Latest subprime trend: Burnin’ down the house
Well, why not? They’re already trashing their homes, leaving their pets behind, or just up and walking away from their mortgages and leaving behind the keys. Why not go ahead and set their financial burdens on fire?
Lesson: If you subsidize irresponsible borrowers, you will get more irresponsible behavior.
Via the LA Times:
Some folks celebrate their last home mortgage payment by setting fire to their loan agreement. Lately, some people behind on their mortgages are simply setting fire to their homes.
In what appears to be the latest symptom of the nation’s mortgage meltdown and credit crisis, insurers, law enforcement officials and state agencies nationwide report a jump in home and automobile fires in the last year believed to have been set by owners unable to pay their debts. The numbers are small, but they’re leading the insurance industry to scrutinize more closely what seem to be accidental blazes.
“We’ve seen a dramatic increase in this kind of fraud,” said Dan Bales, director of fraud investigations at Mercury Insurance. “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.”
Last week, a Sacramento-area couple were arrested on allegations that they burned their Jeep and drove their Nissan pickup into a river, then filed fraudulent insurance claims. According to investigators, the wife admitted she was trying to escape her $600 monthly car payment.
On April 1, police arrested a woman in Easley, S.C., accused of deliberately setting fire to her home just three days after the bank hung a foreclosure notice on her door. And in January, an Omaha man was arrested on suspicion of arranging to have his three-bedroom house burned down as he was facing foreclosure…
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Nah. I’m sure they expected them to be fine upstanding borrowers that would make good on bloated loans for over-priced homes that they couldn’t afford.
They can’t be too bright anyhow. Even if they got by with it and insurance paid off, the odds of them getting from the insurance what they actually still owe is slim to none. Idiots.
Most of these people in trouble probably CAN afford to get themselves. They just feel entitled to a bunch of other crap, too.
FYI, the LA Time article above is double posted (at least on my browser).
Re: this issue — total lack of personal responsibility. I wonder how many of these people actually read their loan agreements and assessed the risk?
You have got to be kidding me!? And then collect insurance settlements and ditch the rest of us with the increase premiums.
Outstanding, lets pass another bill bailing these criminals out again. Spoiled brats.
“Friendly fire!”
Michelle … was the double posting intentional for emphasis? …
I am wondering if any politician is talking about the mortgage “windfall”? It goes like this. Person buys a house for $900,000. He gets an $800,000 mortgage. The value falls to $600,000. So he is $200,000 updside on the loan. To sell, he must get a short sale agreement from the borrower. In effect he loses $100,000 and the borrower loses $200,000. Guess what he must pay income tax on the $200,000. That is a nice tax windfall for the IRS.
Can’t quite get there in my value equation to work out how having a felony record is worth wiping out a $600 per month bill? But then again, I kinda think I’m responsible for me.
I am sure they are typical bitter people is all…..sarc/off
If they would have just waited, Barack HUSSEIN Obama would get a law passed. The Government would come in and burn the house down for them.
As a firefighter I’m not looking forward to this new development.
#12 - Excellent point.
These are just a couple of widely scattered bits of anecdotal evidence.
I don’t think it will take Banacek to uncover the fraud in most of the cases.
Yes! tell me about it!
A local grocery store just mysteriously went up in smoke. The owner is from Brooklyn. (If you know what I mean).
J S Ragman
Wow … Banacek? … Shades of Cannon and Mannix erupting in the brain …
DL
I thought you’d be impressed.
ROTFLMAO … good one …
Hard to understand why someone would burn something down or try to destroy it instead of trying to sell it or turn it back to the car dealer or bank voluntarily … that would still be better than all the other things being bandied about … I’d rather take a hit on my credit rating over a voluntary repossession … doesn’t look nearly as bad as having the courts take it from you …
Ummm the same type of people that got themselves into this mess to begin with….that’s just a guess though.
Dumb people doing something more dumb. They won’t get away with it and will have much bigger problems than a foreclosure. But then again for people stupid enough to buy a house way beyond their means and/or take out an option-pay-adjustible mortgage…what can you expect. I doubt they are clever enough to pull off arson.
And allow me to explain something about homeowner’s insurance. It DOESN’T pay the “limit” or total number as per the policy. It’s not like a life insurance policy. It pays to replace or rebuild the dwelling up to that amount. And…the lender is the first loss payee. Sorry chumps, you are not going to get a dime!!!!!
Maybe they watched too many episodes of The Sopranos.
TT … could be …
Somebody that’s upside down on a car with a payment they can’t afford can walk away from a burnt car free and clear financially if they have gap insurance. The problem is that everybody else’s rates go up to cover the loss.
Actually … they had a Sopranos moment while listening to the song Burning Down the House by Talking Heads …
Well, democrats wanted the Community Reinvestment Act passed. Now, see the results. What did they expect from these types of people? Did they seriously expect that housing prices would continue to climb forever? I wonder if they knew there would be a failure sometime, and have waited patiently for it, just to step in with more government control. Only idiots in economics could have assumed success.
There is a saying, something about not throwing GOOD money after BAD. and it’s probably older than America itself.
Yet there are some who refuse to learn.
DL and TT, they call that “Italian Lightning” where I grew up.
Maybe these folks should stay behind after they set their houses on fire? Makes it easier to serve the eviction notice…
#28 On April 21st, 2008 at 5:02 pm, Roman Con said:
“DL and TT, they call that “Italian Lightning” where I grew up.”
I’d heard it referred to as the
“lightning” of two other ethnic groups, one of which is my own!
And award them this bumper sticker.
ATTN: MM COPY EDITOR
In the quoted article above, the entire article has been reposted beginning with: “…Some folks celebrate their last home mortgage payment by setting fire to their loan agreement.”
leepro … thanks for clarifying my #7 … lol
DesertLover … oops. Didn’t see your #7
leepro … no problem … just giving you a bad time …
I wonder if Bank of America is watching.
After all they love to give Loan to Illegal Aliens. Do you think someone who doesn’t have a problem breaking our laws by violating our boarders would have a problem violating the terms of their loan? Or trashing (or burning down) a house before walking away from the mortgage? I don’t.
CrazyFool, as noted here the Bank of Illegals in America is writing off $2 billion in bad loans. Not to worry, the shareholders are probably pleased. I’m sure they make it up on volume…
Problem fixed. Did you appreciate the big “Thank you” from MM staff? I know I did…
leepro … someone other than Michelle must have fixed it … she usually says thanks to those pointing out link and posted information problems …
Worse.
You’ll get a neighborhood with responsible people stuck in a downward spiral of their property values and standard of living as houses become vacant, burned, trashed and inhabited by squatters. Then they cannot escape with the time and equity they put into their houses in tact.
Why not? Washington is about as corrupt as any African potentate government, as is evident by the support of the three main presidential candidates for illegal migration, so why should they have all the fun? What’s sauce for the goose is sauce for the gander. With all the chamberpot immigration, corruption is becoming the norm of our culture.
April 17, 2008—Mexicans pay nearly 8 percent of their annual family income in bribes, according to a poll released yesterday by the Mexican anti-corruption group.
My youngest brother lives in a very upscale neighborhood in West Sacramento and tells me how his area is turning into a ghost town. He was lucky getting into his house at $350K with it increasing up to $900K before the bubble burst. Fortunately he did not use it as an ATM and is able to live well within his means with a fixed rate mortgage. He has shared with me how desperate people are getting due to making poor choices.
Having stared the beast in the eye back in 2001 I have empathy for those at their wits end in financial troubles however I have absolutely no sympathy for insurance fraud. After I retired from the USAF in 2000 we tried to stay in Colorado Springs and was lucky enough to find employment with a semi-conductor company as a Production Supervisor. In July 2001 I was laid off as part of a severe down turn in the Technical Sector. Seeing the layoff coming I shined up the resume and applied for several civil service jobs with the USAF, which but for the grace of God I was offered a job in Idaho in time to earn my first paycheck 2 weeks before we ran out of any and all savings.
During the time of uncertainty my wife and I being raised and trained by our parents and USAF service to be self reliant and responsible for our actions and financial decisions we determined we would do the appropriate thing and return a vehicle to the bank along with vacating our first home and placing our remaining possessions in storage until we could find employment and some place to live to rebuild our lives. One reason we try to live within our means to this day instead of living irresponsibly and taking the cowards or crooks way out when the check comes due.
Sorry about the long winded post, but a little history on why I have no sympathy for the greedy criminal lenders and borrowers that can not take the responsibility for their poor decisions.
Boomer - Never apologize for getting it exactly right.
I really wish High Schools had a required course for real-life finances (yes some still wouldn’t learn becuase they’re geared that way but I think most would benefit). I also wish greedy* lenders would be jailed with no hope of probation or parole.
*Greedy Lender - an ethics-impaired individual who doesn’t care about the client’s interest and ability to payback a loan or mortgage as much as making the sale and the comission.
Sign of the times…”someone will take care of me…it’s not my fault”"
Lets look on the brightside, it cant be all negative…. Its an employment program for out of work Arsonists!
And as a bonus the government can claim a win for the number of new jobs created due the extra law enforcement and firefighters that will need to be hired now.
Boomer, my dad was in the USAF all his life. He was a comptroller and, after retirement, state budget director. We kids learned, early on, the importance of money, spending, and keeping a budget. I’ve tried to pass that on to my kids. For many people, it’s instant gratification that counts…not the concern of paying it back. That’s why I shake my head at people racking up huge credit card bills; all to get more than they can afford. It’s the same with housing. Buying something you know you can’t afford is destructive, but, these days, people see a “right” to have government bail them out, each and everytime. Then, start the insanity all over again. For a long time, being late in debt, earned you a cell in jail. Now, it’s a “slap on the wrist” with a signature on a court paper, and the ability to forget those you owe. To me, it’s a legal way to “steal”.
Oh dear, I certainly hope these people aren’t using gasoline to start these nefarious blazes! Do they realize that a gallon of gas is pushing $4/gallon?! Imagine the effect this will have on the futures markets!
Didn’t the towns folks do something like this in the final episode of Little House on the Prairie?
Fred
You stole my line!
I guess if they can’t have it know one can!
One family down the road from me has had TWO house fires in 5 years. They’re under investigation. Another house two doors down from me has had a fire and as I understand it, the insurance company is REALLY putting it under scrutiny.
I just hope there’s no neighborhood firebug running around.