Designed to preserve use of net operating losses

Radian Group has adopted a tax benefit preservation plan designed to protect stockholder value by preserving important tax assets. The Tax Benefit Plan was adopted to reduce the likelihood that Radian’s use of its net operating losses, loss carryforwards and other tax assets (NOLs) would be substantially limited under Section 382 of the Internal Revenue Code.

NOLs can generally be used to offset future taxable income and therefore reduce federal income tax obligations. However, Radian’s ability to use its NOLs may be substantially limited if there occurs an ownership change of Radian as defined under Section 382. In general, an ownership change will occur if Radian’s 5% shareholders, as defined under Section 382, collectively increase their ownership in Radian by more than 50% points over a rolling three-year period.

As part of the tax benefit plan, Radian’s board of directors declared a dividend of one preferred share purchase right (a Right) for each outstanding share of its common stock. The dividend will be payable to holders of record as of the close of business on October 19, 2009. Any shares of Radian’s common stock issued after the record date will be issued together with the Rights.

The Rights are not currently exercisable and initially will trade only with the common stock. However, if any person or group acquires 4.90% or more of the outstanding shares of Radian’s common stock, it may cause the Rights to become exercisable and would be expected to result in significant dilution in the ownership interest of such a person or group.

At its discretion, the Board may exempt certain persons and certain transactions under the Tax Benefit Plan if the Board determines that this would not jeopardize Radian’s NOLs. The Tax Benefit Plan may be terminated by the Board at any time before the Rights are triggered.

The Tax Benefit Plan is similar to plans recently adopted by many other public companies with significant NOLs and was not adopted in response to any effort to acquire control of Radian.

The Rights will expire upon the earliest of October 9, 2019. They will expire: if the time at which the Rights are redeemed or exchanged under the Plan, the final adjournment of Radian’s 2010 annual meeting of stockholders if stockholder approval of the plan has not been received before that time, the repeal of Section 382 or any successor statute, if Radian’s Board of Directors determines that the Tax Benefit Plan is no longer necessary for the preservation of its NOLs or the beginning of a taxable year of Radian to which the Board determines that no NOLs may be carried forward.

Radian Group, headquartered in Philadelphia, provides private mortgage insurance and related risk management products and services to mortgage lenders nationwide through its principal operating subsidiary, Radian Guaranty.