Posted on 07/04/2008 12:55:50 PM PDT by Diana in Wisconsin
Washington, D.C. (AHN) - There is a link between the high foreclosure rates in some states and the rash of arson incidents involving foreclosed homes, officials say.
According to fire safety officials in Nevada, Massachusetts and Ohio, the seven-decade rise in the number of mortgage defaults is connected to the spate of blazes which destroyed the empty homes.
In 2006, when the median price of a U.S. home peaked to $221,900 based on data from the National Association of Realtors, 31,000 arson cases were recorded the same year by the U.S. Fire Administration. In Ohio, fires that razed vacant units rose by 18 percent in 2006, at about the same time that one in 161 households got a foreclosure notice during the first quarter.
James Quiggle, spokesman of the Coalition Against Insurance Fraud, said profit is usually not the only motive behind the deliberate burning of foreclosed homes since the former owner becomes a suspect and the replacement cost paid by the insurance company is normally below the value of the property.
Some fires were caused by accidents like toppled candles of intruders or neighborhood kids. But two-thirds of fires in unsecured vacant buildings were done on purpose, said John Hall, research head at the National Fire Protection Association. The arson rate went down to 32 percent for empty buildings and 7 percent for occupied units.
James Wright, chief of the Nevada State Fire Marshal Division said battling empty and foreclosed homes is more perilous for firefighters because they are not aware of the conditions of the burning structures.
Treasury Secretary Henry Paulson's had earlier forecast that oil prices will continue to rise while home prices will dip further and the economic slowdown will prolong further. This bleak outlook signals to firefighters to be on red alert for more arson incidents involving foreclosed houses.
Someone had better check Tony Rezko’s pockets for matches.
The destruction of homes in foreclosure is one way to reduce the excess inventory of housing that is preventing the resale of other existing housing that is NOT in foreclosure. If not destroyed, the distressed housing is a net negative on the valuation of other existing housing. It is like preserving what are essentially repaired wrecked automobiles as compared to well-preserved used but older automobiles. The economically sensible thing is to remove these “totalled” insurance payoff vehicles from any consideration for rebuilding, parting them out instead.
Actually, more than destruction by fire, unocuppied housing is a target for house strippers, who go in and remove the copper plumbing and wiring, and extract whole windows, doors, and fixtures from the steadily more picked-over hulk. Finally, there is nothing but a shell, not in any way economical to rebuild, as the land has become much more valuable than the remaining “improvements”. Fire just gets the demolition done a little faster.
What is keeping this going is the coverage by insurance companies. Normally, insurance companies stop their coverage unilaterally if the property is unoccupied for a specified length of time, so the actual fires may take place BEFORE this specified term is up.
The vacant properties, like wrecked automobiles, may be MORE valuable as salvage, than they ever would be as “rehabilitated” housing. But so far, there is little incentive to use the salvage method of recycling housing that is in a distressed state.
Tear down the housing in one town that is in a residential decline, and use the salvage lumber to build housing in another town which has a growing economic base.
Who says there isn’t great opportunity in this country yet?
We’ve got one two doors down from us. The neighbors and I have been taking turns mowing the front lawn because the people who foreclosed on the house aren’t bothering to keep it up. It’s bone dry here and the back yard is knee high and waiting for some punk kid with a match.
When I was a fireman, it was said that being a fireman was a depression-proof job.
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