New York Attorney General Eric Schneiderman applauded President Obama for the potential nomination of Congressman Mel Watt, D-N.C., as the permanent head of the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac.

However, Schneiderman called on Obama to take immediate action to replace acting director Ed DeMarco with a new acting director who will allow principal reduction relief for struggling homeowners.

“As I have consistently said, the FHFA’s refusal to allow principal write-downs that would result in more loan modifications is a direct impediment to our economic recovery and stands in way of our efforts to provide much needed assistance to homeowners in New York and across the country,” Schneiderman said.

He added, “This nomination is a good first step, but struggling homeowners cannot afford to wait for the Senate to complete the confirmation process. The President should use his legal authority to replace Edward DeMarco with a new acting director who will start the effort to put FHFA on the side of working families immediately.”