Recently in President Bush's new Economic Stimulus Plan, Conforming Loan limits were increased to a little under $730,000.  

Typically, the Nation's 2 largest secondary market lenders (Freddie mac and Fannie mae) set the standards for conformed loans. That limit was just above $400,000 recently. Loans above this limit were termed "Jumbo loans". These loans were deemed with a higher risk and typically higher rates. Now, the majority of these loans will be covered with "NORMAL" standards. 

This measure is hopeful to inspire Americans to purchase more, thus stimulating our economy. I will say, if you were ever going to purchase a new home (looking for upgrades and more sq. ftg.) now would be a great time to get into a very good "Jumbo or Super Jumbo) loans.  Of course this is not the case for those hight dollar markets like L.A. and NYC.

 The apprehension is that when Jumbo loans default, they are much more difficult to sell on the REO market. This is very true. Many times lenders will take a major hit on the amount recouped. 

In fact, in the more recent months our company has had a major increase in the amount of Jumbo loans we try to obtain a viable short sale purchase.

I'm curious, to my fellow short sale processors: are your Jumbo Loan clients increasing? Do you think this program will help or is this just another attempt to save face by our current regime?  

P.S. this plan does have a term limit to the end of the Year! (2008)