Can someone break it down for me why the MI company has the authority/ability to deny a short sale or demand payment from the borrower?  I don't get that part...

If they are the insurer for the bank/investor, isn't that their job to pay out on a loss? 

That would be like buying car and your lender placing their own insurance on the vehicle and charging you the premium on top of your note.  Say, you get in an accident and total the car.  How can the insurance company deny paying off your car if you have been paying the premiums every month?

What about the people who have lender placed MI?  They didn't even know it existed on their loan.

Can someone explain this MI thing to me, so I know how to negotiate? 

Thanks!