New mortgage rules, which do not require down payments from borrowers,

OFFICIAL EXPLANATION

• SHORT ANSWER

→ Eliminate option A because insist of is not idiomatic.
→ Eliminate option B because the singular pronoun its cannot refer to the plural antecedent rules
→ Eliminate option C because they is far from its antecedent, a fact that does not really bother me until I see option (D).
such regulations in option D is better than they in option C
→ KEEP D. I see no errors.
→ Eliminate option E because although GMAC has accepted "this" as a standalone pronoun in a question in 2020, in that case, linked below, the other four options contained clear error. THat situation is not the case in this question; option D is good.

The correct answer is D

• HIGLIGHTS

-- The verb insist does not always imply a command.

In this sentence, the verb insist signals that the analysts are defending the truth of their position.
The analysts object to the new mortgage rules.
The new rules may be beneficial because they encourage lending, which is generally good for economies, but the rules may also be harmful because they do not effectively prevent default, which is bad for everyone and for economies.

I chose this question because posts about the subjunctive rarely discuss a set of verbs that can be both mandative (related to a command or triggering "command subjunctive") and non-mandative.

See my Notes, below, for a discussion of three of those verbs. To insist is one of them.

THE PROMPT


What is the point of the sentence?
The point is to highlight the fact that the analysts are harping on (insisting on) what they think is a major flaw in the new mortgage rules: the rules do not effectively prevent default.
Initially, the new rules might encourage lending, but after enough defaults, banks will pull back, alter the newly encouraged lending practices, and stop lending.

THE OPTIONS


• insist of is not idiomatic and hurts my ears. Insist on or insist that are idiomatic

• insist is often a mandative (command) verb that triggers a subjunctive construction (see Notes), but in this sentence insist acts like a "regular" (indicative) verb.
The analysts are insisting that their position is correct.
The analysts are not commanding anyone to do anything.

Depending on its meaning, insist takes different constructions, "bossy" and not bossy. See Notes, below.
Option A is wrong because insist of is unidiomatic, not because option A should be in command (mandative) subjunctive form.

• I am not worried that their is ambiguous. Why would analysts think that they had the power to prevent defaults? But I am not happy about the fact that the noun to which their refers ("rules") is far away in a long sentence.
I will treat their just as I treated they in option C; in both cases, I will look for a more specific construction.

• suppose that you were unaware that insist of were unidiomatic.
-- In that case, I would keep option A and look for a better option
-- Since GMAC rarely tests on idiom alone, and since their is slightly bothersome, let's pretend that I don't know how awful "insist of" is.
KEEP A, tentatively


• the singular pronoun its cannot refer to the plural antecedent rules


• I'm not a fan of they in this sentence.
-- Logically, the correct antecedent is rules, but analysts are kinda a contender and the logical antecedent (rules) is very far from its pronoun (they) in a long sentence.
-- In other words, this option is not very clear. It is stylistically flawed.
• Pronoun ambiguity?
-- Maybe.
-- I suppose that if you knew nothing about finance or economics (you had never held a job or learned anything about borrowing money), this "they" might seem to refer either to rules or to analysts.

Now I'm stuck with (C), too.
I do not eliminate answers on the basis of pronoun ambiguity alone unless I am in the final stages of analysis.
KEEP (It doesn't matter that I have no idea whether to choose A or C at this point. It does matter that I keep moving and not get stuck.)


• This option looks promising.
-- Option D is an improved version of C.
-- The real estate analysts do not like the mortgage rules. That fact is clearer in (D) because the pronoun in question ("they") is replaced by its antecedent, renamed ("such regulations" clearly refers to the new rules).
• such regulations is more specific and crisper than they
Eliminate C.
• KEEP (A) (remember, I am pretending that I think "insist of" is acceptable).
KEEP (D)


• THIS without a clear reference is almost always wrong. "This" is almost never a standalone pronoun.
-- Typically, GMAC requires "this" to "point" to a noun: this red chair near me, not that white couch on the other side of the room.
In jargon, "this" is a demonstrative adjective. "This" demonstrates which noun we are talking about. (In my example, that is also a demonstrative adjective.)
-- For the first time that I know of, in OG 2020, GMAC published a question in which THIS was a standalone pronoun rather than a demonstrative adjective.
-- That is, GMAC allowed THIS to refer to a situation described but not actually named by a noun.
Spoiler alert: if you click on the link, the correct answer to a new official question is revealed
You can find that official question HERE
• In that official question, the other options contained clear errors. GMAC may have signaled that it will accept "this" by itself on rare occasions, but in this question, option D contains no error and is better than E.
ELIMINATE E

Compare (A) and (D).
No contest. (D) wins. Eliminate option A.
Option D does not suffer from any pronoun fuzziness as might be the case in A.
In reality, I eliminated option A immediately because "insist of" is not idiomatic.

The answer is D.

• NOTES

The verb insist is not always a "command" verb that must be followed by a that clause and a subjunctive verb.

Above, I mentioned a set of verbs that can be both mandative (related to a command or triggering "command subjunctive) and non-mandative.

The verbs propose, suggest, and insist are probably the most common examples in this group of verbs.

See whether you can detect the pattern in each numbered couplet.

1a) Correct: The House Judiciary Committee proposed that the brother of George Floyd be the first person to testify at the congressional hearing.
Wrong: The committee proposed that the brother of George Floyd is the first person to testify at the hearing.

1b) Correct: In 1905, Einstein proposed that light is like a stream of particles (photons) rather than just a single wave, as scientists commonly believed at the time.
Wrong: Einstein proposed that light be like a stream of particles rather than just a single wave.

2a) Correct: I suggest that your brother be seen by a doctor.
Wrong: I suggest that your brother is seen by a doctor.

2b) Correct: Evidence suggests that Leif Eriksson arrived in North America 500 years before Christopher Columbus did so.
Wrong: Evidence suggests that Leif Eriksson arrive in North America 500 years before Columbus did so.

3a) Correct: The teacher insisted that the student be respectful.
Wrong: The teacher insisted that the student is respectful.

3b) Correct: The child insisted that he was telling the truth.
Wrong: The child insisted that he be telling the truth.

In order to know how these verbs should be used, we must examine meaning and context.

The first set of each couplet is a command; "insist" and the other two verbs in the first part of each couplet signal that someone wants to bring about the situation described in the that-clause.

The second sentence in each couplet is not a mandate or command: the focus is on the truth of what is said in the that-clause.

Are the real estate analysts ordering or commanding anyone to do anything?
No.
Is there any expectation that someone will or should comply with an order or a request?
No.
If the analysts in this sentence were bossing people around or expressing desire, we would create a sentence with mandative subjunctive ("command subjunctive"), this way:

BOSSY verb + THAT + subject + bare infinitive (see the (a) examples above)

Are the real estate analysts arguing for the truth of their proposition (namely, that new rules may not be so great because the rules do not effectively prevent default)?
Yes. In this case we use "insist" as we would use a "regular" verb.

As I mentioned and as I hope my examples showed, the verb insist, even when followed by a that-clause, does not always mean "to demand that something happens or that someone agrees to do something." See definition #1 from Oxford Learner's Dictionaries, here.

Insist can also mean "to say firmly that something is true, especially when other people do not believe you." See definition #2 from the same source as that above, here.

This question involves definition #2.

COMMENTS

Satishqwerty , DasAshishAshutosh , and tyildirim92 , welcome to SC Butler.

monk123 , one of my stalwarts , well done on your time!

It is really late where I am.
Be safe, everyone. Kudos to all.