Testifying before Congress on Thursday, Fed Chairman Ben Bernanke suggested that the government work with Fannie Mae and Freddie Mac to insure jumbo loans up to $1 million. This would effectively, in terms of underwriting and pricing, make these loans very much like conforming loans. This would be a tremendous support in this market; by providing mortgage market liquidity the government would increase the pool of potential buyers, helping to restore some balance between supply and demand. In high cost markets like the San Francisco Bay area this would be a real boon. Stay tuned, and we will see if Congress can do more than bloviate, obfuscate, and procrastinate.