If you’re thinking of a reverse mortgage you’re old suitable to know the value of savings.

BlownMortgage.com has a posting which is precisely on the money. A loan officer, Chris Johnson, describes a top-rated borrower, aged 24, who earns $37,000, has a 731 credit score, lives at home and has one expense, a $176 monthly car payment.

Amazingly, that borrower has $500 in checking and some $1,800 in a retirement history.

The question is: What ever happened to savings?

The Bureau of Economic Analysis said October 31st that “personal outlays increased $129.1 billion (5.2 percent) in the third quarter, compared with an increase of $151.7 billion (6.3 percent) in the second. Personal saving — disposable personal income less personal outlays — was $86.5 billion in the third

quarter, compared with $64.4 billion in the second. The personal saving rate — saving as a percentage of disposable personal income — was 0.8 percent in the third quarter, compared with 0.6 percent in the second. Saving from current income may be near zero or negative when outlays are financed by borrowing (including borrowing financed through credit cards or home equity loans), by selling investments or other assets, or by using savings from previous periods.”

Zero savings? Negative savings? How can anyone build wealth without savings? How can foreclosures be prevented without money for a rainy day?

Johnson has a really smart analysis of current underwriting standards at BlownMortgage.com. For more, see:

Why 2011 might not even be the end

Orginal post by Peter G. Miller