A new audit released this week by the Federal Housing Finance Agency’s official watchdog found that Fannie Mae and Freddie Mac suffered $158 million of “financial harm” due to excessively priced lender-placed or “force-placed” insurance policies in 2012 alone. The FHFA-OIG audit notes that several state financial regulators found that the LPI rates in their states were excessive. The excessive costs were driven up by “profit-sharing arrangements under which servicers were paid to steer business to LPI providers. Such arrangements often took the form of commission structures and reinsurance deals,” according to the OIG.