Blaming the Obama administration’s unforced errors on housing policy* on Bush holdover Ed DeMarco wouldn’t be entirely right, since Treasury has had pretty wide latitude to act without Congress and they haven’t. But in the case of principal reduction, it really is a Bush holdover messing things up. There have been some questions about whether Obama can replace DeMarco, and Adam Levitin explains that he can, via Dylan Matthews:
The FHFA statute provides that the FHFA Director is only removable “for cause”. 12 U.S. Code sec. 4512. That sort of provision usually means that the President can only remove the officer for malfeasance or misconduct, not just a policy disagreement. (See In re Humphrey’s Executor.).
DeMarco, however, is an Acting Director…This means he can be removed at any time simply by the Presidential appointment of a Director. That would require Senate confirmation (not happening before 2013 under political realities and the ridiculous Strom Thurmond rule) or a recess appointment (possible). Given the way Obama has interpreted the recess appointment power for the CFPB Director and NLRB appointments earlier this year, the ability to do a recess appointment means he can replace DeMarco pretty much whenever he wants.
*Since the Obama administration has erred on the side of not being aggressive enough with banks, and the Republican Party’s position is that the Administration has been too hard on the banks, there is no option to improve housing policy by electing Republicans.