A group of House Democrats is urging President Barack Obama to nominate a permanent director for the Federal Housing Finance Agency to replace an acting chief they say is standing in the way of aid for struggling borrowers.

The 45 lawmakers led by Representative Elijah Cummings of Maryland, the top Democrat on the House Oversight and Government Reform Committee, said in a letter to Obama that FHFA Acting Director Edward J. DeMarco should be removed because of his refusal to use U.S.-owned mortgage firms to provide loan modifications including principal reduction.

"Ensuring that FHFA implements congressional directives to support the most liquid, efficient, competitive and resilient housing finance markets is a matter of national urgency," the lawmakers wrote in the letter dated today. "For these reasons, we strongly urge you to nominate an FHFA director who is ready to fulfill this mission and address the many challenges still facing the nation's housing finance markets."

The letter reflects a renewed effort by Democratic lawmakers and consumer advocates to get Obama to replace DeMarco, a career civil servant who inherited the job of overseeing Fannie Mae and Freddie Mac in 2009. Senate Republicans in 2011 blocked Obama's nominee for the post, former North Carolina banking regulator Joseph Smith.

Recess Appointment

The White House has been actively seeking potential candidates for the job in recent months. Obama may be limited in his ability to remove DeMarco without Republican support in the wake of a Jan. 25 federal court ruling that his use of a procedure known as a recess appointment to install officials at the National Labor Relations Bureau was unconstitutional.

A recess appointment enables the president to install nominees without approval when the Senate isn't in session. Republicans, who hold 45 seats in the 100-member Senate, have the ability to block consideration of appointees under rules that require 60 votes to prevent a filibuster attempt.

"With the inability to do a recess appointment, the president has few options," Jaret Seiberg, senior policy analyst at Washington Research Group, a unit of Guggenheim Securities LLC, said in an interview. "Republicans can bottle up a nominee for years which will keep DeMarco in charge."

Potential nominees for the FHA post could include administration officials such as Michael Stegman, the Treasury Department's housing adviser, or academics such as Harvard University professor Nicolas Retsinas, former director of the school's Joint Center for Housing Studies.

"I think it will be very hard to even find someone to accept a nomination," Seiberg said. "Why subject yourself to all the scrutiny when you are unlikely to get the job?"

Unresolved Debate

DeMarco took charge at FHFA when James Lockhart stepped down in 2009 amid debate over the future of Fannie Mae and Freddie Mac that remains unresolved. He could return to his previous job as deputy director if a replacement is seated.

FHFA has been shrinking the footprint of Fannie Mae and Freddie Mac, which own or guarantee about two-thirds of U.S. home loans. DeMarco's focus on preserving the finances of the companies, which have been sustained by $190 billion Treasury aid since they were seized amid soaring losses in in 2008, has angered activists who want more help for struggling borrowers.

That ire peaked in July when DeMarco declined an offer of incentive payments from Treasury for principal reductions, citing an internal study showing that cutting loan balances wouldn't help the bottom line at Washington-based Fannie Mae and Freddie Mac of McLean, Virginia.

"He can't hold this power over homeowners and our economy any more, so it's time for him to go," Tracy Van Slyke, director of the New Bottom Line, a group that has been calling for DeMarco's ouster, said today in an interview.

Denise Dunckel, an FHFA spokeswoman, said she had no comment on the letter.