With as many as two million or more homeowners reportedly at risk of foreclosure because of soaring interest rates under subprime adjustable mortgages, will a significant number of policyholders resort to arson to free themselves of their financial liabilities? That's the critical question facing homeowners insurers and their special investigation units as anecdotal evidence begins to emerge that some might indeed be desperate enough to torch their houses to relieve their credit burden.
For example, after a recent fire devoured most of a two-story home in a Pennsylvania urban area, investigators didn't take long to find what they think might be the cause–a subprime mortgage.
David Rioux, the vice president and manager of corporate security and investigative services at Erie Insurance, said the case provided anecdotal evidence that some financially strapped homeowners with subprime mortgages might become desperate enough to commit arson for profit.
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