Currently negotiating with the MI company directly.  my seller is slightly stronger than most distressed sellers, it is a job relocation out of state.  We have actually volunteered a cash contribution to get this file closed.  However, the MI company (MGIC) claims that because of the new laws in effect in 2011 for the consumers...it does not allow for any cash contributions.  I offered the contribution from the buyer, not the seller.  

If anyone with any insight on how to get around this new company guideline.  CA is a big state with a lot of short sales.  I cant imagine that all short sales with MGIC pool insurance will get denied because of our new laws.

DD