Fannie Mae said Tuesday that its chairman and chief executive officer, James A. Johnson, will step aside Jan. 1, and it named U.S. budget director Franklin D. Raines to succeed him.

The changing of the guard at the company that dominates the secondary market for mortgage loans, took financial markets by surprise and temporarily sent Fannie Mae's stock sharply lower in what some analysts described as a reaction to unexpected news. Shares closed at $61.875, up 12.5 cents.

Limited Time Offer

Save $400 off your subscription. Special offer ends April 30, 2017.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.