Weighing in on tough PMIERs negotiations, FHFA’s Inspector General yesterday released a report highly critical of the private mortgage-insurance business and regulatory model.  Following days after a similar, critical take on MI from staff at the Federal Reserve Bank of New York, the industry is negotiating with the GSEs with one arm tied behind its collective back.  Fannie and especially Freddie have long looked for alternatives to MI.  If the GSEs could ever find any willing to take first-loss loan-level positions on HLTV mortgages and price it like the MIs, then the industry would really need to worry. 

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