I think the days of the frantic buying and shortening all the time periods, (which was big with the REOs) are coming to an end. Shortening time frames helped buyers look better on paper.
I don't think the loan contingency should be any longer than 17 days, that's for sure. For all parties sake. There are already enough variables in the transaction. 17 days is better for the buyer so they don't feel rushed through the process and the biggest purchase of their lives. Anything shorter is helpful for the seller because the sooner they know the better so they know they aren't wasting much time.
Shortening the loan contingency can also put everyone in a hard spot trying to meet unrealistic expectations in case there are any time delays along the way, which happen often, thus you may now end up with unhappy or worried clients.
So going into it, ask the lender how well qualified they are and how responsive are they when something is needed. This could help determine how quickly the loan process may go.
If you need a contingency period, then 17 days is fine and that is plenty. It is definitely exciting to go many fewer days as it can be a challenge to get a slower buyer to get disclosures completed, appraisal portal opened, appraisal ordered, and any issues handled that might come up that need to be negotiated.
Are you representing the buyer or seller on this one? Most often I like to ask the buyers lender how much time the Actually need, and then it is not an arbitrary number negotiated between the agents, but a more specific one.