Reply #19: White House poised to replace OFHEO head as early as Jan.

[UpInArms]

http://www.marketwatch.com/news/story.asp?guid=%7BBAFC47D8%2DA670%2D49B6%2DA44B%2DCD102C6CC680%7D&symbol=

WASHINGTON (MarketWatch) -- The White House is poised to replace Stephen Blumenthal as Fannie Mae's (FNM) and Freddie Mac's (FRE) top regulator as early as January, following a controversial speech last month in Hong Kong where he disputed the administration's position on cutting the companies' assets, according to several people familiar with the matter.

The White House had been actively seeking a successor to Blumenthal at the Office of Federal Housing Enterprise Oversight since former Director Armando Falcon resigned in May.

But administration officials stepped up that process in recent weeks after receiving calls from several current and former federal regulators, including officials at the Treasury Department and the Securities and Exchange Commission, who said they lost confidence in the acting director, according to government officials and other people close to the matter.

"Mr. Blumenthal is serving in the acting capacity. We will move forward (on appointing a replacement) as soon as possible, but we don't speculate on the timing or the content of those announcements," said White House spokeswoman Erin Healy, who declined to comment further.

Blumenthal, who temporarily took over OFHEO's helm in May, hit a nerve among top policymakers last month when he told a group of bond traders that arguments by the Bush administration and the Federal Reserve to shrink Fannie's and Freddie's massive portfolios weren't "terribly persuasive" and that cutting their assets could result in a "massive sell-off" of both companies' stock, government officials and others said.

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Another *Co dissenter gets canned. Why am I not surprised?