Editor's Note: This is a monthly publication on economic trends and financial policy issues. In this publication you can read "The Longbrake Letter", an analysis of economic trends and conditions written by Bill Longbrake, as well as commentary on financial regulation and policy written by members of the law firm Barnett, Sivon & Natter, P.C., a Washington, DC based law firm that specializes in financial services law. The lawyers in the firm are also counsel to the international law firm, Squire Patton Boggs.

ISSUE: #78, January 2017

The Longbrake Letter
- Bill Longbrake
In this month's letter, Bill Longbrake discusses the recent surge in business, consumer and investor optimism following the election of Donald Trump as the U.S.'s 45th president and assesses the 2017 outlook. He raises the question of whether the policies of the incoming Trump Administration and the Republican-controlled Congress, combined with political and economic developments elsewhere in the world, will lead to continued slow and steady growth in the U.S., or whether growth will accelerate, or perhaps recession might occur. All are possible outcomes in coming months. Based on past experience there is a good chance that bullish expectations will not be fully realized. In addition, some of Trump's potential trade and tax reform policies could have significant and unpredictable adverse global consequences. Given the considerable uncertainty, prudence argues for being prepared to manage through any and all possible outcomes.

Great Expectations
- Bob Barnett
It is the time of presidential appointments in a transition year. There are rules and practices to the process,  the number of positions included is large, and the time needed to get through them can be longer than you think it should be.

FHFA Duty-To-Serve Rule
- Ray Natter
FHFA recently issued a final regulation that effectively mandates Fannie and Freddie to develop new and "innovative" mortgage products, using flexible underwriting standards, to provide home ownership financing for very-low, low- and moderate-income families.  These mortgages will be deemed to meet the "ability to repay" standard as long as they do not have negative amortization or balloon payment features or excessive points and fees.  Is this the beginning of another round of excesses in the housing finance sector?