PMI effecting short sales

[Anna Estes]

I have not seen this problem addressed in short sale discussions.
I am losing some short sales because of the Private Mortgage Insurance. The lenders refuse to discount the mortgage because the insurance company demands that the lender ask for the full market price of the property or they will not cover the loss â€" I am told. For example, if the loan value is 200k but house is worth 100k TRULY the PMI will ask for 100k or they will NOT insure or pay a claim of 100k loss to the backing investor {bank}. I don't have any spread to make a profit. Shall I stay away from properties with PMI? But, so many have it now days.
Any suggestions?