Item 1B.  Unresolved Staff Comments. Item 2.  Properties. Item 3. Legal Proceedings. We are routinely involved in a number of legal actions and proceedings.  The outcome of legal proceedings is often  uncertain. Legal proceedings could result in adverse judgments, settlements, fines, injunctions, restitutions or other relief that  could require significant expenditures or have other ef fects on our business. In accordance with applicable accounting standards  and guidance, we establish accruals for a legal proceeding only when we determine both that it is probable that a loss has been  incurred and the amount of the loss is reasonably estimable.  We accrue the amount that represents our best estimate of the  probable loss; however, if we can only determine a range of estimated losses, we accrue an amount within the range that, in our  judgment, reflects the most likely outcome, and if none of the estimates within the range is more likely , we accrue the minimum  amount of the range.  In the course of our regular review of pending legal matters, we determine whether it is reasonably possible that a  potential loss relating to a legal proceeding may have a material impact on our liquidity , results of operations or financial  condition. If we determine such a loss is reasonably possible, we disclose information relating to any such potential loss,  including an estimate or range of loss or a statement that such an estimate cannot be made. On a quarterly and annual basis, we  review relevant information with respect to legal loss contingencies and update our accruals, disclosures and estimates of  reasonably possible losses or range of losses based on such reviews.  We are often unable to estimate the possible loss or range  of loss until developments in such matters have provided suf ficient information to support an assessment of the range of  possible loss, such as quantification of a damage demand from plaintif fs, discovery from other parties and investigation of  factual allegations, rulings by the court on motions or appeals, analysis by experts, and the progress of settlement negotiations.  In addition, we generally make no disclosures for loss contingencies that are determined to be remote. For matters for which we  disclose an estimated loss, the disclosed estimate reflects the reasonably possible loss or range of loss in excess of the amount  accrued, if any. Any loss estimates are inherently subjective, based on currently available information, and are subject to management’ s  judgment and various assumptions. Due to the inherently subjective nature of these estimates and the uncertainty and  unpredictability surrounding the outcome of legal proceedings, actual results may dif fer materially from any amounts that have  been accrued. We currently have a co-location agreement with DBSI Inc. that supports data center space and services.  This agreement  expires May 30, 2015. DBSI serves as a production and disaster recovery location. We believe our existing properties are well utilized, suitable and adequate for our present circumstances. At our corporate headquarters in Philadelphia, Pennsylvania, we lease approximately 151,197 square feet of of fice  space and 1,740 square feet of data storage space under a lease that expires in  August 2017. In addition, we also lease the  following: None. •  7,314 square feet of of fice space in Ohio and South Carolina, serving as our mortgage insurance service center  (Ohio) and space for a subsidiary of fice (South Carolina). The lease for our Ohio service center expires in 2015  and the space for our South Carolina of fice is month to month; •  121,093 square feet of of fice space for our financial guaranty operations in New  York City. The lease for this  space expires in 2015. We occupy 26,538 square feet of this space and sublease 94,555 square feet; •  Approximately 500 square feet of of fice space for our mortgage insurance operations in Hong Kong.  The lease for  this space expires on January 31, 2014; and •  27,360 square feet of of fice space for our data center in Dayton, Ohio.  The lease for this space expires on March  31, 2016. 84