Foreclosure Crisis Sparks Surge in Arson
In desperate times people resort to desperate measures. Facing foreclosure, some homeowners are setting fire to their homes for the insurance money. But they usually end up with a criminal conviction instead of cash.
Consider the following:
In South Carolina, a homeowner was charged with burning her home on the eve of foreclosure.
In Massachusetts, there’s a growing concern that foreclosure arson is becoming a problem around the state as more and more properties are abandoned.
In Colorado, a homeowner was convicted for setting his home on fire to prevent the lender from repossessing the property.
“We’ve seen a dramatic increase in this kind of fraud,” Dan Bales, the head of fraud investigations at Mercury Insurance, told the Los Angeles Times. “People upside-down on their house with variable-interest-rate loans, or upside-down on their cars, are pretty quick to burn their property right now.”
Foreclosure arson has doubled in California from 7 homes last year to 14 homes so far in 2008, according to insurance officials. These crimes are expected to rise as the economy continues to worsen.
Even after being convicted of the crime, the homeowner still has to pay off the lender — and the damage doesn’t end there. Neighbors are getting burned too, when higher premiums are passed on to them by insurance companies.
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