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Sometimes connecting those dots comes out with a distorted picture. Fannie & Freddie have actually been arguing against PMI for loans over 80% loan to value for quite some time. This policy results in more "risk" for the Fannie & Freddie portfolio and less $$ for PMI companies... certainly a point for debate.
It's really the exact opposite of what you you stated. Many 1st time buyers are priced out of the market because they can't afford the initial escrow for PMI and the increased monthly payments that will carry forward until that loan is below the 80% LTV ratio. If you look at how your mortgage pmts. are applied heavily towards the interest you realize that most will be paying PMI for a long portion of their mortgage term. Interestingly, the trend in many Gov't sponsored mortgage programs, the MA Soft 2nd Program for example, has been towards "self insured" mortgages rather than requiring PMI. When you say it was Fannie/Freddie's mission to put people into homes they couldn't afford you're ignoring the fact that most mortgage programs "require" debt ratio's in that 33% range. This is where the "stupidy/greed" factor comes into play where people were qualified based on an ARM and where they made some big mistakes in actually buying these loans and in turn selling as mortgage backed securities. It ain't as simple as most people think when you're trying to point fingers at who is at fault.
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