Ladies and gentlemen thank you standing by and welcome to the Radian’s second quarter 2009 earnings call. At this time all lines are in a listen-only mode. Later there will be an opportunity for questions and instructions will be given at that time. (Operator Instructions). And as a reminder this conference is being recorded. I'll now turn the conference over to Terri Williams-Perry of Investor Relations. Please go ahead.

Good morning and welcome to Radian’s second 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 website at www.radian.biz. During this morning’s call you will receive prepared remarks from S.A. 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; Dave Beidler President 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, projection, 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. These are available on our Investor Relations website. I will now turn the call over to S.A.

Thank you Terri, and thank you all for joining us. We will begin today as always with my overview of our second quarter performance, followed by a highlight of significant Mortgage Insurance and Financial Guaranty items. I'll then offer perspectives that are high level on two major topics that we believe are on your minds. Radian's mortgage insurance capital position and what we can do and are doing to continue writing profitable new business. And Radian's holding company liquidity position and what we can do and are doing to our address our liquidity needs in 2010 and 2011. Bob will follow with specific details on our financial position and operating performance as well as offer additional perspectives on capital and liquidity options and our Financial Guaranty business. Then after I summarize a few key points we will open the call to your questions. Starting with the quarterly results, earlier today we reported second quarter earnings of $232 million or $2.82 million per share. These results were driven by both our efforts in loss management and by unrealized gains on derivatives, while delinquencies continue to rise in the quarter our loss management actions offset the impact resulting in a lower than expected provision for losses. Not surprisingly loss management efforts had greater impact for the vintages of 2006, 2007 and for Alt-A loans, all of which are characterized by underwriting deficiencies. Despite an extremely challenging economic environment over the last two years, it is important to note that Radian's book value at June 30, 2009 was $25.12 per share. Our investment portfolio remains stable at $6.4 billion and our holding company liquidity is strong with approximately $480 million available. Bob will provide more information on these and other items including revised claims estimates for the remainder of the year. Clearly, managing…

Thank you, S.A., and good morning. I'll be updating you on the P&L activity and trends for the second quarter of 2009 and our financial position as of June 30, 2009. I'll also provide some more details around our capital and liquidity strategy. Our MI provision for losses of $142.8 million this quarter reflects higher delinquency counts and continued aging of delinquencies offset significantly by an increase in our assumptions related to denials and rescissions. Our recent denial and rescission levels are much higher than historical levels reflecting our loss management efforts to review more claims and the significant concentration of loans in our delinquency portfolio that were originated in the poor underwriting periods of 2006, 2007, and early 2008 as well as the concentration of delinquent Alt-A loans. We expect our level of denials and rescissions to remain elevated only so long as these vintages and product continue to represent a significant portion of our default inventory. Some statistics regarding recent denial and rescission levels are contained in webcast slide number nine. Such levels are built into our loss reserve estimate, which projects future claim payments on existing delinquencies. As such, an increase in the denial and rescission estimate has the effect of lowering our loss reserve estimate. Correspondingly, mortgage insurance premiums earned have declined due to an accrual for premium refunds on delinquent policies expected to be rescinded. Our paid claims for the quarter were $167.7 million consisting of $149.4 million of first liens and $18.3 million of second liens. Claims paid were again much less than expected due mainly to older delinquent loans being stalled before or during foreclosure proceedings, although we're still anticipating a jump in claims paid over the rest of the year and into 2010. We expect the total first and second lien claims…

Thanks, Bob. Before I open the call to your questions I'd like to leave you with four key take-away points. Our mortgage insurance business remains strong and early indications of credit quality on our new business are very positive. At quarter end almost half our primary risk in force consisted of mortgage insurance business written prior to or after the unprofitable years of 2005, 2006, and 2007. This share will keep increasing as we continue to write high-quality new business. We are and have been working on various initiatives to ensure that we have sufficient capital to keep writing new business nationwide and to proactively address our 2010 and 2011 liquidity needs. Our Financial Guaranty business and our ownership interest in Sherman give us unique advantages in terms of future valuation upsides while providing us with current capital and liquidity supports. Now, we'll turn the call over to your questions. Operator, we are ready for questions.

Thank you. (Operator Instructions). And our first question comes from Steve Stelmach with FBR Capital Markets. Steve Stelmach – FBR Capital Markets: Hi. Good morning and congrats on a good quarter. Just a couple of real quick questions and then maybe I'll hop back into queue. Bob I may have missed it, did you mention that the second-quarter provision included some true up of reserves due to rescission activity or is that…

Well, the reserves always include an estimate of rescissions and denials. The point was that this estimate has gone up. Steve Stelmach – FBR Capital Markets: Okay. All right. And then on the premium refund that you mentioned. Those loans that were poorly underwritten they clearly took up balance sheet capacity or capital capacity over the past few years, when you calculate your premium refunds do you incorporate some opportunity cost that you lost with, otherwise would have been good loans on the balance sheet or on exposure to, does that make sense. So in other words you have, you could have that capacity that was taken up by a bad loan could have been taken up by a good loan. Do you get compensated for the fact that, your capital was absorbed by these poorly underwritten loans?

No, we don't. Steve Stelmach – FBR Capital Markets: Okay. And then on the shelf offering just lastly, is that just a liquidity issue it sounds like, just liquidity it's not needed for the capital at the operating company, is that correct?

Steve, it gives us the flexibility, we've always said that we are open to looking at external capital at the right time and if it makes sense and this gives us the ability to do so. And as Bob said it may be something we could use to leap whatever gap remains in our 2011 liquidity needs. Steve Stelmach – FBR Capital Markets: Okay, thank you.

Thank you. Next we have Joe DiMarino with Piper Jaffray. Joseph DiMarino – Piper Jaffray: Thank you, good morning. Assuming you don't reach a capital solution in the near term at what point would you expect to bridge the 25 to 1 risk to capital limit?

As we've said making projections like that is frought with a lot of uncertainty because a lot of it is driven by future default experiences and the default, and impact on reserves. So we do not make those projections all we can say is that we feel comfortable we can continue writing at least through 2009. And we also say that the 25 to 1 ceiling applies at this point only in 14 states that MICA is working on. Joseph DiMarino – Piper Jaffray: And what is the limitation in the other states on average, I guess?

This is Teresa. There is no limitation in those states, currently from a statutory regulatory perspective. I'd also add that's the other reason we've been looking at how we could use Amerin Guaranty in the future if we needed it to write in those states that do have a 25 to 1 regulatory or statutory requirement, if there is no forthcoming relief from those requirements. Joseph DiMarino – Piper Jaffray: Okay, thank you. And then on page 19, or excuse me, page nine of your presentation the cumulative rescission rate I assume that that is referring to the period in which the claim is received?

That's right. Joseph DiMarino – Piper Jaffray: And if so what vintages for instance would be, let's just say the Q1 2008 rescission rate, what vintage would that be stemming from?

Well, it's going to be, all the vintages that would have claims coming in. So it's going to be, it's going to be obviously 2007 and prior and all those vintages. So it's kind of blended vintages. Joseph DiMarino – Piper Jaffray: Okay. On average about how long does it take to receive a claim from the time that on some of the more fraudulent business, how long does it take to receive a claim on that?

It really depends on the state, but the average is over a year so once it becomes delinquent. So chances are stuff coming in as a claim in the first quarter 2008, is going to be from prior to 2007 vintages. Joseph DiMarino – Piper Jaffray: Okay, thanks. That's helpful. And then can you talk a little bit about the impact in the quarter from loan modifications, how that affected your provision?

Well, this is Teresa. We don't make any assumptions in our model around the impact of loan modifications. Obviously, we did have some benefit in our results based on loan modifications. And we are actively participating in the various modification programs. We spent a considerable amount of effort being ready to launch that at the time the government requested that we all be ready to launch those programs. We're continuing to see how that activity is developing as you've seen a number of the loans are starting are in their 90-day trial period. So, we're hopeful that we will see some real modification activity start to show up in the fall.

But the key point here is to-date we have seen little benefit from loan modifications and our reserve numbers do not project an increase in loan modifications going forward. Joseph DiMarino – Piper Jaffray: Okay, thanks. That's really helpful. Then one last question, what is the biggest driver of the lower paids guidance for the year, aside from the fact that it was just lower in this quarter, I guess so what is driving it this quarter?

I think it's the same the same thing we have seen the aged delinquencies are just getting stalled before foreclosure and even in foreclosure. Now, we do expect that some of that to clear out and that's why we have projected increases for the third and fourth quarter. But up for the last year plus, we have seen just a lower amount of claims coming in and a lower amount of claims paid because of that and because of our loss management efforts. Joseph DiMarino – Piper Jaffray: All right. Thank you and congrats.

Thank you.

We'll go next to Matthew Howlett with Fox-Pitt, Kelton. Matthew Howlett – Fox-Pitt, Kelton: Thanks for taking my question. And congratulations on the quarter. Just getting back to the rescissions a competitor said that, I think when they released, they said the rescissions may not continue as high given a lender could essentially put it into arbitration, down the road. Is there anything to be made aware of that in terms of the way you are reserving and potentially the lender throwing the, disagreeing and throwing the case into arbitration?

Well what I would say is that currently what we have found and we have not changed our process for how we rescind or deny loans through this timeframe. We have only increased the number of claims that we are reviewing in that regard. So, we have been consistent throughout in that regard. And also to the extent that a lender rebuts we relook at that and respond, but we've seen a very low incidence of even rebuttals in that regard.

Also keep in mind we have paid substantial amount of claims and are still projecting this year. We paid nearly $1 billion in claims last year, which went to the lenders and we are projecting this year to do 1.1, in the $1.1 billion range, which is a substantial amount of payments to lenders. Matthew Howlett – Fox-Pitt, Kelton: Okay, gotcha. And I am assuming you are rescinding on claims on GSE portfolios, owned loan as well, and so far are they throwing anything into arbitration or are they pretty much going with you guys?

As I said we've gotten a very small percentage of rebuttals on our rescissions. Matthew Howlett – Fox-Pitt, Kelton: Okay, great. Fair enough. And then on the modification front, one of your competitors put out their estimate of what was eligible under HAMP and then HOPE for Homeowners. Is there a percent you could give us in terms of what fits under particularly the HAMP program that will be eligible to be modified?

At this point we do not have any such estimate although as we said we have resources available to participate with our lender partners in all of those programs. Matthew Howlett – Fox-Pitt, Kelton: Okay, great. Okay, great. Thank you for taking my questions, congratulations.

Thank you. We have a question from Mark DeVries with Barclays Capital. Mark DeVries – Barclays Capital: Yeah, thanks. First I just wanted to drill down a little more on the drop in paid claims Q-over-Q. And I think Bob you alluded to some type of a stalling in the process of claims, could you elaborate on that a little bit?

Well there are, we know there are state moratoriums, there are efforts underway both government and servicer initiatives to try to get more loans modified. So all of that plays into the reduction in claims as well, you saw in the first quarter our number had a large payment for second liens that was really a commutation payment. So first liens quarter-over-quarter there is not really a drop it's pretty flat, but we do expect the number to go up in the third and fourth quarter. Mark DeVries – Barclays Capital: Okay. And I'm sorry if I missed this where do you guys stand at this point with your remaining exposure on the second lien book?

It's $354 million and 40% of that is reserved for in loss reserves and premium deficiency. And we have many efforts underway to proactively reduce that risk even further. Mark DeVries – Barclays Capital: Okay. And finally what's your view on kind of the shape of the loss curves on some of these more troubled books, are you seeing more of an acceleration of losses or should we kind of think in a more traditional peak loss years three through five implying that if we look at, '06, '07 books we may still have several years of really elevated claims?

This is Scott Theobald. I can tell you that in general there is still kind of a seasoning pattern to the claims, but they're obviously at an elevated level from here. The good news is we're seeing an, even though things are increasing it's increasing at a decreasing rate. Mark DeVries – Barclays Capital: Okay. All right. Thank you.

We'll go next to Mike Grondahl with Northland Securities. Michael Grondahl – Northland Securities: Okay. Thanks, guys. Couple of questions. In terms of the liquidity, can you walk me through those numbers? I think you said you had $480 million minus a $100 million on the credit facility. So that will leave you with $380 million and you will need that to service the $220 million in '10, the tax payment. Then that will leave you 160 to address $250 million that will be due now in '011, am I thinking about that right, it seems like you've really closed that gap?

Yes. You’re thinking about it correctly and you've hit the primary, ins and outs, there might be some minor ones as well, but you've hit the primary. Michael Grondahl – Northland Securities: Okay. So you did make a ton of progress there that's great. Secondly, you got this $100 million dividend from the Financial Guaranty business late June, as performance there is still challenged, but it's not as bad as it clearly could be is there any chance you can get a dividend from that before next summer or what are kind of the deciding factors there if you could ever get more than the $90 million you're expecting to get next summer?

It's not our expectation to get anything before that. The $90 million that we mentioned would really be the next ordinary dividend in ordinary course. And, we're not at a point where in the near term, we expect to ask for an extraordinary dividend or get more, but to remind you those dividends provide liquidity to Radian Guaranty and Radian Guaranty's liquidity position is very strong because of the claim situation. So, it's not like the cash is needed in the near term to pay claims.

Also, Mike related to your question on slide 21 of our presentation we have shown how the CDO portfolio in Financial Guaranty runs off and starting 2012 through 2017. Michael Grondahl – Northland Securities: Gotcha. And then just lastly, did you see any delta 1Q to 2Q when it came to loan months, I mean I think you kind of clarified, how you're not seeing much traction, but you're also not taking any benefit in your provisions yet for it, but was there any lift in activity?

Well, I think first of all the new program, the HAMP program that the government rolled out was rolled out for an implementation date at the beginning of April. So, I think we have started to see a ramp up in activity up from the servicers and that has continued. We are hearing from, many of the servicers as well as from the GSEs that there are quite a few loans that are in their 90-day trial period. So we're still waiting to see how that turns out because they won't be considered modified until they get through that period successfully. So I think we saw this new program, which clearly the industry has, is working hard to work with and that's increased the activity, but we expect to see a ramp up in activity over the next few months. Michael Grondahl – Northland Securities: Okay. And then I don't know if you've commented, I might have missed it, but did you guys comment on the new delinquents coming into the funnel, did you see any seasonality there or were they up from the first quarter, down from the first quarter, what's the new delinquents that you're seeing, how has that level been?

The rate of increases is slowing and has continued to for the last couple of quarters. Michael Grondahl – Northland Securities: Well, that's a good start. Okay, hey, thanks, and you guys it looks like you made a lot of progress on a lot of initiatives you've been working on it seems like it came together well this June quarter. Thank you.

Thank you.

Thank you.

We'll go to Donna Halverstadt with Goldman Sachs. Donna Halverstadt – Goldman Sachs: Good morning. I certainly had lots of news this morning, most of my questions have been asked, but I do have some follow-ups. You made the comment that, you're getting on your recessions a very small percentage of rebuttals, do you think that that is somewhat due to the fact that lender services are just so completely overwhelmed and do you expect that percentage of rebuttals to go up as lender servicers get their sea legs back under them?

I think there is really no way for us to really know the answer to that. I mean, as I said, we’ve maintained our same process, we're looking at recessions and denials and we've been consistent in that regard. So, there is no change in that regard that would make us think differently, but we really can't know. Donna Halverstadt – Goldman Sachs: Okay. And then Bob I think you are the one who said with respect to some of the claims payments just being kind of stalled out and that some of that would show up as paid claims in the future. Is some, can you give us some size of the breadbox on some, are we talking 90% of it, 50% of it, 20% of it, kind of how much has just been stalled versus truly gone away?

We gave our estimate of claims paid for the third quarter and the whole year, so from that you can get the fourth quarter. So I think we've told you what we think we're going to pay in the third and fourth quarters. Donna Halverstadt – Goldman Sachs: When are you going to give 2010 paid claims guidance?

I think we'll give next quarter, we'll probably at least start it, give maybe the next several quarters or if we have more visibility, it's very difficult, but if we have more visibility we'll give the whole year, but I think we'll certainly go out a few quarters from wherever we're at. Donna Halverstadt – Goldman Sachs: Okay. And then with respect to the lower estimate, the $220 million that you need to pay back to the subs in 2010, it's down a lot from the previous range of 300 to 478. Is the 220 just a point estimate or is there a range there that we should be thinking about?

That's our current projection. The 478, which is the maximum is still, that hasn't changed, but our project, which is really based on the 2009 taxable loss, that's what drives that number. So think about it, we have six months of actual performance and we're projecting six months that's where the number comes from. Donna Halverstadt – Goldman Sachs: Okay. The last question I had is with respect to the 14 states where you have the 25 to 1 limit, what percent of your new business is in those 14 states?

We would estimate between 30 and 40% of the top point and some of those are states that, have had the highest default rates associated with them. Donna Halverstadt – Goldman Sachs: Okay. And I'm sorry you said 30 to 40%?

It could be a little bit higher. Donna Halverstadt – Goldman Sachs: Okay. Thank you very much.

Next we have Nat Otis with KBW. Nat Otis – KBW: Good morning. Just a couple quick questions, just on that timeline of the 14 states, do you have any idea of how long it might take to hear back from them on any type of regulatory reform there?

It could be a significant amount of time, we don't have an idea and in some states their legislative sessions aren't even every year, so it could be a much longer timeframe. So I mean I think while the industry is certainly working diligently on this, that's why we're looking at what other alternatives we have.

And, Nat that's the reason why we discussed the possibility of using Amerin, which is already licensed in all 50 states to, if we get all the right approvals to use that in those states where that still remains, 25 to 1 still remains a factor. Nat Otis – KBW: Okay, fair enough, thank you. And just one quick thing on the, I think Bob you said the rate of new delinquencies is slowing. Is that across all of your segments and pretty much more specifically, how is that prime book coming in, is it slowing with the prime book there as well?

This is Scott Theobald. What I can tell you is in the prime book, what we're seeing is even though we're seeing increases in new defaults on a comp basis, on a percentage basis, it's no different from last year. So, we're seeing kind of a stabilization in terms of trends, in terms of new defaults and cures. Nat Otis – KBW: All right, great. Thank you.

Next we have Steve Stelmach with FBR Capital Markets. Steve Stelmach – FBR Capital Markets: Hi guys. Just a quick follow-up, can you breakdown of GAAP equity for the three operating segments, Financial Guaranty, Mortgage Insurance and Financial Services?

We don't really disclose that any more. Steve Stelmach – FBR Capital Markets: Okay. All right. Thank you.

Okay. Then we'll go next to Connor Ryan with Deutsche Bank. Connor Ryan – Deutsche Bank: Hey guys. Congratulations on a great quarter, just wanted to get a sense for, to the extent that in the future you guys do go above 25 to 1 in some of the states that it applies to, do you have a plan for how you can continue to write new business when that happens?

Yes, the. Well first of all with respect to the states that don't have that requirement, which is the majority of the states, we could continue to write business in Radian Guaranty. Amerin Guaranty is how we are looking at being able to continue writing business in the remainder of those states. So, while we continue to manage the business to try to stay below that threshold, we are doing this, taking the steps that we believe are necessary to allow us to have that flexibility if that were to happen. And there were still states where we had not been able to obtain any regulatory or statutory relief. Connor Ryan – Deutsche Bank: Okay, great. And is there a level in any of the states where say your risk to capital reached or say that things continue to worsen from here, a level where your claims paying resources would reach where the regulators would step in or is that just more of an art than a science?

It would depend on the regulators judgment more than anything else and we hope, based on the fact that the new business we're originating is of a very good quality and profitable they may be more flexible. Connor Ryan – Deutsche Bank: Okay, okay, great. And then just the last question there is to the extent a claim is not met at the Radian Guaranty subsidiary, does that trigger a default or is there a capital support agreement from the holding company?

Bob?

No, not, not per se there is a cross guaranty with Amerin Guaranty. Amerin Guaranty and Radian Guaranty have a cross guaranty, but there is no support agreement from Radian Group to Radian Guaranty.

I think it's also important though to iterate that, Radian Guaranty has adequate claims paying ability. So we're not projecting any necessity to have that kind of support. Connor Ryan – Deutsche Bank: Right, no, yeah, I understand. I'm just saying, to the extent we did go through another kind of softening of the economy. Just wanted to kind of get a sense for how that could actually play out?

We… Connor Ryan – Deutsche Bank: Thanks for your time, guys.

Sure.

Thank you. We'll move onto Scott Frost with HSBC. Scott Frost – HSBC: Hey. How are you doing? Going over the liquidity points that you are very helpful with, one of the previous questions, I just wanted to make sure that you go through the cash you have less what's to the bank, less what's for tax, less what's for the debt outstanding in 2011 with about a $90 million in shortfall and to fund this, the plan is to issue prefs or converts or access capital markets. In other words we're not expecting any operating company support, this is to be funded through asset sales or capital markets issuance or some other method. Is that, if I said that is that would that be accurate?

What we said was our goal is to reduce the 2011 liquidity needs to a manageable level. And we said we would look at various alternatives to achieve that and then Bob talked about one alternative out of many that we may look at and consider to meet the gap. And Bob also talked about a small contribution coming in from a subsidiary sale we anticipate that will net us just shy of $20 million. Scott Frost – HSBC: Okay. But other, but, okay, so other than that no other OPCO support and the alternatives are what's available to fund the shortfall, whatever they may be that's correct right?

We're not anticipating dividends from Radian Guaranty… Scott Frost – HSBC: Okay.

To the parent company at this time. Scott Frost – HSBC: And just to make sure on slide seven when you showed Financial Guaranty derivatives when you break down the change in fair value derivatives, does that represent changes in your own credit spreads or is that something else?

Partially. So, it's going to be changes in the credit spreads on the underlying collateral and the FAS 157 impact of our own credit spreads. Scott Frost – HSBC: And could you remind me what the FAS 157 impact was, I am sure you said its somewhere, but I just didn't pick it up?

We didn't break it down this quarter, but in our 10-Q you'll see the balance sheet gross and net with the underlying collateral and then offset by our credit spread. Scott Frost – HSBC: Could you just tell us what it is?

I don't have those numbers in front of me, sorry. Scott Frost – HSBC: Okay. Thank you.

Your next question is from Adarsh Mashru with Dupree Financial Group. Adarsh Mashru – Dupree Financial Group: Yes. Good morning, guys.

Good morning Adarsh. Adarsh Mashru – Dupree Financial Group: Have you made or are in the process of making any significant changes to your investment portfolio or how is it is invested given your outlook for the economy?

The portfolio has always been in very high credit quality investments. The shifts we have made over the past several quarters have been toward shorter term investments because the expectation is that we're going to pay more MI claims in the near future, as well we have shifted a lot of our municipal portfolio, our tax advantaged portfolio to taxable securities because of our loss position. So those are the shifts we've made, we don't anticipate any material shifts from here. Adarsh Mashru – Dupree Financial Group: Okay. So, would you say that the portfolio is positioned to weather say a very adverse environment like, say much higher inflation?

The portfolio is really positioned to meet the liquidity needs of the MI business and we think it's pretty well positioned. Adarsh Mashru – Dupree Financial Group: Okay. All right. Thank you.

Thank you. And next we have [Mahmud Rezo] with Brahman Capital. Mahmud Rezo – Brahman Capital: Hi guys, how are you.

Hi Mahmud. Mahmud Rezo – Brahman Capital: So, just, I wanted to understand one point, I think that Steve had asked earlier. I think the response was that you had factored in some of the rescission activity into the reserves, which was kind of the primary driver of the quarter-over-quarter improvement. Is there is it possible to quantify what that was or, what the recession assumption was relative to what it was before?

We haven't quantified that, the loss reserve estimate takes into account a variety of factors of delinquency rates, loan sizes, average claim paid, aging of defaults, rescissions going through it and we did point out rescissions are a big component currently of it, but we haven't broken down the components and what each component means to the numbers. Mahmud Rezo – Brahman Capital: Okay, fair enough. And then in the data that you guys have disclosed in your quarterly presentation, I know you anecdotally said that the rate of new delinquencies is slowing. Is there a way for an outside investor to actually demonstrate that in the numbers that you've disclosed on a quarterly basis?

I don't believe so. The delinquency rates have gone up because, there have been some new defaults and because a less loans have gone into the claim process, but you can't get that from the information we've provided. Mahmud Rezo – Brahman Capital: Okay. All right. Thank you very much.

Thank you. And our final question will come from Brian Monteleone with Barclays Capital. Brian Monteleone – Barclays Capital: Thanks. I think you guys mentioned that you might use Amerin as a good book to write new business. I think as of the end of the first quarter there was about $40 million of assets and $4 million of surplus in that entity. How would you plan to capitalize that?

Well the whole process, if we were to need Amerin the process would be several steps and one of those steps would be adequate capitalization. And there is a cross guarantee between Radian Guaranty and Amerin Guaranty. So that would come into play as well. Brian Monteleone – Barclays Capital: Do you think you could use internal resources from Radian Guaranty or would you need external resources for that given that Amerin is not owned by Radian Guaranty?

It's conceivable that we would be able to use internal resources. Brian Monteleone – Barclays Capital: Okay. And then just one other question on reserves, I think the last question I was asking about, we can't and can't see from the outside, based on the number of defaults in the average paid claims, it kind of implies there is about $6 billion of delinquent risk on the books, there is only about $2.3 billion of reserves for primary risk, which implies there is basically 60% of the defaults there is no reserve for, which looking at the same data a year ago was maybe a 40% number. We haven't really seen that kind of a shift out of any of your peers. So I wonder maybe what are you guys seeing that the peers aren't seeing and then what are you seeing that to make that change so dramatic.

I mean I think all we can do is talk to the way we do our loss reserve estimate. And we've been very consistent in the way we estimate the loss reserves. However, the rescission rate, which is a component and has always been a component of the calculation has gone up and has become a bigger part of it. So that's what happened with ours and we can't really comment on other parties. Brian Monteleone – Barclays Capital: Thanks.

And we have no further questions. Please go ahead with any closing remarks.

Well thank you all for participating. And as always if you have any follow-up questions or comments take them up with Terri Williams-Perry. Thank you.

Thank you. And ladies and gentlemen that does conclude our conference for today. Thank you for your participation and for using AT&T Executive Teleconference. You may now disconnect.