Mortgage insurance companies, which have been bleeding massive amounts of red ink for two years, could see their prospects brighten in a post-Fannie Mae/Freddie world, according to one proposal making the rounds in Washington.

The Financial Services Roundtable (FSR), a trade group whose members include the nation's largest banks and insurers, is actively promoting a plan to eliminate the GSEs and replace their MBS guarantees with policies written by truly private firms.

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