Ladies and gentlemen, thank you standing by and welcome to the Radian’s third quarter 2009 earnings conference call. At this time, all lines are in a listen-only mode. Later there will be a question-and-answer session and instructions will be given at that time. (Operator instructions). And as a reminder, today’s call is being recorded. I'd like to turn the conference over to Terri Williams-Perry. Please go ahead.

Thank you, Tim. Good morning and welcome to Radian’s third quarter 2009 conference call. If you do not have a copy of our press release, which contains the financial results for the quarter, you may obtain it from our Investor Relations Web site at www.radian.biz. During this morning’s call you will receive prepared remarks from SA Ibrahim, Radian’s Chief Executive Officer and Bob Quint, Chief Financial Officer. Also on hand for the Q&A portion of the call are Teresa Bryce, President of Radian Guaranty; Derek Brummer, Chief Risk Officer of Radian Asset Assurance; and Scott Theobald, Executive Vice President and Chief Risk Officer of Radian Guaranty. Before we begin with our prepared remarks, I would like to remind you that statements made in this call will include forward-looking statements. These statements are based on current expectations, estimates, projections, and assumptions that are subject to risk and uncertainties, which may cause actual results to differ materially. For a discussion of these risks and uncertainties please review the cautionary statements set forth in the Safe Harbor statement included with our webcast slides and the risk factors included in our 2008 Form 10-K and the 2009 Form 10-Q. These are available on our Investor Relations Web site. And now, I would turn the call over to SA.

Thank you, Terri, and thank you all for joining us. I will begin today with my highlights of our third quarter performance, followed by additional details on our mortgage insurance and financial guaranty businesses. I will then update you on key developments since our last call, primarily on the progress we have made to write new profitable MI business, and also on our capital and liquidity positions. Bob will follow with specific details of our financial position and important trends. We will then open the call to your questions after some brief summary comments from me. Beginning with Radian’s quarterly results; earlier today we reported a third quarter net loss of $70.5 million or $0.86 a share. I'm pleased to say that these results were favorably impacted by our business mix, a profitable quarter in Financial Guaranty and positive results in Sherman Financial. These sources of income together partially offset the impact of our increased MI loss provision. This increase provision was driven by the higher delinquency counts we experienced in the quarter, along with the aging of delinquencies that contributed to $83 million loss for our mortgage insurance business. While the economic and business environment remains challenging in the third quarter, we successfully executed on several strategies to help ensure Radian’s long-term financial strength. We will provide details on these actions later in our remarks. We know that Radian’s financial strength is critical, particularly in today's volatile economy. Most importantly, our risk to capital ratio of 16.1 to 1 in the third quarter increased only slightly from the second quarter. We now believe that we can continue writing new MI business into 2010. We're also actively working on strategies to help ensure that we keep driving new business well into the future. There are several examples of Radian’s strength…

Thank you, SA. Good morning. I'll be updating you on to the P&L activity and trends for the third quarter 2009, and our financial position as of September 30, 2009. Our MI provision for losses of $376 million this quarter reflects a higher delinquency counts and continued aging of delinquencies. Our recent denial and rescission levels continue to be much higher than historic levels, and we expect it to continue as long as our delinquencies are concentrated in the poor underwriting periods of 2006, 2007 and early 2008. Because the majority of our loss reserves are from later-stage delinquencies or pending claims on loans from the ’06, ’07, and early ‘08 vintages, we have good insight as to what kind of loans these are and what they anticipated recession rates on these loans will be. Some updated statistics regarding recent denial and rescission levels are contained in the webcast slide number 9. Our actual dollar amount of denials and rescissions for third quarter of 2009 was approximately $300 million and was approximately $950 million year-to-date. These figures include loans in deals with remaining deductibles for which we would not obtain a claim. Paid claim for the quarter were $243 million, consisting of $210 million of first lien and $33 million of second-lien with $22 million of the second-lien figure coming from a deal termination. Claims paid were again less than expected. Please note that, net claims paid reported in our disclosure were significantly reduced by recoveries of trust balances from terminated captive reinsurance agreements that are accounted for as claim recoveries. Claim recovery amounts, which do not have a ceded loss recoverable associated with them positively impact the incurred loss line, while recovery on an amount already recorded as a ceded loss recoverable goes against that recoverable and does not…

Thank you, Bob. Before we open up to your questions, we would like to leave you with the following takeaway points. Radian’s book value at September 30, 2009 of $25.91 per share, Radian’s risk to capital ratio of 16.1 to 1 on September 30, and we now believe that we can comfortably write new MI business into 2010. Mortgage insurance paid claims, again, lower than forecasted and now expected to be less than $1 billion for the year. Approximately $380 million in liquidity available to Radian Group. And our continued focus on mitigating and managing our legacy risks and ensuring our inability to write profitable new MI business. Operator, we are now ready to take questions.

Thank you. (Operator instructions) And our first question then today comes from the line of Mike Grasher with Piper Jaffray. Please go ahead. Mike Grasher – Piper Jaffray: Thank you, and good morning. Bob, just going back to the TRuPS, can you give us a little bit more detail around – and I understand subordinations are high and they look fairly reasonable here. But can you give us more details or examples around, maybe an issue or two in your experience on foreclosures within any of the particular issues?

Mike, I think what you mean maybe is defaults. And the predominant the reason for the deterioration in the TruPs is due to deferrals rather than defaults. There have been some defaults, but there have been many deferrals. So the banks have chosen to defer interest and that impacts the cash flow of the deal. Mike Grasher – Piper Jaffray: Okay. So when we read about the Feds going in and closing down community banks here and there, are you saying that’s no impact at all on your issue?

Well, if there is a default, then that would reduce the subordination in the deal. If there is a deferral that’s going to impact the cash flow within the ultimate outcome of the those deferrals whether the deferrals become defaults – and like we said they have five years – or they end up curing, that will impact the ultimate outcome of the deals. Mike Grasher – Piper Jaffray: Okay. That’s helpful. Then also with regard to the bulk of new claims that are coming through, can you talk about the vintage that maybe those lie in? Are they still coming through for '06, '07, and ’08? Have those changed or can you give us some mix of what the new claim activity looks like?

Hi, this is Teresa. Yes, most of them we are still seeing are in the vintages of 2006 and 2007, some obviously for 2008, but clearly mostly 2006 and ’07. Mike Grasher – Piper Jaffray: Okay. Is it your sense that if you think about the ’06, ‘07 claims that have already come though versus the new ones that are arriving, is there a difference in the type of claim? In other words, is it – are the earlier claims more related to the fraud and maybe terms for rescissions versus the new ones coming through, maybe tied to less about credit quality, but more about I guess the ability to make the mortgage payment or employment related type of claims.

Mike Grasher – Piper Jaffray: Okay. That’s helpful. Thank you much.

Great, thank you. And we have a question then from the line of Mark DeVries with Barclays Capital. Please go ahead. Mark DeVries – Barclays Capital: Thanks. Could you just comment on what you are seeing on roll rates for seriously delinquent loans? What percentage of those loans are just sticking around longer due to backlogs with servicers working on modifications? What percentage are curing? And of those that cured, how much of those effectively are just curing due to rescission?

I think we’ve seen a continuation where many of the late stage delinquencies are just staying. So there is this backlog and that the main reason that claims paid have been lower. So the ultimate outcome of these loans has not been determined yet, obviously some will go to claim at which time we will either pay the claim or we will rescind, but most of them have really stayed around in the late state delinquency bucket. Mark DeVries – Barclays Capital: Okay, great. And Bob, could you comment at all, if we get an extension of the NOL period, what that might mean for you and how T&L bonds would affect that?

Yes, preliminarily if that happens we don’t think it’s going to have a material impact. Certainly it would have minimal impact on the consolidated situation for Radian. Mark DeVries – Barclays Capital: Okay, thanks.

Great, thank you. And next we will go to the line of Steve Stelmach with FBR. Please go head. Steve Stelmach – FBR: Hi, good morning. Bob, can you just – you mentioned slide 12 and the cumulative claim frequency looks like the assumptions that you are using have improved from 13.5% roughly to about 11%. Is the improvement based solely on denials, I guess a higher expectation for denials and recessions? Or is there something about the underlying quality today that you think is better versus maybe couple quarters ago?

Absolutely. I think the main reason it’s come down sort of throughout the year is because of the denial and recession estimates, but every quarter we keep adding what we believe is very good business to the mix. And clearly our expected claim rates on the new business are much, much lower so that’s going to impact the numbers as well. Steve Stelmach – FBR: And just to follow up on that, the cure rate question. Can you give us some context of where it was historically, where it is today, and where do you expect it to go absent the rescissions and denials?

Steve Stelmach – FBR: You would need to see home price appreciation or at least some stabilization for cure rates to improve from here?

Yes, and also certainly modification efforts coming through because those would be cures as well. Steve Stelmach – FBR: All right. Thank you very much.

Great, thank you. And our next question then comes from the line of Mike Grondahl with Northland Securities. Please go ahead. Mike Grondahl – Northland Securities: Yes, SA, if you could kind of just walk us through strategically what are the couple things you are working on the most to really continue to write new quality business, to take market share, and kind of continue to plow forward?

Thanks, Mike. There are couple of things to keep in mind here. First, we have successfully moved Radian’s mortgage insurance strategy to focus on traditional high quality business. And have done so based on significant additions we have made to our risk management infrastructure and risk management changes. And on the customer relationship side, we’ve brought on new sales people. We are now going after a mid size and smaller accounts in a bigger way than Radian used to go historically. Our goal is to put in place a mortgage insurance strategy that positions us well for market recovery. In terms of our ability to keep writing more mortgage insurance business, I outlined the various initiatives that we are looking at. First, we benefit to the extent that industry efforts in relaxing the 25 to 1 requirement change. Second, we are fortunate and benefit from having our Amerin entity which we have been preparing and have made progress in getting ready to write business in those states were 25 to 1 still remains a factor. In addition, we’ve benefitted from the fact that our risk to capital ratio for mortgage insurance went up only slightly. And then we outline the various other strategies that we are working. All in all, the name of – our focus is really having now repositioned our mortgage insurance business successfully to continue to take advantage of the opportunities in the market, and the market share quarter to quarter will go up and down, but the important point here is we are at a much higher level than our historical market share level. Mike Grondahl – Northland Securities: Okay. And just as a follow up, maybe for, Bob. Clearly, the Financial Guaranty business had a reserve release during the third quarter, the $143 million. When that release was taken, was it taken with full knowledge that the bank TruPs portfolio was going to have this fourth quarter hit, so that was kind of factored into it too? Or did that come up after the fact?

Mike, the release is in the fourth quarter. So that hasn’t occurred in the number that you are looking at. That has not occurred and that is due to the overall reduction of exposure in the portfolio. So it is completely separate. So we are going to take this contingency reserve, move it to surplus. That increases surplus. But as well in October, we had this TruPs default, which will require a statutory loss reserve and we just related the two because one will increase surplus, one will decrease surplus. And right now, the one that’s going to increase surplus is higher. But there are other things that are going to impact surplus as well. But that’s a fourth quarter event. Mike Grondahl – Northland Securities: Okay. But you are still happy with the reserve release of $143 million, knowing that the TruPs hit is coming. I guess that was my question.

That’s been approved. So that’s going to happen regardless.

Mike Grondahl – Northland Securities: Okay. Sure. And then any update on commutations in the Financial Guaranty business?

Mike Grondahl – Northland Securities: Okay.

Great, thank you. And our next question then comes from the line of Matthew Howlett with Fox-Pitt Kelton. Please go ahead. Matthew Howlett – Fox-Pitt Kelton: Thank guys for taking my question. Just on the reserve per delinquent loan, it trended down a little bit this quarter. There was a peer of yours that mentioned – that guided – it continued to trend down in the fourth quarter. You mentioned your delinquencies are going to be up in the fourth quarter. Any guidance around that?

Around reserve per delinquent loan? Matthew Howlett – Fox-Pitt Kelton: Yes.

No, we didn’t give. We just said we expect delinquencies to increase in the fourth quarter. Reserve per delinquent loan, that depends on a lot of other factors that will change in the fourth quarter. Matthew Howlett – Fox-Pitt Kelton: Okay, fair enough. Let me ask this then, of these $200 million of you said rescissions or denials this quarter, how much reserves did you have against those loans that eventually you rescinded or denied? Could you give us that number?

We can’t give you that number. I don’t have that number. But that’s just the dollar amount of recession. So if you think about we are already incorporating an estimate of recessions on our entire delinquent portfolio. The dollar amount of rescissions is certainly relevant because it shows you the amount that we are doing, but you can’t really relate it to the P&L specifically. Matthew Howlett – Fox-Pitt Kelton: Okay. And just on your assumptions, I know you gave the cumulative claim frequency on page 12. Any way you could tell us what that frequency was, that gross number is sort of before denials and rescissions?

We haven’t done that math. But I think we do – we are giving more and more information around the percentage of that recession. So you can –. Matthew Howlett – Fox-Pitt Kelton: I can do it that way. Great. Just a last question on HAMP, you gave us the level of loans that have entered into trial period. The Treasury also puts out what they say is eligible, the 3.1 million. Some MIs have been giving eligibility rates. Is there any way to tell when you look at your delinquency portfolio or your just overall portfolio what could fit under that eligibility window with that?

Hi, this is Teresa. I think first of all, we’ve been very pleased with the ramp up that we’ve seen in the number of loans that have gone into the HAMP modification trial period. So we’ve seen a huge expansion of that over the last couple of months, particularly as some of the servicers were able to start really pushing these through. The difficulty I think is that we don’t have access to the income information that would allow us to really sort of size the number. And so while we continue to look for opportunities to try to size that I don't think we are comfortable with trying and make that projection about how much of the portfolio is HAMP eligible right now. We do believe that our portfolio will be consistent with the other portfolios. Matthew Howlett – Fox-Pitt Kelton: And that is obviously not baked into your cumulative claim frequency, any potential benefit from HAMP?

There is no specific. Matthew Howlett – Fox-Pitt Kelton: Great. Thank you.

Great, thank you. And our next question comes from the line of Nat Otis with KBW. Please go ahead. Nat Otis – Keefe Bruyette & Woods: Morning. Actually just two quick questions; first one on that $300 million in recession and denial activity this quarter, any way to break that out by either product or book year just to get an idea of what the larger percentages are of business that you are rescinding and denying right now?

Nat Otis – Keefe Bruyette & Woods: Is it fair to say that it is still primarily ’06, ’07 vintage, and maybe the majority still all-pay business right now?

Certainly from a vintage standpoint, yes. And that should continue as well. Nat Otis – Keefe Bruyette & Woods: All right. And then just one last quick follow-up question on something you said earlier. Did you say that on October, delinquencies were up 3.3%, was that the number you gave?

Yes. Nat Otis – Keefe Bruyette & Woods: Okay, all right, great. Thank you.

And compared to the numbers that we gave for previous two Octobers. Nat Otis – Keefe Bruyette & Woods: Great, thank you.

Great, thanks. And our next question then comes from the line of Ed Groshans with Ladenburg. Please go ahead. Ed Groshans – Ladenburg Thalmann:

Yes, this is Derek Brummer. It depends on the transaction in terms of the percentage of portfolio that would have to defer, and a lot of that’s going to be driven by the fact in terms of how the transaction is hedged. The particular transaction that we had a default on [ph] suffered from the fact that much of the cash flow was going to pay the interest rate hedges. So I think that’s very dependent upon the transaction in terms of the percentage of deferrals. Ed Groshans – Ladenburg Thalmann: Okay. So you could see some other ones have higher levels of deferrals, but not come in at the default depending on how much was hedged out or not.

By the transaction we suffered the interest shortfall on deferred from other transactions in a couple of ways. The collateral was of lower quality – the banks were of lower quality and collateral pool. And number two, more of the cash flow was going to pay the interest hedges compared to our other transactions. Ed Groshans – Ladenburg Thalmann: Okay. So then I guess, if I look at your footnote two and if I guess the parties that hold the notes do call the par amount, is it going to be the par amount less the amount of subordination after deferrals also? Do you need to burn through that first before there is actual cash payment from Radian, I guess is my question?

No, in the instance – if there is an outstanding event of default on the scheduled termination date of the swap, we would pay par. And our counterparty would have the right if they exercise that to either provide us with the bond or they would provide us with recoveries on the bonds over time, meaning paying us any coupon on the bond and ultimate principal recoveries. Ed Groshans – Ladenburg Thalmann: Okay. So if they did that it would actually be an immediate cash payment out and then recovery either via the receipt of the bonds or future cash flows?

Correct. Ed Groshans – Ladenburg Thalmann: Okay. Thank you so much.

Donna Halverstadt – Goldman Sachs: Hi, can you hear us now.

Yes. Donna Halverstadt – Goldman Sachs: Great. Thank you. I had a couple things I wanted to ask you about. And one is a topic that’s been under debate recently and that’s the idea of expanding the carry back provision from two years to five years for NOLs generated in 2008 and 2009, which could clearly generate some much needed cash for many different types of companies. A couple questions on that. One, what do you think odds of that passing are? Two, if it were to pass what amount of tax refund would you expect to get in 2010? And, thirdly, are there any quirks to your situation, whether it be related to tax and loss bond stuff or otherwise, that might prevent you from benefiting from that change in tax loss if it is implemented.

Donna, we don't really know the odds of it happening. However, the impact to Radian on a consolidated basis will be negligible. We don’t have additional carry back potential that we would be able to utilize. So on a consolidated basis we don’t think the impact will be more than very, very minimal. There may be some individual company impact and we don’t think that would be material, but we hadn’t really worked through exactly the specifics. Donna Halverstadt – Goldman Sachs: Okay, great. The other thing I wanted to ask you about is after you announced last quarter that you would be playing the Sherman card to satisfy the '09 tax obligation to Radian Guaranty I started wondering what types of things you might be able to do with respect to the 2010 obligation. And I was wondering if you’ve had any conversations with regulators about the possibility of extending that payment over a period of some years rather than paying it all in 2010. Or if there is any other types of moves you are thinking about other than spending the $250 million of cash in October 2010. Some way to spread it out or use some other asset to pay it off, anything going on on that front.

At this point, we expect to pay it off in cash. And of course, we’re always going to look for ways to improve our liquidity and capital situations. So there are things that – certainly things we are discussing and look at, but at this point, the expectation is that we will pay it off in cash. Donna Halverstadt – Goldman Sachs: Okay. And then I also wanted to get an update on something I haven’t asked about in a number of quarters, and that’s what your current outlook is on the Holdco [ph] having to make any payments under the variety of inter-company guarantees and capital support agreements that it's party to? How are you thinking about those right now, anything on horizon?

There is nothing material that we expect to happen there. There we’ve made, as you’ve seen in our disclosure, we made some small payments, but we certainly don’t think anything material is on the horizon. Donna Halverstadt – Goldman Sachs: Okay. The last question I had is with respect to the defaulted TruPs CDO portfolio, whether or not there is any sort of collateral posting requirements. And just more broadly for each of the MI business as well as the FG business, for the business that you have written in CDS form, is there anything we should be concerned about in terms of collateral postings or terminations?

On the FG side, we wouldn't be required to post collateral on the TruPs or any of our transaction. Donna Halverstadt – Goldman Sachs:

No, most of that exposure is either gone or very, very small. But no collateral posting at all. Donna Halverstadt – Goldman Sachs: Great. Thank you very much for taking my questions.

Great, thank you. And our next question then comes from the line of David Polson with AXA Investment Managers. Please go ahead. David Polson – AXA Investment Managers: Hi, thanks for taking my call. I am trying to make sure I under about the benefits of HAMP and HARP. Right now to what extent are any benefits – actual or potential benefits – in loss reserve numbers from those two programs?

At this point, we don’t have a specific addition to our loss reserve methodology that makes an assumption about how successful those programs will be. At this juncture so many of them are in the trial modification period that while the number is ramping up significantly, which we think is a good sign, we won’t see how that turns out until those start coming out of the trial mod periods which would be we expect later in the fourth quarter into the first quarter of next year. David Polson – AXA Investment Managers: So, the way that would work is any modification essentially becomes a cure and the reserve just comes off the books?

Mathematically. David Polson – AXA Investment Managers: Well, an actual modification as opposed to a trial one?

That’s right.

It’s not considered to be cured or truly modified until the trial – it comes out of the trial modification period. David Polson – AXA Investment Managers: I see. Okay, that’s very helpful. Now the $1.6 billion that you talk about, the capital and the Financial Guaranty subsidiary – or I guess that is claimed resources. In the mortgage insurance risk-to-capital ratio, is there any benefit in that ratio from the Financial Guaranty capital?

Yes, the $900 million. That surplus of $900 million, the $1.6 billion that SA mentioned is additional claims paying resource. That is going to be contingency reserves on our premiums and other items that are included within claims paying resources.

Now to the extent that contingency reserves release from that and go over to stacked capital that reduces that amount and contributes to our stacked capital. David Polson – AXA Investment Managers: Got it.

The $143 million we talked about moves from that pocket to a pocket where it benefits us. David Polson – AXA Investment Managers:

Yes. David Polson – AXA Investment Managers: Okay. So that’s a big part of that. Is that – can you maybe give us some color as to how much that is kind of unusual in the whole portfolio of TruPs that you have? Is that sort of a – does that really stand out from the pack or does that – if let's say, the bank environment continues to get worse or just commercial loans – the commercial real estate environment worsens in 2010, to what does that phenomenon bleed into other TruPs?

We have experienced deterioration across the portfolio. Like I indicated, that transaction suffered worse for a couple of reasons. Again, just because of the more accelerated deterioration in that particular portfolio and interest rate hedge on payments that had to be made. However, if we see continued deterioration in the banking sector, that will affect our other transactions.

Now independent of bank deteriorations, like we said, they have the option of deferring for five year where they could decide for reasons of their own to defer interest payments and then come back and pay them. David Polson – AXA Investment Managers: Right. And that’s where I was kind of going with this. To what extent does up to $90 million of reserves look forward to the potential for? Is that – how conservative is that with regards to deferrals turning into actual permanent non-payments?

Our forecast is conservative. We are getting very little recovery value for collateral that’s currently deferring. If it turns out that a higher portion defers and cures that would obviously affect the ultimate loss in the transactions. At this point in time, we haven’t seen an increase in cure. So we are not projecting that in our base case scenario. David Polson – AXA Investment Managers: All right, I guess, that’s all I got. Thanks.

Great, thank you. And next we go to the line of Brian Gonick with Senvest. Please go ahead. Brian Gonick – Senvest International: Good morning. I just want to clarify some of the comments on HAMP, relative to page 12, where you are showing net projected profit now. Just to confirm, that does not assume any benefits from HAMP, is that right?

No explicit benefit from modification. Brian Gonick – Senvest International:

Yes, a little over that.

It’s an estimate, but it’s very hard to – very difficult to get data and that data is not consistent by lender/servicer, by agency. So it is difficult at this point to get the data. That’s our best estimate, it could be higher. Brian Gonick – Senvest International: And is there any way to quantify what the reserves would be against those 12,000 loans?

There is no reason to believe it's not sort of an average part of the portfolio. So you could probably get in the ballpark, if you – you have to try. Brian Gonick – Senvest International: So if we use what reserves were for delinquent loan at the end of quarter of $17,000 or whatever, is that a fair number to use or would it be higher potentially?

I wouldn’t use anything other than the average to estimate it. And we don’t know.

But it would be aged defaults that would have potentially –

We don’t know that.

We don’t know that either.

We don’t know that. So I think that’s why it’s difficult to say specifically what the number would be. Brian Gonick – Senvest International: Right. Do you think in this quarter when you report the fourth quarter will have some data then on things that have gone or come out of trial?

I think we are certainly hopeful that we will see some of these start going out of the trial mod periods and curing. So I think we are hopeful that we will start to see some of that activity by the time we report the fourth quarter.

Though it may be more realistic to expect seeing some of that in the first quarter because these go through a trial period. Brian Gonick – Senvest International: Right. But I guess when you report the fourth quarter some time in, I don't know, February we might have some data at that point on which you can talk about it.

I think we would hope so, yes. Brian Gonick – Senvest International: Okay. Thank you.

Great, thanks. And our next question then comes from the line of Connor Ryan with Deutsche Bank. Please go ahead. Connor Ryan – Deutsche Bank: Hi, guys, thanks for your time. I was just wondering if you could quickly bridge the Holdco cash number for last quarter to this quarter. And just wanted to understand if you got your payments from the IRS this quarter?

No, there haven't been IRS payments for several quarters. The 105, as I recall, was several quarters ago. The main difference from last quarter is we paid $100 million of our credit facility and terminated it. That is the material item and then there were some ins and outs. We sold a small subsidiary and got $19 million, but that is really it. Connor Ryan – Deutsche Bank: Okay, great. Thank you.

Great, thanks. And we have a question then from the line of Nat Otis with KBW. Please go ahead. Nat Otis – Keefe Bruyette & Woods: Thanks, just one quick follow up on the HAMP modifications. Once they get through that trial mod period and in theory they are performing again – and obviously it sounds like you are being appropriately conservative on where they might go from there versus historical levels. Is there – can you give any color on what might happen in event that someone who went to HAMP, has gone through the trial period, comes out, is completely performing, reserves are released but then at a certain point in time then starts defaulting again? Are you going to treat that loan any differently than you would a normal loan that is first coming due or first going delinquent, or would you treat it differently from a reserving standpoint given that’s already gone through the HAMP modification process and might not been succeeding?

We would treat it as and give it a normal reserve consistent with the overall reserving levels that we would setup. Nat Otis – Keefe Bruyette & Woods:

Great, thank you. And we are going to go to the line of Jordan Hymowitz with Philadelphia Financial. Please go ahead. Jordan Hymowitz – Philadelphia Financial: Thanks for taking my question. I have two quick questions. One is can you break down your reserves for loans and default on prime versus let's just call it everything else?

Certainly, we haven’t done that. It really depends on the aging a lot. So it’s more than just the loan size, which defers. It’s the aging. It’s a variety of factors. But we haven’t broken the reserve for default down by product. We give you the reserves by products. So actually you can come close yourself because you know the delinquencies and you know the reserves. Jordan Hymowitz – Philadelphia Financial: Okay. My second question is the HAMP and HARP programs, if you all saw the MTIA data in the month of September the cure to default ratio was much higher. Do you think that was a result of the HAMP and HARP programs finally taking effect? And more superficially can you comment on your modifications in the month of September versus the quarter as a whole?

I think at this point we really don’t know if that’s the reason. We are trying to get better data and information about that. But it is really too early for us to know. Jordan Hymowitz – Philadelphia Financial: Did you see a big increase in your modifications in the month of September versus July and August?

We certainly saw a lot more loans going into the HAMP trial modification period. A significant change in that, yes. Jordan Hymowitz – Philadelphia Financial: Okay. All right, thank you very much.

Great, thank you. And our last question today comes from the line of John Evans with Friess Associates. Please go head. John Evans – Friess Associates: Can you just talk a little bit about – help us understand with the payments that you have, how much money you are still short at the Holdco to pay for the '11 bonds? And then maybe help us with your strategy to try to get those paid off, because it seems like if you get this paid off then you have a lot of time to kind of deal with all the other issues.

Well, we gave you the math. We have $380 million of cash. We’ve got an expected payment in October 10 of $250 million, which would leave $130 million and the current and the current par outstanding of $192 million. Now we have repurchased some of that. That’s certainly a possibility. And we are constantly seeking ways to deal with that shortfall, that we have made it a lot smaller over the last few quarters than it has looked previously. So that is something that we are keenly focused on. But right now, it is still ways off in terms of the maturity date. John Evans – Friess Associates: Do you think that you will have your plan in place before they go current?

Meaning, one year, is that what you are saying? John Evans – Friess Associates: Yes.

Obviously, it’s a high priority for us to deal with this. We are hopeful that we can do that as soon as we can.

We are very pleased with the fact that we’ve been able to shrink it. And as we’ve said, we remain focused on trying ways to either shrink it further to much more manageable level or to eliminate it. John Evans – Friess Associates: Right. And then the last question I would ask just relative to that, MGIC they seemed pretty convinced that they would be able to dividend up to the Holdco potential next year. Can you talk a little bit about just – I know that’s a long time from now, but do you have any thought processes that you may be able to dividend up to the Holdco?

Yes, it is a possibility. Any dividend that we pay from Radian Guaranty would need to be approved by our state regulator, Pennsylvania. So certainly it's a possibility. John Evans – Friess Associates: And just can you refresh my – is Pennsylvania at 25 to 1 yet or no?

No.

Pennsylvania never had 25 to 1. It’s been at the discretion of the regulator and we have very good relationship with the Pennsylvania regulator who has been very supportive of our efforts to write new business. John Evans – Friess Associates: And then the last question then, you don't anticipate dividend anything up at the end of this year, correct?

That’s right. John Evans – Friess Associates: Okay. Thank you.

Great, thank you. And that does end our question and answer portion for today’s call. At this time, then I would like to turn the conference back over Mr. SA Ibrahim.

I would like to thank all the participants for having participated in the call. And thank you again for the questions you’ve asked, and as always we will follow up if you have any issues through our IR group. Thanks.

Great, thank you. And, ladies and gentlemen, that does conclude our conference for today. Thank you for your participation and for using AT&T’s Executive Teleconference. You may now disconnect.