Ladies and gentlemen, thank you for standing by. Welcome to Radian’s fourth quarter 2010 earnings call. At this time, all participant lines are in a listen-only mode. Later, there will be an opportunity for your questions. (Operator instructions) As a reminder, today’s conference call is being recorded. And I now would like to turn the conference to Emily Riley, the Vice President of Financial Communications. Please go ahead.

Thank you and welcome to Radian’s fourth quarter 2010 conference call. Our press release, which contains Radian’s financial results for the quarter, was issued earlier today and is posted to the Investors section of our website at www.radian.biz. During today’s call, you will hear 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 Bazemore, President of Radian Guaranty; Dave Fiedler, President of Radian Asset Assurance; and Scott Theobald, Executive Vice President and Chief Risk Officer of Radian Guaranty. Before we begin, I would like to remind you that comments made during this call will include forward-looking statements. These statements are based on current expectations, estimates, projections and assumptions that are subject to risks and uncertainties, which may cause actual results to differ materially. For discussion of these risks, please review the cautionary statements regarding forward-looking statements included in our earnings release and the risk factors included in our third quarter 2010 Form 10-Q. This is also available on our website. Now I would like to turn the call over to S.A.

Thank you and thank you all for joining us. Throughout 2010 I have emphasized several priorities critical to Radian’s success, as well as the ongoing challenge of our uncertain operating environment. Today, I will take a few minutes to review the progress we have made against our priorities in 2010, then highlight our financial performance in the quarter and provide insight into a few industry trends. After my comments, Bob will cover the details of our financial position, then we will open the call for your questions. Before we discuss against our priorities, it is important to note that despite the steady decline in our mortgage insurance delinquencies and (inaudible) stabilization and financial guaranty credit trends, we at Radian continue to be disappointed with the pace of recovery for the economy and the resulting impact on our business. While there have been several reports over the past week citing acceleration in the US economy at the close of 2010, the year did not bring the improvement to the unemployment rate or the momentum to the housing markets that we had all hoped for. It is encouraging that the latest statistics for economic growth are considered to be sustainable instead of temporary fixes from the government stimulation efforts. Yet, despite the so called surge in the economy, the unemployment rate is not expected to improve significantly in the near term. Although, we declared victory on the recession a year ago, there has been little reason to celebrate. However, there are clearly positive developments and successes to look back on in 2010. Let’s take a few minutes to review our priorities and progress during the year. First, the risk to capital ratio for Radian Guaranty was 16.8 to 1 on December 31, 2010, among the lowest in the industry. This compares to…

Thank you, S.A and good morning. I’ll be updating you on the P&L activity in terms for the fourth quarter 2010 and financial position as of year-end 2010. Our MI provision for losses was $426 million this quarter, slowly improving, but still at a significantly higher level and what is needed for the MI segment to return to operating profitability. We believe that a key future driver for our return to profitability will be a further reduction in new delinquency beyond what occurred in 2010. While we do expect new delinquencies to decline during 2011 and beyond based on the expected pace of these improvements, we don’t believe that the MI operations will be profitable in 2011. There were no material changes to the components of our loss reserve estimate during the quarter. The severity of poor insurance claim had increased significantly through the first three quarters, there is only a slight incremental increase in the fourth quarter. While our overall loss reserves remained relatively flat during the quarter; full insurance reserves went up due in part to an increase in the number of pull delinquencies while primary reserves went down mainly due to a decrease in the number of primary delinquencies. The dollar amount of loss awarded on submitted claims related to denials and recessions for the fourth quarter of 2010 was approximately $267 million compared to $256 million in the third quarter of 2010. Claims paid in the fourth quarter $392 million, excluding the significant coverage from captive insurance termination. We expect claims paid in the first quarter of 2011 to be approximately $400 million and for the year 2011, we believe that claims paid will increase to the $1.7 billion range. We have assumed in our projection that a recent decline in claims received is due to…

Thank you. Our first question will come from the line of Steve Stelmach from FBR Capital Markets. Please go ahead. Steve Stelmach – FBR Capital Markets: Hi, good morning.

Good morning. Steve Stelmach – FBR Capital Markets: : :

There is nothing changed in the trend that we saw in the fourth quarter. So similar trend, delinquency is down slightly and obviously we will update that at the end of the quarter. Steve Stelmach – FBR Capital Markets: Okay. All right. And then, maybe to Teresa, can you give us a little context around what regulators need to consider especially when it comes to Congressional (inaudible)? And then you saw Senator (inaudible) comments recently about the end support of mortgage insurance being a (inaudible) language, does that gain a lot of traction with the regulators, is that something that may be considered?

Well, S.A in his comments referenced the fact that we have spent some time on the Hill very recently and one of the discussion points is around oversight and it is clear that members of congress and their staff are very focused on concerns around where regulator are going with this and whether it’s sort of staying in the context of what Congressional intent was. And as you recall, in the actually Dodd-Frank Bill, one of the things that regulators were supposed to take into account was taking a look at mortgage insurance and how that should potentially play into that definition. And in fact, the industry has provided information to all of the agencies that are participating in the rule making showing that if you look at historically that loans with MI perform better than loans without MI. And on top of that, the cure rate has been better, given all of the efforts that we’ve been making as an industry to try to help people stay at their home. So there seems to be quite a lot of focus on that. I think that’s why it’s very uncertain when the initial rule will be published because this seems to be big issue of discussion along with the issue around whether there should be service standards in the rule when it comes out.

: Steve Stelmach – FBR Capital Markets: Great. That’s very helpful guys. And as one point of clarification, Bob, on slide 11, gross portfolio losses down quarter over quarter, that is a function of higher paids, or is that actually an execution for your loan losses going forward than you previously thought? That $7 billion number.

: Steve Stelmach – FBR Capital Markets: Got it. Understood. Perfect. Thanks, Bob.

Sure.

Next we go to the line of Douglas Harter from Credit Suisse. Please go ahead. Douglas Harter – Credit Suisse: Thanks. I was wondering if you could talk about the aging of your defaults? And when do you think that the 12 plus payments miss might sort of peak out?

: Douglas Harter – Credit Suisse: Thanks. And then just one clarification on the hold to go cash that you referenced was $640, so that includes all sort of expected expenditures through 2011 you said?

That’s right. And there is really two that stand out and we’ve highlighted them in the past, one is the $160 million principal maturing and the other being the inter-company tax obligations. So that $640 million is net of those expected payments. Douglas Harter – Credit Suisse: Great. Thank you.

Sure.

And next we go to the line of Mike Grondahl with Northland Capital Markets. Please go ahead. Mike Grondahl – Northland Capital Markets: Yes, guys. Just a couple of questions, but generally, do you envision a time during 2011 when overall declining delinquencies really kind of mean something and lead to a decline in the provision, I mean is that something – when do you think that point occurs?

Mike, I think we saw a significant decline in the new delinquencies, we do think that is going to continue. When exactly, you’ve got your seasonal first quarter, but over time, we expect them to decline forgetting about the seasonality and that would lead to a lower provision and an improvement in the results. We also said we expect to piece of [ph] slower than expected has been – that’s why we said 2011, we don’t expect to be profitably on an MI operating basis ’11, but we do expect the improving trend to continue. Mike Grondahl – Northland Capital Markets: Okay. And in terms of the paid claims, $392 million, there was mentioned a captive termination benefit of $323 million, so net cash out the door, am I correct in understanding that’s about $69 million or $70 million, or do you have to pay for that termination benefit?

The reported paid claims is net of that number, but what basically happened is there was cash sitting in a trust that was on the balance sheet of a recoverable, that recoverable essentially got paid through us all at once and it’s accounted for as a claim recovery. So we have cash in lieu of that recoverable, but nothing really changed, this is shift in balance sheet. Mike Grondahl – Northland Capital Markets: Okay. But is it fair then to say that the cash out the door to you net was about $70 million?

Yes, that’s right. It’s $60 million, whatever we reported. Mike Grondahl – Northland Capital Markets: Got it. And then lastly, maybe for S.A, S.A, you mentioned this, I think it’s $82 million acquisition of this financial guaranty shelf, what type of options do you think you have, does that make your financial guaranty business somehow add some optionality to it or opportunities, could you help us understand that a little bit?

Yes, I will try, although we in our press release made most of the points. As I said in my comments, at this point, it’s very premature to comment in detail but all I can say is our priorities with respect to our financial guaranty business remain unchanged in that our priorities in the financial guaranty business is to thoroughly and rigorously survey our exposure to attractively mitigate exposure as appropriate and to look for opportunities to reduce our exposure. And this we see on an exploratory basis as potentially providing us with greater flexibility and perhaps more opportunities (inaudible) to manage the reduction of our exposure in our – our financial guaranty exposure and therefore, release more capital to support our MI business. So that is unchanged. This could provide us with more alternatives along the lines of what articulated in the press release. Operator And next we go to the line of Mike Grasher from Piper Jaffray. Please go ahead. Mike Grasher – Piper Jaffray: Thanks very much. Bob, just a couple of questions here, on the financial guaranty business, I think you do show a slide in terms of the run-off on the CDO business, what about the rest of the business? Do you have an amortization schedule for the entire portfolio?

We provided on the corporate CDOs because that’s such a substantial portion of the structured (inaudible). I think it’s status in the structured business is shorter, similar life to the CDO, but you also have the trust, we have a slide on trust that shows the maturities there. And obviously the muni business is much, much longer. So there is really a division between the structured and municipal. Mike Grasher – Piper Jaffray: Yes. And is there an amortization schedule on the munis?

We don’t publish that, but I – it is a much longer period, I would say 20 years or so.

It’s longer scale business.

Sure.

We clearly have amortization schedules, we don’t disclose that information. I think the average line is 16 years or 17 years. Mike Grasher – Piper Jaffray: Okay. Thanks. And then, S&P came out with a proposed revisions to their bond insurance rating, is that of any concern at all given that you are in run-off mode?

Dave can answer this.

We are very well aware of S&P’s new rules. They are more conservative than the existing ones. We are evaluating the impact on Radian Assets portfolio. Currently, I don’t think there will be a significant impact given the Radian Assets’ current rating flow. Mike Grasher – Piper Jaffray: Okay. Thank you.

Next we go to the line of Nat Otis from KBW. Please go ahead. Nat Otis – KBW: Good morning. Just a couple of quick questions, anyway you could give a little of your general expectations going forward on cure rates kind of in light of maybe some competitor commentary of being more concerned on how curious we are going forward?

: Nat Otis – KBW: Well, seasonally – I mean, certainly January as we pointed out before is one of the tougher, if not toughest, months, but after that, wouldn’t you expect seasonal cure rates to improve from there, is that something you factor in or not?

We have no reason to believe the cures rates will improve during the first quarter. Nat Otis – KBW: Fair enough. And then second, just if you could give a little commentary, you talked about how the foreclosure moratoriums might have impacted delinquency, can you give a little bit more color on how that affects you thinking kind of year over year 2011 to 2010?

: Nat Otis – KBW: Okay. That makes sense. Then how quickly if in your thought process there was – ultimately with the moratoriums ending, there might be a pick-up for some brief period, where – at what point in time do you think that pick-up ends? When do you think that will be already baked into the numbers you are seeing?

I think that’s really hard to predict because it’s been a focus on so many different things, it’s going to focus on whether or not there – how much of a backlog there is, where those defaults are, how backlog, the courts are – if their judicial state, (inaudible) trying to have more mediation, really know that to have an effect on the timing. But as you recalled, probably know there is a 50 state sort of AG [ph] look into some of the foreclosure issues and there has been a lot of pressure AGs to do or focus more on potential modification. So there is so many factors that it’s very difficult to have any prediction around timeframes. Nat Otis – KBW: Fair enough. Thank you. Operator And next we have question from Donna Halverstadt from Goldmansachs. Please go ahead. Donna Halverstadt – Goldmansachs: Good morning. My main questions were asked. I do have one detail I wanted to follow up on. Can you quantify for us what your expected inter-company tax obligation is for 2011, as well as for 2012 if you have it?

There is no expectation for 2012 and the current expected obligation net, so it – there is ins and outs. But the net is in the $55 million range. Donna Halverstadt – Goldmansachs: Thank you.

You are welcome. Operator And we have a question from Conor Ryan with Deutsche Bank. Please ahead. Conor Ryan – Deutsche Bank: Hey, how are you? I was just wondering if kind of very high level you guys could possibly talk about how you feel about profitability in 2012 and the prospects are?

: : Conor Ryan – Deutsche Bank: Okay. And just one follow-up. Where do you think premium yields could shake out going forward?

I would say they are probably similar to where they are now. We don’t expect dramatic changes. The mix between borrower paid monthly and some of the single premium products if that shifts, that could change around a little bit. I think we’ve seen small declines because we are doing single premium, but generally we don’t expect them to change dramatically.

: :

And then the other thing you are seeing and you are going to see it after this quarter because we had large captive terminations that we are going to be ceding less premiums to captive and that’s going to help our premium earned line, of course, the losses won’t be recovered either, but just on premium, it’ll better help the premium yield.

Another factor that could affect premium rates going forward is the shape of the housing finance industry as on outcome of what – at what level government guarantees [ph] taken down from the current level of 80% to 70%, then maybe an opportunity to write MI business, but perhaps at reduced premium rates. So there is several unknowns there. Conor Ryan – Deutsche Bank: Okay. Thanks, guys. Operator Next we have a question from the line of Jasper Burch with Macquarie. Please go ahead. Matt Howlett – Macquarie: Hey, guys. It is Matt Howlett. Bob, I think just on, again, the return to profitability forecast, I mean, what can we assume for (inaudible) 2011? It sounds as if it’s not going to change right from 93% average you had in 2010, is that sort of you say?

Bob?

: : Matt Howlett – Macquarie: Okay. In order to get to profitability, would you need to see like a 100 plus rating on the cure, I mean, is that sort of what you need to see, delinquencies actually go down and to paids to actually see that loss reserve go down?

Yes, I mean don’t think that there’s necessarily link or that ratio to look at, Matt. I think – we think a lot of it is going to be driven by the decline in new delinquencies.

And perhaps to some extent the shape of these delinquency buckets we have because as we said before, many of our peers keep reminding everyone the later stage buckets attracts more reserves than the earlier stage buckets. Matt Howlett – Macquarie: (inaudible) the net profitability in the first lien booking, you increased that by $400 million, yet you talked the average reserve per delinquency up on the first lien book, I mean, how do you explain that?

The embedded value numbers didn’t change materially. We are always adjusting based on what we think the latest forecast is, but they didn’t change dramatically. I think that the increase in our reserve for delinquency is related to the components of our reserving estimates, the already recession estimate, sizeable loan. And so, it wouldn’t necessarily be linked. We do have on slide 14 the performance by vintage, so you can kind of follow where the various vintages are going in terms of profitability. And I think you will see from the third quarter or fourth quarter that there has been some improvement in the digit which kind of supports the burn out, our theory even on the worse (inaudible). Matt Howlett – Macquarie: :

Well, it would run through the P&L if it was reversed just like it ran through the P&L when we put it up and that’s going to be dependent on our analysis. We are going to have to see, as we said, we are going to have to see a period of sustained profitability and/or more visibility in terms of the certainty around our future projections, but it would run through the P&L. Matt Howlett – Macquarie: So, it could happen all in one quarter – effectively (inaudible)

Conceivably, there is no formula for it, but it is conceivable. Matt Howlett – Macquarie: Great. Thanks, guys. Operator Next is the line of Sam Martini with Omega. Please go ahead. Sam Martini – Omega: Hey, guys, good morning. You mentioned that financial guaranty business is poised to be able to make a dividend through the mortgage insurance business during 2011, can you confirm that that would be sufficient under reasonable scenarios to ensure that you will not be needing to raise additional capital during 2011 or the foreseeable future? Thanks.

I mean that dividend wouldn’t impact the need for capital, capital is already accounted, but it would be a liquidity improvement for Radian Guaranty. With our strong risk to capital position and our significant liquidity at the holding company, we believe we are in a good position subject to the uncertainty that still exists, but we believe we are in a strong position capital wise. Sam Martini – Omega: If you were to need to raise capital, would you envision that it would be due to strong business demand?

The family hope that the gain of share back from the FHA as well as potentially was a – many scenarios, the spectrum scenarios possible from the outcome of Washington decisions. We hope that there are certain outcomes that increase the opportunity to write the MI business across a larger LTV scale and we are writing more business than we anticipated and it’s good business like the business you’ve seen from the chart Bob referred in terms of the recent book which is profitable. We would love to have that as a driver of the need for more capital for right reasons, but absent that and absent other – Sam Martini – Omega: I guess put differently, you feel good about not needing a defensive capital raise, the capital raise, you would anticipate to be offensive if at all?

Based on our projections and our current view, we believe we have adequate capital, but we continue to live in a uncertain environment, but we hope the way things clear are actually closer to our projection. Sam Martini – Omega: : :

The mortgage market is down in January. Sam Martini – Omega: :

It’s – Sam, very hard to calculate share on a month to month basis.

As a general rule, we see the share numbers on essentially a quarterly basis, and while we continue to get additional data that will give us more clarity around that. And it is a Bob point, the overall mortgage market is down. We would hope that we will continue to see an increase in MI penetration, but in terms of share, right now, we don’t have any reason to think that has (inaudible).

And Sam, while we do talk about our market share, our actual focus is less on the share number per se and more on continuing to look at opportunities to write as much good profitable business we can and that remains our focus in terms of looking to find ways to serve existing customers better, finding opportunities to add new customers, and continue the momentum that we’ve created in the last couple of years, perhaps being one of the few players coming out of the down cycle that has had an immense momentum in adding new customers. Sam Martini – Omega: Thanks, guys. Good luck.

Thanks. Operator We have a follow-up from Mike Grasher with Piper Jaffray. Please go ahead. Mike Grasher – Piper Jaffray: Thanks very much. Just a couple of quick follow-ups. Bob, first of all, can you share with us some of the assumptions that maybe went into or behind the $1.7 billion in paids?

Yes. It’s an expectation that a lot of the later stages will come through. We did qualify because in the claims received recently has come down and we are expecting – in that $1.7 billion is an expectation that that will come back up again and some of the delays will be cleared. So if they are not, it could be lower than $1.7 billion. So I guess the expectation is that more claims come in during 2011 and we certainly a lot of late stage defaults that that could very well decline. Mike Grasher – Piper Jaffray: I mean, are you kind of – it’s simple as taking a percentage of the current late stage defaults, a heavy percentage of those?

Yes, that’s where it comes from the claims group that looks at the late stage and what typically comes through each month and each quarter, and again, it is a more normalized projection as opposed to what we’ve seen recently which is a decline in claims received, that’s not consistent with the $1.7 billion. Mike Grasher – Piper Jaffray: Okay. And then as a quick follow-up around, you mentioned the private modification programs, I missed your comment, were you suggesting there has been an acceleration or greater acceptance by banks to provide a program on the private modification front?

: : :

: Mike Grasher – Piper Jaffray: Okay. And so you don’t see that slowing anytime soon?

: : : Mike Grasher – Piper Jaffray: Okay. Thank you for clarifying.

And our last question will come from the line of Mike Grondahl with Northland Capital Markets. Please go ahead. Mike Grondahl – Northland Capital Markets: Yes. Just two follow-ups. Teresa, the first one is for you. I think you mentioned that the master policy allows you to reduce claim payment or amount if a servicer kind of has negligence, have you ever done that and sort of how frequently do you do that? And secondly, if S.A. or Bob could comment, just directionally on your confidence in that net projected premium excess of a $1.5 billion, which is a little marginally higher than $1.3 billion last year. Do you have more confidence in that number a year later or would say less confidence? Thank you.

I would first, I guess say that given sort of the issues we are seeing with some of the claims that have been coming through with respect to underwriting errors, we really haven’t had the focus quite as much on servicing issues, although we have been very focused on auditing servicers and looking at servicer practices to make sure that they are handling claims appropriately. I can’t give you any sort of view into claims that may have been or what number of claims may have been adjusted on that basis. It’s just that with respect to, particularly the foreclosure moratorium where it’s sort of linked to practices of the servicers is certainly an option that would be open to us.

And my concerns of the confidence in the future – I think we have to say it’s slightly less, because part of that certainty is near term, and the near term is still uncertain. So we have confidence, but on a comparative basis, it’s slightly less. Operator And ladies and gentlemen, thank you. I will now turn the conference back over to S.A. Ibrahim for any closing remarks.

I would like to thank all of you for having participated in our call. And with that, we will see you next quarter.