Some Homeowners Use Arson to Avoid Foreclosure

Some desperate homeowners have used arson to avoid foreclosure.

ByABC News via logo
February 11, 2008, 7:07 AM

Feb. 11, 2008 — -- Recession fears along with nationwide housing foreclosures have pushed some homeowners to take drastic and illegal measures.

Looking to cash in on their insurance rather than face foreclosure, some people have committed arson to avoid losing their homes.

Michigan authorities believe 38-year-old Sheryl Christman was one of those people, when she set her home ablaze Sept. 1. Christman was just three days short of foreclosure.

"It didn't look like a typical fire. It didn't look like something that caught on fire. It almost looked ignited," one neighbor said.

Christman, who faces up to 20 years in prison, pleaded no contest in her case and has yet to be sentenced.

"I don't know if she thought she was going to get the insurance money or what," said Tonya Miller, of Nova Star Mortgage Co. "But she won't. It will go to the mortgage company."

Christman's case isn't an isolated one. The same thing may have happened to a Woodland Park, Colo., home, where law enforcement authorities believe a man may have burned his residence to avoid an imminent foreclosure. Like Christman's case, the man's home was only a few days away from foreclosure.

"Desperate times cause decent people to do desperate things," said Joe Toscano, of the International Association of Arson Investigators.

Toscano said the desperation from the subprime lending debacle and difficult financial times may lead to more suspicious fires.

"The situation right now is like the perfect storm," he said. "One of the options is to go bankrupt. Unfortunately, another option on the part of some people is to think about selling that property back to the insurance company and that's arson for profit."

Investigators now are on the lookout and facing foreclosure is a huge red flag for insurers.

Currently, there are no statistics to indicate that more cash-strapped homeowners are burning their homes for insurance money than before.

"There are no statistics that a bleak economic condition causes a spike in arson," Toscano said. "[However,] when economic conditions are such that they are now, people do commit arson for profit."