Remember back in 2003 when California residents lost 2,000 homes to wildfires. The update is that some of those charred homes were burned by owners wanting to evade their mortgage payments, relying on insurances to make everything good again. Setting fire to your mortgage agreement has been a tradition after the home has been paid off. But now borrowers are not waiting until the pay off. The latest symptom of the housing and credit crisis is insurance companies, law enforcement agencies, and state agencies report a jump in home and vehicle fires in the past year set by owners who can no longer pay their debts. So far, the numbers are low, but insurance companies are scrutinizing more closely, what they see as routine blazes.

Dan Bales, director of fraud investigations at Mercury Insurance says, “We’ve seen a dramatic increase in this kind of fraud. People upside down in their house with variable interest rate loans, or upside down on their cars, are pretty quick to burn their property right now.”

Some examples: An Easley, S.C. woman was arrested after she deliberately set fire to her home just a few days after the bank put a foreclosure notice on her door. An Omaha, Neb. man went to jail after he was charged with making arrangements to have his three bedroom home burned down to get out of losing it to the bank. A Sacramento, CA area couple was arrested after they burned their Jeep then drove their Nissan into the river subsequently filing fraudulent insurance claims. The wife confessed they were trying to get out of their $600.00 a month car payments.

In Ohio, the number of fraudulent car fires was up 150 percent from 2005 to 2007, to 245 cases last year.

The fires are keeping fraud investigators such as Anne Luce occupied. “I’m busier now than a one-armed paper hanger,” said Luce, who works on auto cases for Bristol West Insurance’s special-investigations unit. “What is happening is terrifically economically driven.”

This frightening trend is not only accomplished by homeowners who are struggling over all in this credit crunch. As with most national crises, others are trying to make a buck from the failing housing market. Desperate homeowners facing foreclosure can find folks who, for a fee, take their vehicles to Mexico where they are dissembled for parts and sold. One of the top ways insurance fraud investigators look for is if all the expensive household appliances and electronics were taken from the home before it was burned.

Just when you think, you’ve heard about all the desperate ways borrowers are finding to save them from foreclosure, here comes another one. But this new game has a price tag of its own – arson is a felony and can get these homeowners several years in prison.

One would think these people would ask themselves, “Is it really worth it?”

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