Broke homeowners linked to arsons

Authorities in economically stressed cities see an increase in torched houses. Is the nation's mortgage mess transforming more Americans into criminals?

Arson is nothing new in Detroit. It's a time-honored weapon of the angry, vengeful, distressed and dispossessed in a city that gets hurt harder and sooner than others, making it a perfect place to spot early evidence of stress from the real-estate meltdown.

The Detroit Fire Department can't draw a definitive link between its rising arson rate (151 arrest warrants in 2007), rising foreclosures (up more than 65% last year) and falling housing prices (the region's median house price dropped 17.3% in the past four years, to $145,173).

But Capt. Steve Varnas of the department's arson section says he sees a connection: In 2005, the city issued only 80 arrest warrants for arson -- about half the number last year. "Things were going great," Varnas says. "There were fewer desperate people in 2004 and 2005."

Across the U.S., homeowners are searching for ways to escape from mortgages they can't pay -- or don't want to. A few are turning to arson, but it's too soon to turn anecdotes into meaningful statistics. Consumer pressure and state laws require speedy settlements, which means insurance companies are quick to pay up and slower to complete complex arson investigations. Definitive answers will come later.

But the signs of trouble are there if you're looking for them:

The FBI reportsthat arson grew 4% in suburbs and 2.2% in cities from 2005 to 2006. The 2007 numbers aren't out yet.

In California, a state hit particularly hard by foreclosures, insurance companies must tell the state within 60 days if they suspect a fire is "questionable." Last year, more than 120 reports were filed, and in 14 foreclosure was named a possible factor. The previous year, just 70 reports were filed, with seven citing foreclosure, says the state insurance commissioner's office. (Not all reports become arson cases.)

Arrest warrants for arson in Detroit rose 89% between 2005 and 2007. "We are up to our eyeballs in arsons," says Varnas, of the Detroit Fire Department. "We're not only dealing with hardened criminals. We're dealing with desperate people."

A trend -- or arson as usual?

In Stockton, Calif., where foreclosures are rampant, Deputy District Attorney J.C. Weydert is wondering whether he's looking at an arson trend or just a coincidence.

Weydert, a prosecutor with San Joaquin County's Economic Crimes/Insurance Fraud Unit, usually handles a residential arson case every two or three years. "Now I've got two in the pipeline," he says.