Faked arsons spike during foreclosure era

The Glass-Steagal act was repealed in 1999, with support by Fed. Reserve chairman Alan Greenspan, allowing banks, mortgage brokers and housing insurance companies to all join together under the same roof. This removed the previous incentive that banks and brokers had to carefully scrutinize potential borrowers for their ability to pay back a loan. Instead, brokers and banks could collude to hide and fuzz the poor qualifications of borrowers, and they would award the expensive mortgages, and then quickly resell the mortgages as bonds to third parties, allowing other investors to suffer the risk. Not surprisingly, coastal markets in California, Florida, Boston and New York, and speculative markets in Nevada and Arizona have gone crazy since these banking rules were changed.

A quick survey of news.google.com shows that arson is increasingly the answer for a variety of desperate owners who face bankruptcy. These owners can range from working class families who are way over their heads with $3000+ mortgage payments, to developers who face business bankruptcy.

A sample: http://www.kcra.com/news/15362605/detail.html?subid=10100243
SACRAMENTO, Calif. -- Across the country, fire investigators are looking at some homeowners in foreclosure as potential arsonists.

In Modesto, Battalion Chief Hugo Patino looked over a charred and nearly destroyed home -- a home that was empty and is now set for auction.

"A fire in an empty house is always cause for suspicion," Patino said.

http://www.wzzm13.com/news/news_article.aspx?storyid=88259
Grand Rapids - Calling it "a rash and stupid" mistake, a Gaines Township woman today avoided jail time for setting fire to her home while her husband and children were inside.
Christman pleaded guilty to the September arson of her home at 6825 Deercove Drive, S.E. She said in court Monday that it was going into foreclosure, and said the fire she set was "only supposed to be a little portion of the wall." She said referring to the skyrocketing foreclosure rate. She had advice for others, "Don't do what I did."

http://wdef.com/news/arson_fires_rise_in_walker_county_with_foreclosure_link/02/2008
How desperate would you have to get to burn down your own home just to avoid foreclosure?
It's an arson trend nationwide and one North Georgia fire marshal says it's happening in his county.
Twenty-two confirmed arson cases came across Waymond Westbrook's desk last year and he knows several of them were linked to foreclosures.
The Walker County fire marshal explains, "We'll just ask the people, you know, why did you do it and they'll just tell us, well here's why."
And the why turns out to be quite simple: fear of losing it all.
"A big business or big industry closes down and all of the sudden you don't have money coming in but the home loan is still here the bills are still there and you look around and "I've got to find a way out," he says.


http://news.medill.northwestern.edu/washington/news.aspx?id=79865
WASHINGTON – Some cash-strapped homeowners, facing financial ruin from foreclosure, are torching their homes and filing bogus insurance claims in frantic attempts to avoid eviction, causing fears that arson might become more frequent as woes continue.

“The warning signs for desperate homeowners are right on our doorstep,” said James Quiggle, spokesman for the Council Against Insurance Fraud. “They’re looking for any shot of quick cash to bail themselves out.”

The number of self-inflicted arson cases is small, but it’s surfacing in a handful of states, especially in those hardest hit by the subprime lending fiasco, like California, where suspect residential blazes have doubled in the last two years.


http://www.wkrg.com/news/article/home_foreclosures_and_arson/10603/
Fire departments across the Gulf Coast are braching for a possible spike in homeowner arson.

"We've seen a 400 percent increase up north involving houses that are just about to be foreclosed and people are collecting insurance on it," says State Fire Investigator Chip Curreri.

Curreri spoke to members of the Lillian Volunteer Fire Department in Baldwin County this week about the potential problem. Curreri says soaring home foreclosures could spark an arson boom.

"I think it's going to get worse, we'll probably see it down here on the Gulf Coast within the next six months," he says.

Gulf Shores Fire Marshal Keith Martin is concerned.


http://www.kmbc.com/news/15284483/detail.html
KANSAS CITY, Mo. -- This nation's housing crisis means there have been more than a million foreclosures and that appears to be pushing some people to try to cash in on insurance money.

Investigators in some parts of the country have said they're seeing cases of an owner deliberately setting a foreclosed home on fire in an effort to collect insurance.

KMBC's Maria Antonia reported that the Kansas City Fire Department started shining a light on the issue a while ago.
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"Well over a year ago as we saw the economy downturn. First they started looking at more cars, late models, that are burning under suspicious origin," said Kansas City Chief Fire Marshal Floyd Peoples.