A growing chorus of voices across the country is calling for President Obama to replace the acting director of Federal Housing Finance Agency (FHFA), Edward J. DeMarco. DeMarco, a holdover from the Bush administration, is responsible for overseeing Fannie Mae and Freddie Mac. President Obama’s nominee to replace DeMarco was blocked by Republicans in 2010.

DeMarco has prohibited Fannie and Freddie from providing responsible homeowners who are struggling to keep up with their mortgages with access to principal reductions. He has even refused to allow them to participate in the Obama administration’s principal reduction program (HAMP PRA) despite FHFA analysis showing that participating in the program could save $3.6 billion for Fannie Mae and Freddie Mac and $1 billion for the taxpayers.

Reducing the principal amount outstanding for underwater mortgages is the most effective way to prevent foreclosures, stabilize housing prices and get our economy working again. By refusing to allow Fannie Mae and Freddie Mac to provide principal reduction, DeMarco has denied relief to as many as half a million struggling homeowners.

Grassroots activists have led the fight against DeMarco. Earlier this week, five protesters chanting, "DeMarco is kicking me out of my home! Principal reduction now! Dump DeMarco now!" were arrested at a congressional hearing featuring DeMarco.

They are not alone in their demand to replace DeMarco. Their message is being taken up in official quarters as well.

Last week, nine state attorneys general called on the president and Senate leaders to “expeditiously appoint and approve new, permanent leadership to the [FHFA].” The letter stated:

“We have seen firsthand the positive impact of mortgage modifications, often including principal write-downs, on our housing market, economy and communities….Unfortunately, under the leadership of Acting FHFA Director Edward DeMarco, Fannie Mae and Freddie Mac remain an obstacle to progress by refusing to adopt policies that will help maximize relief for homeowners. In particular, FHFA's refusal to adjust its policies to allow for principal forgiveness and forbearance stands as a major impediment to addressing the foreclosure crisis….

Fannie Mae and Freddie Mac should be among our partners in this effort and leaders in the arena of loan modification best practices. Instead, they have been an obstruction. We believe that until new, permanent leadership is named to FHFA, they will continue to stand as a roadblock to comprehensively addressing the foreclosure crisis.

Earlier this year, members of Congress also wrote to the president urging him to replace DeMarco.

AFL-CIO Executive Vice President Arlene Holt Baker said, “More homes are needlessly lost to foreclosure every day that DeMarco remains at the helm. We join our communities’ calls for principal reduction for struggling homeowners and an end to Republican obstructionism.”