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Radian Guaranty Inc. Eliminates 'Stated Income' and 'Stated Asset' Programs

PHILADELPHIA, March 27 /PRNewswire/ -- Radian Guaranty Inc., the primary mortgage insurance subsidiary of Radian Group Inc. (NYSE: RDN), announced today that mortgages originated under "stated income" and "stated asset" programs will no longer be eligible for mortgage insurance. In a message to clients this week, Radian commented, "while certain forms of alternative documentation used to verify assets and income are appropriate with a disciplined underwriting process, the stated programs will no longer be insurable as a result of poor performance." This change will take effect on April 30, 2008 for all new mortgage insurance applications.

As announced earlier this month, revisions to existing underwriting guidelines and pricing policies will take effect on March 31, 2008. These significant changes represent a variety of adjustments to loan-to-value, documentation and FICO requirements, and are part of an on going process at Radian to respond quickly to market conditions. In addition to guideline changes, updated declining markets territories have also been posted to the Radian website.

"These changes reflect the current market conditions and a commitment to our business partners and shareholders to write new business that will allow homebuyers appropriate and affordable alternatives," commented Dave Applegate, President of Radian Guaranty. "The continued weakness in the housing market and overall economy has created unprecedented challenges for the industry and our clients. It is critical that we act quickly to assist our clients in producing high quality, profitable business. Accordingly, we have tightened guidelines and increased pricing in areas in which we continue to see deterioration in our risk adjusted returns."

For more details on current Radian guidelines, visit

All statements made in this news release that address events or developments that we expect or anticipate may occur in the future are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the U.S. Private Securities Litigation Reform Act of 1995. These statements, which include projections regarding revenues and losses as well as other statements regarding our future financial condition, are made on the basis of management's current views and assumptions with respect to future events. These forward-looking statements, as well as our prospects as a whole, are subject to risks and uncertainties, including the following: changes in general financial and political conditions such as extended national or regional economic recessions (or expansions), changes in housing demand or mortgage originations, changes in housing values, population trends and changes in household formation patterns, changes in unemployment rates, changes or volatility in interest rates, consumer confidence, or credit spreads; future credit market disruptions -- in particular, further deterioration in the housing, mortgage and related credit markets, which would negatively impact our future consolidated results of operations and, if more severe than our current predictions, could cause our ultimate projected losses on our existing mortgage insurance portfolio to be inaccurate; adverse changes in the liquidity in the capital markets and the contraction of credit markets; changes in investor perception of the strength of private mortgage insurers or financial guaranty providers; risks faced by the businesses, municipalities or pools of assets covered by our insurance; the loss of a customer with whom we have a concentration of our insurance in force or the influence of large customers; increased severity or frequency of losses associated with certain of our products that are riskier than traditional mortgage insurance and financial guaranty insurance policies; material changes in the persistency rates of our mortgage insurance policies; losses associated with the aging of our mortgage insurance portfolio; ratings actions with respect to our credit ratings or the insurance financial-strength ratings assigned by the major ratings agencies to our operating subsidiaries -- in particular, our ratings that are currently under review for possible downgrade by Moody's; heightened competition from other insurance providers, from federal and state governmental or quasi-governmental entities such as the FHA and from alternative products to private mortgage insurance and financial guaranty insurance; changes in the charters or business practices of Fannie Mae and Freddie Mac; the application of federal or state consumer, lending, insurance and other applicable laws and regulations, or changes in these laws and regulations or the way they are interpreted; the possibility that we may fail to estimate accurately the likelihood, magnitude and timing of losses in connection with establishing loss reserves for our mortgage insurance or financial guaranty businesses or to estimate accurately the fair value amounts of derivative financial guaranty contracts in determining gains and losses on these contracts; changes in accounting guidance from the SEC or the Financial Accounting Standards Board regarding income recognition and the treatment of loss reserves in the mortgage insurance or financial guaranty industries; vulnerability to the performance of our strategic investments; proceeds we may receive from a sale of our interests in C-BASS or the assets of C-BASS or in connection with the exercise of the outstanding option to purchase our remaining interests in Sherman; legal and other limitations on the amount of dividends that we may receive from our insurance subsidiaries; international expansion of our mortgage insurance and financial guaranty businesses into new markets and risks associated with our international business activities. For more information regarding these risks and uncertainties, as well as certain additional risks that we face, investors should refer to the risk factors detailed in Part I, Item 1A of our annual report on Form 10-K for the year ended December 31, 2006. We caution you not to place undue reliance on these forward-looking statements, which are current only as of the date of this news release. We do not intend to, and disclaim any duty or obligation to, update or revise any forward-looking statements made in this news release to reflect new information, future events or for any other reason.


For Investors: Terri Williams-Perry - phone: 215 231.1486


For the Media: Rick Gillespie - phone: 215 231.1061


Steve Frankel / Tim Lynch

Joele Frank, Wilkinson Brimmer Katcher

212 355.4449

SOURCE Radian Guaranty Inc.
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