I think I may already have written a bit on a similar South African reaction to mortgage defaults, sheriff sales and forced evictions in low-income black townships during the crucial early 1990s' period: social arson. It was the organised burning of empty houses by community groups (civics), who authorised the arson of a foreclosed house (just prior to reoccupation) as a warning to bankers and municipal/police officials: don't foreclose/evict again. It worked in many cases, although one result was a decade-long period of redlining against the black townships. In his book Township Politics (MR Press, 1996), Mzwanele Mayekiso describes this phenomenon as part of the broader social struggle for autonomy from capitalist penetration of township space.
On May 7, our Centre for Civil Society (http://www.ukzn.ac.za/ccs) will be offering a skypecast at around 7:30am EST, featuring a discussion with Danny Schechter, whose excellent film In Debt We Trust, covers reactions to the US consumer credit crunch. You can join us (dial me at patricksouthafrica on skype).
Cheers, Patrick
Dennis Claxton wrote:
> Everyone has a little secret he keeps
> I light the fires while the city sleeps
>
> (MC 900 FT Jesus)
>
>
> <http://www.latimes.com/news/printedition/front/la-fi-arson21apr21,1,2323937.story>http://www.latimes.com/news/printedition/front/la-fi-arson21apr21,1,2323937.story
> From the Los Angeles Times
>
> Arson to avoid foreclosure?
>
> By Ken Bensinger
> Los Angeles Times Staff Writer
>
> April 21, 2008
>
> 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.
>
> The fires are keeping fraud investigators such as Anne Luce occupied.
>
> "I'm busier now than a one-armed paper hanger," said Luce, who works
> on auto cases for the special investigations unit at Bristol West
> Insurance, part of Farmers Insurance Group. "What is happening is
> terrifically economically driven."
>
> These financially motivated fires are surprising some officials
> because they come after a decade-long decline in overall arson rates
> nationwide. Few state or federal agencies categorize arson in terms
> of the financial status of liens on the property, making nationwide
> figures elusive. Still, pockets of the country are showing a
> significant increase.
>
> Insurers referred 14 cases of questionable home fires, with
> foreclosure as a possible factor, to the California Department of
> Insurance last year, up from seven in 2006 and two in 2005. In the
> same three-year period, reports of auto arson increased by a third,
> to 343 cases last year. On Friday, the Department of Insurance
> announced the arrests of seven people in two investigations of
> possible automobile arson and insurance fraud.
>
> In Ohio, the total number of reported "auto owner give-ups" --
> insurance jargon for fraudulent car fires and staged car thefts --
> rose 150% from 2005 to 2007, to 245 cases last year.
>
> Insurers say they're meeting this month with California investigators
> to discuss potential fraud during last fall's wildfires -- including
> the prospect that some of the 2,000 burned homes were in fact cases
> of opportune arson by owners. State Insurance Commissioner Steve
> Poizner acknowledged that his agency was investigating a number of
> such cases but would not provide further details.
>
> One recent fire of note was set in September in Gaines Township,
> Mich., by Sheryl Christman, who hoped to use the insurance money to
> get out of a troubled marriage, not to mention a house that was four
> days from being seized by the bank.
>
> The 38-year-old mother ignited a mattress in the garage of her
> two-bedroom home, for which she had paid $150,000 in 2006, then sat
> outside as the house burned. She was ultimately arrested, convicted
> and sentenced to 1,000 hours of community service and five years of
> probation. In interviews afterward, Christman called her actions
> "rash and stupid" and said she was "very ashamed." The gutted house
> was eventually sold for $40,000.
>
> Arson of all kinds has been on the decline for years. According to
> the FBI, total cases of arson fell 9.7% in the first six months of
> 2007 compared with the same period in 2006, and U.S. Fire
> Administration statistics show that arson declined by 60% from 1997 to 2007.
>
> In the current economic environment, the temptation to commit arson
> can be too much for some. There were 2.2 million foreclosures last
> year, up 75% from the previous year, according to RealtyTrac. In
> addition, a study by Moody's Economy.com and Equifax found that 4.5%
> of all mortgages were delinquent in the first quarter of 2008. Auto
> loan delinquencies hit a 10-year high in January.
>
> Frank Scafidi of the National Insurance Crime Bureau, a membership
> organization that tracks insurance fraud, says his group has not
> identified a rise in financially motivated arson. "Everything we've
> found does not support that," he said.
>
> But some observers say state authorities and insurance companies play
> down the issue -- perhaps out of fear of copycat crimes.
>
> "The sub-prime crisis began to hit in late 2006. There's been an
> increasing number of cases since then," said James Quiggle of the
> nonprofit Coalition Against Insurance Fraud, adding that he has about
> 20 such cases currently on file. "Will it explode as more mortgages
> are reset? That's the question."
>
> Insurance companies are usually obligated under state law to report
> suspicious claims from customers.
>
> "We can prove the property burned, but to prove it's fraud is tough,"
> said Bales of Mercury Insurance, adding that last year the company
> investigated 64 suspicious car fires or thefts. In 15 of those cases,
> the owner was behind on payments. Burning a vehicle negates the
> chance of recovery, making for a total loss.
>
> In the San Joaquin Valley, home to the nation's highest foreclosure
> rate in March, auto arson has more than doubled in the last three
> years. San Joaquin County Assistant Dist. Atty. J.C. Weydert said he
> was working on more than 15 such cases. He estimated that half
> included a financial component. Two cases involved leased vehicles in
> which the owner had exceeded the mileage allowance and faced a hefty penalty.
>
> Weydert said his office recently assigned a third person to work on
> insurance fraud.
>
> "The honest fact is that there are more cases than resources to
> handle them," he said.
>
> Indebted owners sometimes seek help. Last year, the Fresno County
> district attorney filed charges against 12 people accused of running
> a ring that burned cars for clients; late last month a Department of
> Insurance investigation led to the arrests of three Southland
> residents who were suspected of arranging for the transport of a
> woman's Nissan Armada to Mexico, where it was disassembled and sold
> for parts. The owner was behind on payments.
>
> The more serious problem, because of the costs involved, are home
> fires. Classic signs of an owner-complicit arson include removal of
> pets and expensive electronics before the blaze. But lately,
> investigators say their first step is a call to the bank to ask about
> the status of the mortgage.
>
> Finances were seen as a possible factor in the case of Texas Supreme
> Court Judge David Medina, who had refinanced his home three times
> over five years and was served a foreclosure notice in mid-2006. Last
> June, the house burned, igniting two neighboring homes. Investigators
> discovered accelerants on the property.
>
> In January, a grand jury indicted Medina on a charge of tampering
> with evidence and his wife on charges including arson. The following
> day, however, the Harris County district attorney dismissed the case,
> citing a lack of evidence.
>
> "We are innocent. We had nothing to do with this fire," the judge
> told reporters at the time of the dismissal.
>
> In February, members of the grand jury sued to have the evidence they
> heard made public.
>
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