New York Attorney General Eric Schneiderman and Massachusetts AG Martha Coakley, along with seven other state AGs, want Federal Housing Finance Agency acting director Edward DeMarco replaced. In a Politico editorial, they suggest that new leadership and a new direction for Fannie Mae and Freddie Mac could help achieve full economic recovery and aid U.S. families. In the fourth quarter of 2012, 10.4 million properties -- or 21.5 percent of all homes carrying a mortgage -- were underwater. Under DeMarco, Fannie Mae and Freddie Mac have not permitted principal reductions for underwater mortgages. He also has refused an offer by the Obama administration to pay FHFA up to 63 cents for every dollar of debt forgiven on underwater mortgages owned by Fannie and Freddie. DeMarco maintains that principal reductions would generate taxpayer losses, but Schneiderman and Coakley say the president's plan is "very sensible." They encourage him to appoint a new director at FHFA, noting, "if the administration opts to use public resources to support a policy that prevents foreclosures, stimulates the economy and creates jobs, it's not the place of an acting agency head to stand in the way."