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## Radian Group Inc. Notes to Consolidated Financial Statements - (Continued) 

For markets in which inputs are not observable or limited, we use significant judgment and assumptions that a typical market participant would use to evaluate the market price of an asset or liability . Given the level of judgment necessary , another market participant may derive a materially dif ferent estimate of fair value. These assets and liabilities are classified in Level III of our fair value hierarchy . For fair value measurements categorized within Level III of the fair value hierarchy , we use certain significant unobservable inputs in estimating fair value. Those inputs primarily relate to the probability of default, the expected loss upon default and our own non-performance risk as it relates to our liabilities. The following table summarizes the significant unobservable inputs used in our recurring Level III fair value measurements as of December 31, 2012: 

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