equity
Common stock — $150 par value
Authorized, issued and outstanding — 100,000 shares		15,000			15,000
Additional paid-in capital		703,848			704,500
Retained earnings		917,653			504,341
Accumulated other comprehensive (loss) income		(47,047	)		29,136
Total Shareholder’s Equity		1,589,454			1,252,977
Total Liabilities and Shareholder’s Equity	$	2,626,025		$	3,054,628

* See Consolidated Explanatory Notes on page 18.

** Except share amounts.

4  Quarterly Operating Supplement for the Period Ended Sept. 30, 2008 / Consolidated GAAP Balance Sheets

Radian Asset Assurance Inc.

Consolidated Gross Premiums Written by Product* ($ Thousands)

	Quarter ended							Nine months ended
	September 30 2008			September 30 2007		Percent Change		September 30 2008			September 30 2007		Percent Change
Public Finance Direct	$	2,059		$	17,748	-88.4	%	$	15,538		$	48,656	-68.1	%
Structured Finance Direct		3,358			3,812	-11.9	%		10,546			12,075	-12.7	%
Public Finance Reinsurance		6,046			31,432	-80.8	%		30,808			67,082	-54.1	%
Structured Finance Reinsurance		2,748			5,001	-45.1	%		13,601			16,606	-18.1	%
Trade Credit Reinsurance		(371	)		837	-144.3	%		(84	)		1,507	-105.6	%
Total	$	13,840		$	58,830	-76.5	%	$	70,409		$	145,926	-51.8	%

Consolidated Net Premiums Earned by Product* ($ Thousands)

	Quarter ended							Nine months ended
	September 30 2008			September 30 2007		Percent Change		September 30 2008			September 30 2007		Percent Change
Public Finance Direct	$	13,380		$	10,765	24.3	%	$	43,194		$	32,311	33.7	%
Structured Finance Direct		3,569			4,426	-19.4	%		11,211			13,506	-17.0	%
Public Finance Reinsurance		32,311			11,105	191.0	%		65,146			33,897	92.2	%
Structured Finance Reinsurance		4,472			5,560	-19.6	%		15,163			17,496	-13.3	%
Trade Credit Reinsurance		(350	)		822	-142.6	%		(26	)		990	-102.6	%
Total	$	53,382		$	32,678	63.4	%	$	134,688		$	98,200	37.2	%

Consolidated Future Revenue**

As of September 30, 2008

($ Millions)

	Net Deferred Premium Amortization		Future Installments		Insurance Premium Earnings		Realized Gains on Credit Derivatives		Total Future Revenue
2008	$	19.9	$	3.8	$	23.7	$	13.5	$	37.2
2009		58.1		30.3		88.4		49.1		137.5
2010		50.3		23.8		74.1		43.2		117.3
2011		46.9		17.5		64.4		40.3		104.7
2012		44.1		16.7		60.8		37.0		97.8
2008 – 2012		219.3		92.1		311.4		183.1		494.5
2013 – 2017		180.9		65.0		245.9		72.7		318.6
2018 – 2022		124.3		41.0		165.3		4.5		169.8
2023 – 2027		76.4		31.4		107.8		3.9		111.7
After 2027		47.4		55.7		103.1		5.5		108.6
Total	$	648.3	$	285.2	$	933.5	$	269.7	$	1,203.2

* See Consolidated Explanatory Notes on page 18.

** This table depicts the expected revenue from insurance premiums, net of prepaid reinsurance premiums, and realized gains on credit derivatives, for the existing financial guaranty contracts, assuming no advance refundings as of September 30, 2008. Expected revenue will differ from contractual revenue because borrowers have the right to call or repay financial guaranty obligations. Realized gains on credit derivatives are our expected future premium earnings on derivative contracts.

5  Quarterly Operating Supplement for the Period Ended Sept. 30, 2008 / 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						Nine months ended
	September 30 2008			September 30 2007			September 30 2008			September 30 2007
Claims Paid
Trade Credit	$	402		$	1,853		$	1,484		$	6,445
Financial Guaranty		3,723			1,030			106,876			1,032
Conseco Finance Corp		2,218			2,663			6,591			8,782
Total	$	6,343		$	5,546		$	114,951		$	16,259
Incurred Losses and Loss Adjustment Expenses
Trade Credit	$	(1,763	)	$	(1,514	)	$	(6,101	)	$	(5,087	)
Financial Guaranty		27,482			53,647			54,914			53,261
Conseco Finance Corp		—			—			(672	)		—
Total	$	25,719		$	52,133		$	48,141		$	48,174

Components of Losses and

Loss Adjustment Expense Reserves

	September 30 2008		December 31 2007
Financial Guaranty
Case	$	48,589	$	31,685
Allocated non-specific		71,610		141,270
Unallocated non-specific		42,871		49,195
		163,070		222,150
Trade Credit and Other
Case		12,113		14,800
IBNR		7,384		12,914
		19,497		27,714
Total	$	182,567	$	249,864

* See Consolidated Explanatory Notes on page 18.

6  Quarterly Operating Supplement for the Period Ended Sept. 30, 2008 / Consolidated Selected Loss Information

Radian Asset Assurance Inc.

Consolidated Selected Derivative Information*

($ Millions)

Balance Sheet Information

	September 30 2008			December 31 2007
Notional value - insured portfolio	$	48,561.1		$	48,539.4
Assets
Gross unrealized gains on derivative financial guaranty contracts	$	66.4		$	7.9
Gross unrealized gains on put options on committed preferred securities		97.0			35.2
Total assets		163.4			43.1
Liabilities
Gross unrealized losses on derivative financial guaranty contracts		(122.9	)		(801.2	)
Net assets (liabilities)	$	40.5		$	(758.1	)

Income Statement Information

	Quarter ended						Nine months ended
	September 30 2008			September 30 2007			September 30 2008			September 30 2007
Realized gains and (losses) on derivatives
Premiums earned on credit derivatives	$	13.7		$	13.9		$	40.9		$	48.6
Net payments on credit derivatives		(3.8	)		—			(10.1	)		—
Premium settlements on terminated credit derivatives		—			3.6			0.8			31.0
Payment to maintain put options on committed preferred securities		(1.3	)		—			(4.1	)		—
Total realized		8.6			17.5			27.5			79.6
Unrealized gains (losses) on derivatives
Change in fair value of credit derivatives		160.6			(259.1	)		734.0			(293.9	)
Change in fair value of put options on committed preferred securities		(13.1	)		—			61.7			—
Change in fair value of investments		—			(0.3	)		—			(0.4	)
Total unrealized		147.5			(259.4	)		795.7			(294.3	)
Change in fair value of derivative instruments	$	156.1		$	(241.9	)	$	823.2		$	(214.7	)

Roll Forward of Net Derivative Assets and Liabilities

	September 30 2008			December 31 2007
Balance at January 1	$	(758.1	)	$	59.6
Realized gains on derivatives		27.5			90.2
Unrealized gains on derivatives		795.7			(836.7	)
Premiums written on credit derivatives		(38.0	)		(43.0	)
Payment to maintain put options on committed preferred securities		4.1			3.0
Net payments on credit derivatives		10.1			—
Premium settlements on terminated credit derivatives		(0.8	)		(31.2	)
Balance at end of period	$	40.5		$	(758.1	)

* See Consolidated Explanatory Notes on page 18.

7  Quarterly Operating Supplement for the Period Ended Sept. 30, 2008 / Consolidated Selected Derivative Information

Radian Asset Assurance Inc.

Consolidated Investment Portfolio Highlights*

($ Millions)

Asset Quality**	Book Value (09/30/2008)		Percent of Book Value		Book Value (12/31/2007)		Percent of Book Value
AAA	$	1,153.3	51.6	%	$	1,698.4	67.5	%
AA		657.5	29.4	%		418.9	16.6	%
A		251.4	11.2	%		220.8	8.8	%
BBB		168.1	7.5	%		174.1	6.9	%
BIG		1.7	0.1	%		—	0.0	%
NR		5.3	0.2	%		6.1	0.2	%
Other		1.0	0.0	%		1.2	0.0	%
Total	$	2,238.3	100.0	%	$	2,519.5	100.0	%
Asset Class	Book Value (09/30/2008)		Percent of Book Value		Book Value (12/31/2007)		Percent of Book Value
Municipal Bonds	$	1,589.5	71.0	%	$	1,747.6	69.4	%
Taxable Bonds		376.3	16.8	%		361.3	14.3	%
Convertible Bonds		114.1	5.1	%		125.8	5.0	%
Short-Term		124.8	5.6	%		253.6	10.1	%
Other		33.6	1.5	%		31.2	1.2	%
Total	$	2,238.3	100.0	%	$	2,519.5	100.0	%

* See Consolidated Explanatory Notes on page 18.

** Average duration of 6.5 years and 5.8 years at 09/30/2008 and 12/31/2007, respectively.

8  Quarterly Operating Supplement for the Period Ended Sept. 30, 2008 / Consolidated Investment Portfolio Highlights

Radian Asset Assurance Inc.

Consolidated Insured Portfolio Highlights* ($ Millions)

Consolidated Gross Par Originated

	Nine months ended
	September 30, 2008						September 30, 2007
	Direct		Assumed**		Total		Direct		Assumed**		Total
Public Finance	$	1,419	$	2,084	$	3,503	$	2,788	$	6,831	$	9,619
Structured Finance		231		405		636		13,064		1,080		14,144
Total	$	1,650	$	2,489	$	4,139	$	15,852	$	7,911	$	23,763

Sector Breakout

	Net Par Outstanding (09/30/2008)		Percent of total Net Par		Net Par Outstanding (12/31/2007)		Percent of total Net Par
Public Finance
General Obligations	$	19,738	17.8	%	$	19,780	17.0	%
Healthcare		9,168	8.3	%		10,849	9.4	%
Transportation		6,941	6.2	%		6,938	6.0	%
Utilities		6,229	5.6	%		6,555	5.7	%
Tax Backed		5,402	4.9	%		5,851	5.0	%
Investor-Owned Utilities		3,845	3.4	%		3,889	3.4	%
Education		3,717	3.3	%		4,237	3.7	%
Long Term Care		1,447	1.3	%		1,548	1.3	%
Housing		539	0.5	%		621	0.5	%
Other Public Finance		1,739	1.6	%		1,784	1.5	%
Subtotal Public Finance	$	58,765	52.9	%	$	62,052	53.5	%
Structured Finance
Collateralized Debt Obligations	$	45,930	41.4	%	$	46,961	40.4	%
Asset Backed – Mortgage and MBS		1,413	1.3	%		1,579	1.4	%
Asset Backed – Consumer		1,253	1.1	%		1,415	1.2	%
Asset Backed – Commercial and Other		1,196	1.1	%		1,359	1.2	%
Other Structured Finance		2,471	2.2	%		2,656	2.3	%
Subtotal Structured Finance		52,263	47.1	%		53,970	46.5	%
Total	$	111,028	100.0	%	$	116,022	100.0	%

* See Consolidated Explanatory Notes on page 18.

** Current in 2008; reflects one quarter lag in 2007.

9  Quarterly Operating Supplement for the Period Ended Sept. 30, 2008 / Consolidated Insured Portfolio Highlights

Radian Asset Assurance Inc.

Consolidated Insured Portfolio Highlights*

($ Millions)

Rating Distribution**

Rating**	Net Par Outstanding (09/30/2008)		Percent of total Net Par		Net Par Outstanding (12/31/2007)		Percent of total Net Par
Public Finance
AAA	$	2,533	2.4	%	$	1,943	1.7	%
AA		18,455	16.6	%		19,560	16.8	%
A		18,693	16.8	%		20,753	17.9	%
BBB		16,587	14.9	%		18,044	15.6	%
Below Investment Grade		2,465	2.2	%		1,709	1.5	%
Not Rated		32	0.0	%		43	0.0	%
Subtotal Public Finance	$	58,765	52.9	%	$	62,052	53.5	%
Structured Finance
AAA	$	46,428	41.9	%	$	48,267	41.6	%
AA		889	0.8	%		858	0.8	%
A		1,657	1.5	%		1,541	1.3	%
BBB		2,498	2.2	%		2,471	2.1	%
Below Investment Grade		97	0.1	%		86	0.1	%
Not Rated		694	0.6	%		747	0.6	%
Subtotal Structured Finance	$	52,263	47.1	%	$	53,970	46.5	%
Total
AAA	$	48,961	44.3	%	$	50,210	43.3	%
AA		19,344	17.4	%		20,418	17.6	%
A		20,350	18.3	%		22,294	19.2	%
BBB		19,085	17.1	%		20,515	17.7	%
Below Investment Grade		2,562	2.3	%		1,795	1.6	%
Not Rated		726	0.6	%		790	0.6	%
Total	$	111,028	100.0	%	$	116,022	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 Sept. 30, 2008 / Consolidated Insured Portfolio Highlights

Radian Asset Assurance Inc.

Consolidated Insured Portfolio Highlights*

($ Millions)

Geographic Diversification

	Net Par Outstanding (09/30/2008)		Percent of total Net Par		Net Par Outstanding (12/31/2007)		Percent of total Net Par
Domestic public finance
California	$	6,831	6.2	%	$	7,191	6.2	%
New York		5,374	4.8	%		5,862	5.2	%
Texas		4,491	4.0	%		4,454	3.8	%
Pennsylvania		3,319	3.0	%		3,298	2.8	%
Illinois		3,054	2.8	%		3,156	2.7	%
Florida		2,996	2.8	%		3,466	3.0	%
New Jersey		2,525	2.3	%		2,666	2.3	%
Massachusetts		2,044	1.8	%		2,417	2.1	%
Washington		1,942	1.7	%		2,056	1.8	%
Colorado		1,828	1.6	%		1,831	1.6	%
Top ten states – domestic public finance subtotal		34,404	31.0	%		36,397	31.5	%
Total of other states – domestic public finance		18,369	16.5	%		20,124	17.3	%
Total domestic public finance		52,773	47.5	%		56,521	48.8	%
Domestic structured finance		35,587	32.1	%		37,054	31.9	%
International public and structured finance		22,668	20.4	%		22,447	19.3	%
Total	$	111,028	100.0	%	$	116,022	100.0	%

* See Consolidated Explanatory Notes on page 18.

11  Quarterly Operating Supplement for the Period Ended Sept. 30, 2008 / Consolidated Insured Portfolio Highlights

Radian Asset Assurance Inc.

Consolidated Insured Portfolio Highlights* ($ Millions)

25 Largest Public Finance Exposures

Obligor	Net Par Outstanding (09/30/2008)		Percent of total Net Par		Rating**
New York, NY – G.O.	$	755	0.7	%	AA
California – G.O.		738	0.7	%	A+
Port Authority of New York & New Jersey		683	0.6	%	AA-
Chicago, IL – G.O.		567	0.5	%	AA
New Jersey Transportation Trust Fund Authority		538	0.5	%	AA-
Washington – G.O.		461	0.4	%	AA+
Los Angeles Unified School District, CA		421	0.4	%	AA-
Metropolitan Transportation Authority, NY		402	0.4	%	A
Massachusetts – G.O.		379	0.3	%	AA
Massachusetts School Building Authority		359	0.3	%	AA+
Thames Water Utilities Finance PLC, UK		356	0.3	%	A3
New Jersey Economic Development Authority School Facilities		347	0.3	%	AA-
Illinois – G.O.		289	0.3	%	AA
Puerto Rico – G.O.		287	0.3	%	BBB-
Jefferson County, AL – Sewer Revenue		283	0.3	%	CCC
Long Island Power Authority, NY		276	0.2	%	A-
District of Columbia		259	0.2	%	A+
New Jersey Turnpike Authority		248	0.2	%	A
Metropolitan Washington DC Airports Authority		243	0.2	%	AA-
Illinois Toll Highway Authority		243	0.2	%	AA-
New York City Municipal Water Finance Authority		225	0.2	%	AA+
Reliance Rail Corp., AU		218	0.2	%	BBB+
Bay Area Toll Authority, CA		212	0.2	%	AA
Houston Airport System		212	0.2	%	A+
Puerto Rico Electric Power Authority		205	0.2	%	A-
Total	$	9,206	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 $486 million transaction representing a Managed Cashflow Investment Grade Asset-Backed CDO rated A. This transaction is on Radian’s Watch List with an internal rating of CCC-.

• 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 $19.3 billion, or 17.4% of Radian’s Net Par Outstanding as of September 30, 2008.

* 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 Sept. 30, 2008 / Consolidated Insured Portfolio Highlights

Radian Asset Assurance Inc.

Consolidated Insured Portfolio Highlights*

($ Millions)

Below Investment Grade Exposure by Sector**

Sector	Net Par Outstanding (09/30/2008)		Percent of total Net Par		Net Par Outstanding (12/31/2007)		Percent of total Net Par
Public Finance
General Obligations	$	1,301	1.2	%	$	1,155	1.0	%
Utilities		405	0.4	%		121	0.1	%
Healthcare		222	0.2	%		79	0.1	%
Education		218	0.2	%		114	0.1	%
Tax Backed		165	0.1	%		102	0.1	%
Long Term Care		84	0.1	%		55	0.1	%
Transportation		22	0.0	%		24	0.0	%
Housing		7	0.0	%		20	0.0	%
Other Public Finance		41	0.0	%		39	0.0	%
Subtotal Public Finance		2,465	2.2	%		1,709	1.5	%
Structured Finance
Asset Backed – Consumer		61	0.1	%		67	0.1	%
Asset Backed – Mortgage and MBS		22	0.0	%		—	0.0	%
Asset Backed – Commercial and Other		12	0.0	%		14	0.0	%
Collateralized Debt Obligations		2	0.0	%		5	0.0	%
Subtotal Structured Finance		97	0.1	%		86	0.1	%
Total	$	2,562	2.3	%	$	1,795	1.6	%

10 Largest Health Care Exposures

Obligor	Net Par Outstanding (09/30/2008)		Percent of total Net Par		Rating**
North Bay Plenary Health Canadian Hospital	$	189	0.2	%	AAA
Consort Healthcare Limited		118	0.1	%	BBB-
Catholic Health Initiatives		112	0.1	%	AA
Capital Hospitals		108	0.1	%	BBB-
Bon Secours Health System Inc.		107	0.1	%	A-
OSF Healthcare System Inc.		105	0.1	%	A
Group Health Cooperative		102	0.1	%	A-
Carolinas Healthcare System Charlotte- Mecklenburg Hospital		94	0.1	%	AA-
Stanford Health Services		91	0.1	%	A+
Memorial Hermann Hospital System		86	0.1	%	A
Total	$	1,112	1.1	%

* 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 Sept. 30, 2008 / Consolidated Insured Portfolio Highlights

Radian Asset Assurance Inc.

Consolidated Insured Portfolio Highlights*

($ Millions)

CDO Exposure

	Net Par Outstanding (09/30/2008)		Percent of Total CDO Net Par		Net Par Outstanding (12/31/2007)		Percent of Total CDO Net Par
Direct	$	44,141	96.1	%	$	45,121	96.1	%
Assumed		1,789	3.9	%		1,840	3.9	%
Total	$	45,930	100.0	%	$	46,961	100.0	%

Total CDO Portfolio Rating Distribution**

	Net Par Outstanding (09/30/2008)		Percent of Total CDO Net Par		Net Par Outstanding (12/31/2007)		Percent of Total CDO Net Par
AAA	$	45,132	98.3	%	$	46,491	99.0	%
AA		142	0.3	%		149	0.3	%
A		651	1.4	%		175	0.4	%
BBB		3	0.0	%		141	0.3	%
Below Investment Grade		2	0.0	%		5	0.0	%
Not Rated		—	0.0	%		—	0.0	%
Total	$	45,930	100.0	%	$	46,961	100.0	%

Direct CDO Underlying Asset Types

	Direct CDO Net Par Outstanding (09/30/2008)		Percent of Direct CDO Net Par		Direct CDO Net Par Outstanding (12/31/2007)		Percent of Direct CDO Net Par
Corporates	$	38,021	86.1	%	$	38,822	86.0	%
Other		6,120	13.9	%		6,299	14.0	%
Total	$	44,141	100.0	%	$	45,121	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 Sept. 30, 2008 / 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 Out- standing ($ Millions)	ABS		RMBS		Sub- prime RMBS		CMBS		CDO of Invest- ment Grade Corporate		CDO of High Yield Grade Corporate		CDO of ABS		CDO of CDO		Other		Total Collateral Pool		S&P Rating	Moody’s Rating	Original AAA Subor- dination		Radian Asset Attach- ment Point		Radian Asset Detach- ment Point		% RMBS A3 or Better**		% Sub- prime A3 or Better**
2004	2009	253	33.3	%	30.2	%	0.0	%	0.0	%	33.6	%	2.9	%	0.0	%	0.0	%	0.0	%	100.0	%	AAA	Aaa	2.2	%	24.3	%	46.2	%	100.0	%	0.0	%
2005	2010	150	25.2	%	49.0	%	15.8	%	0.0	%	8.3	%	1.7	%	0.0	%	0.0	%	0.0	%	100.0	%	AAA	N/R	4.5	%	13.0	%	38.0	%	100.0	%	100.0	%
2006	2046	486	0.0	%	21.8	%	42.7	%	14.0	%	0.0	%	0.0	%	13.1	%	3.4	%	5.0	%	100.0	%	B+***	A2***	4.9	%	****		100.0	%	58.0	%	40.2	%
2006	2047	450	0.0	%	0.0	%	0.0	%	100.0	%	0.0	%	0.0	%	0.0	%	0.0	%	0.0	%	100.0	%	AAA	N/R	2.4	%	6.8	%	30.0	%	NA		NA
2006	2049	599	0.0	%	0.0	%	0.0	%	100.0	%	0.0	%	0.0	%	0.0	%	0.0	%	0.0	%	100.0	%	AAA	N/R	0.6	%	5.1	%	30.0	%	NA		NA
2006	2056	353	0.0	%	0.0	%	0.0	%	100.0	%	0.0	%	0.0	%	0.0	%	0.0	%	0.0	%	100.0	%	AAA	N/R	5.5	%	6.5	%	30.0	%	NA		NA
2007	2047	430	0.0	%	0.0	%	0.0	%	100.0	%	0.0	%	0.0	%	0.0	%	0.0	%	0.0	%	100.0	%	AAA	Aaa	2.4	%	7.0	%	50.0	%	NA		NA
Total		2,721

* 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.

*** S&P downgraded this CDO to AA- in March 2008 and then to B+ in July 2008 and Moody’s downgraded it to Aa3 in April 2008 and then to A2 in July 2008. This credit was added to Radian Asset’s Watch List with an internal rating of BB- in April 2008 and subsequently downgraded to CCC- in August 2008.

**** Although the current attachment point equals $119.9 million (19.8%), Radian does not currently expect the remaining subordination will be sufficient to absorb losses from the remaining collateral and expects to pay claims on this transaction. The amount and timing of any claims that Radian may be obligated to pay in the future is uncertain. However, given the transaction structure and current level of remaining subordination, Radian does not expect to begin paying claims for many years.

15  Quarterly Operating Supplement for the Period Ended Sept. 30, 2008 / Consolidated Insured Portfolio Highlights

Radian Asset Assurance Inc.

Consolidated Insured Portfolio Highlights*

($ Millions)

Non-CDO RMBS Portfolio: Breakdown by Asset Type

	Net Par		% of RMBS		Direct			Assumed Non-			Assumed			Assumed		% 2006/2007	Ratings***
	Outstanding		Portfolio		Total**			HELOC’s			HELOC’s			Total		Vintage	AAA		AA		A		BBB****		BIG*****
SubPrime	$	392.5 MM 141 Policies	36.1	%	$	126.7 MM 7 Policies 32.3	%	$	221.6 MM 130 Policies 56.5	%	$	44.2 MM 4 Policies 11.2	%	$	265.8 MM 134 Policies 67.7%	10.2% / 31.2%	17.4	%	0.6	%	2.2	%	4.5	%	75.3	%
Prime	$	274.7 MM 68 Policies	25.3	%	$	123.0 MM 7 Policies 44.8	%	$	69.6 MM 45 Policies 25.3	%	$	82.1 MM 16 Policies 29.9	%	$	151.7 MM 61 Policies 55.2%	6.6% / 33.1%	64.6	%	7.7	%	3.9	%	15.4	%	8.4	%
Alt A	$	388.2 MM 61 Policies	35.7	%	$	73.2 MM 3 Policies 18.9	%	$	248.9 MM 52 Policies 64.1	%	$	66.1 MM 6 Policies 17.0	%	$	315.0 MM 58 Policies 81.1%	26.0% / 32.9%	50.7	%	2.6	%	8.5	%	12.3	%	25.9	%
Second to Pay	$	30.9 MM 8 Policies	2.9	%	$	0 MM 0 Policies 0.0	%	$	30.9 MM 8 Policies 100.0	%	$	0 MM 0 Policies 0.0	%	$	30.9 MM 8 Policies 100.0%	0.0% / 100.0%	16.9	%	8.3	%	0.0	%	0.0	%	74.8	%
Total RMBS	$	1,086.3 MM 278 Policies	100.0	%	$	322.9 MM 17 Policies 29.7	%	$	571.0 MM 235Policies 52.6	%	$	192.4MM 26 Policies 17.7	%	$	763.4 MM 261 Policies 70.3%	14.6% / 34.3%	41.2	%	3.3	%	4.8	%	10.0	%	40.7	%

* See Consolidated Explanatory Notes on page 18.

** Radian has no direct HELOC exposure. No direct RMBS have been written since 2005 and no direct SubPrime RMBS have been written since 2004

*** Indicated ratings are based on Radian’s 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 Sept. 30, 2008 / Consolidated Insured Portfolio Highlights

Radian Asset Assurance Inc.

Consolidated Insured Portfolio Highlights*

($ Millions)

Net Debt Service Amortization

	Scheduled Net Debt Service Amortization as of 09/30/2008		Ending Net Debt Service Outstanding
2008	$	1,357	$	155,572
2009		7,291		148,281
2010		6,844		141,437
2011		7,014		134,423
2012		11,054		123,369
2013-2017		53,008		70,361
2018-2022		22,543		47,818
2023-2027		17,715		30,103
After 2027		30,103		—
Total	$	156,929

* See Consolidated Explanatory Notes on page 18.

17  Quarterly Operating Supplement for the Period Ended Sept. 30, 2008 / 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, 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, 2007.

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

3. For the quarter ended September 30, 2008, net premiums written decreased $45.3 million to $13.8 million as compared to $59.1 million for the quarter ended September 30, 2007. The decrease was primarily due to a $15.7 million decrease in public finance direct and a $25.4 million decrease in public finance reinsurance. For the year-to-date periods, net premiums written during 2008 decreased $74.1 million to $70.4 million from $144.5 million of net premium written during the 2007 period, as public finance direct written decreased $33.1 million and public finance reinsurance written decreased $36.3 million. In light of current market conditions, Radian has discontinued, for the foreseeable future, writing any new financial guaranty insurance other than as may be necessary to commute, restructure, hedge or otherwise mitigate losses or reduce exposure in our existing portfolio.

4. Net premiums earned for the quarter ended September 30, 2008, increased $20.7 million to $53.4 million from $32.7 million during the 2007 quarter. The increase was primarily the result of public finance refundings which were $23.2 million higher for the 2008 quarter than the 2007 quarter. Net premiums earned for the year-to-date period ended September 30, 2008 were $134.7 million compared to $98.2 million earned during the comparable period in 2007, an increase of $36.5 million primarily the result of an increase in public finance refundings of $39.8 million.

5. For the quarter ended September 30, 2008, the loss on investments was $26.9 million versus a gain of $5.5 million for the 2007 quarter, a change of $(32.4) million. The 2008 quarter included impairments of $11.8 million and a $13.0 million loss pertaining to the mark to market on hybrid securities. During the 2007 quarter, there were no impairments and the mark to market on hybrid securities was a gain of $4.1 million. For the year-to-date period of 2008, the loss on investments was $63.8 million versus a gain of $13.9 million for the comparable period of 2007, a change of $(77.7) million. The 2008 results included impairments of $34.0 million and a loss of $30.5 million on the mark to market on hybrid securities. The 2007 year-to-date results had no impairments and a $3.9 million gain on the mark to market on hybrid securities.

18  Quarterly Operating Supplement for the Period Ended Sept. 30, 2008 / Consolidated Explanatory Notes

Radian Asset Assurance Inc.

Consolidated Explanatory Notes

6. Loss and loss adjustment expenses for the quarters ended September 30, 2008 and 2007, were $25.7 million and $52.1 million, respectively. The 2008 quarter included $21.0 million of reserve strengthening of non-specific for the structured finance reinsurance line of business as a result of market conditions in the residential mortgage sector. The 2007 quarter losses and loss adjustment expenses is primarily related to one financial guaranty transaction. An allocated non-specific reserve of $50 million was established for this transaction. Loss and loss adjustment expenses for the year-to-date periods ended September 30, 2008 and 2007, were $48.1 million and $48.2 million respectively. The 2008 year-to-date period included $39.0 million of reserve strengthening of non-specific for the structured finance reinsurance line of business as a result of market conditions in the residential mortgage sector.

7. Other operating expenses were $36.9 million for the quarter ended September 30, 2008 versus $9.9 million for the 2007 period, an increase of $27.0 million. The increase in other operating expenses for the third quarter of 2008 was primarily comprised of $10.8 million of severance as a result of Radian’s decision to cease writing new business in light of current market conditions, and an increase of $12.5 million of allocated expenses from Radian Group primarily due to increases of audit fees, legal fees, insurance, and employee costs. For the year-to-date period of 2008, other operating expenses were $72.5 million compared to $36.8 million for the year-to-date period of 2007, an increase of $35.7 million. The increase in other operating expenses for the year-to-date period of 2008 was primarily comprised of $16.2 million of severance and a year-over-year increase of $16.3 million of allocated expenses from Radian Group primarily due to increases of audit fees, legal fees, insurance, and employee costs.

8. The decrease in losses and loss adjustment expense reserves reflects 2008 payments of $100.0 million pertaining to one financial guaranty transaction for which reserves of $100.0 million were established in 2007 which was partially offset by the increase in reserve strengthening resulting from market conditions in the residential mortgage sector.

9. During June 2008, Radian declared an ordinary dividend in the amount of $107.5 million.

19  Quarterly Operating Supplement for the Period Ended Sept. 30, 2008 / 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, structured finance, mortgage and related credit markets; changes in investor perception of the strength of us individually, or 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, or substantial reduction of business from, a customer with whom we have a concentration of our insurance in force or the influence of large customers; rights of primary insures to recapture business previously ceded to us, 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 and structured finance insurance portfolios; ratings actions with respect to Radian Group’s credit ratings or the financial strength ratings assigned by the major ratings agencies to us or any of our insurance subsidiaries, and rights of customers to terminate policies as a result of such ratings actions; 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; potential for regulatory action or litigation; 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; 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, as modified by Part I Item 1A of Radian Group’s quarterly report on Form 10-Q for the period ended March 31, 2008, Part I Item 1A of Radian Group’s quarterly report on Form 10-Q for the period ended June 30, 2008 and Part I Item 1A of Radian Group’s quarterly report on Form 10-Q for the period ended September 30, 2008. 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.

20  Quarterly Operating Supplement for the Period Ended Sept. 30, 2008 / Safe Harbor Statement