For many real estate investors, the foreclosure market is smoking. Foreclosures nationwide are heating up, especially in once-supercharged real estate bubbles like Florida, California, Nevada and Arizona.

But in Michigan, where foreclosures are widespread and a hot market for real estate investors, people are burning down the homes to avoid foreclosure . . . literally!

Last month, a Michigan homeowner in foreclosure was arrested for allegedly setting her three-year old Grand Rapids home on fire to collect the insurance money, according to the Grand Rapids Press.

Sheryl Christman, a 38 year old housewife, torched her home just four days shy of losing  it to foreclosure. Christman was arraigned Sept. 1 on a felony arson count that is punishable by up to 20 years in prison. She was released from Kent County jail on Oct. 1 on a $20,000 cash bond.

The fire completely destroyed the home, which is valued at $150,000. Fire investigators were suspicious because the blaze roared out of control quickly.

The married mother of three allegedly planned to use the insurance settlement money to be with her boyfriend. Investigators convinced the boyfriend to wear a wire, recording a conversation between  him and Christman. Court papers claim that she admitted to setting the blaze.

Foreclosure fraud — and now arson and insurance fraud — are becoming issues in Michigan and across the country. As foreclosures continue to rise, tragic stories like the case against the Gaines Township woman may grow as well.

At RealtyTrac, we’ll keep you informed of these and other developments.