In my experience of working on short sales, the mortgage insurance companies are difficult to deal with. The mortgage insurance usually will not waiver from a fee they are requiring. They will push everyone so they get the money they are asking for. Mortgage insurance often will ruin a sale and prevent a closing.
The seller should consider paying this fee because the seller has a lot to lose if the short sale does not close and the property forecloses. If the seller does not have all of the $4,000.00, than you will have to decide how much you can contribute. In suggestions like this, all parties should work together to find the best solution for everyone. I hope you will be able to work this out!
Prudential California Realty