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July 25, 2008 10:30:09 PM CDT

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As Mortgages Melt Down, Owners Burn Up

Posted Apr 21, 08 12:11 PM CDT in US 

(Newser) – US homeowners are literally burning down their homes instead of paying their subprime mortgages. Last year saw a dramatic nationwide jump in apparently debt-motivated arson, the Los Angeles Times reports. “I'm busier now than a one-armed paper hanger,” said one investigator. “What is happening is terrifically economically driven.” So far, the numbers are small, but they have insurers on edge.

Insurers believe some homes destroyed in last fall’s California wildfires were actually cases of opportunistic arson. One industry group said there hasn’t been a spike, but others say that’s just posturing designed to deter copycats. “People upside-down on their house with variable-interest-rate loans … are pretty quick to burn their property right down,” said one fraud investigator.

Source Los Angeles Times

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While exact data is hard to come by, debt-motivated arson appears to be on the rise in a big way.   (Shutterstock)
Arson rates had been on a long nationwide decline - until the mortgage crisis hit.   (Shutterstock)
"The sub-prime crisis began to hit in late 2006. There's been an increasing number of cases since then," said a member of an anti-insurance fraud group. "Will it explode as more mortgages are reset?"   (Shutterstock)
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subprime mortgages  • subprime crisis  • mortgage  • California wildfires  • arson  • insurance fraud


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