Why this cartoon isn’t funny.
In October more than $50 billion in adjustable-rate home mortgages in the U.S. will be reset. A lot of those borrowers will be in for a shock as they find they can no longer afford their homes. Most will quietly refinance or just find a way to cover the higher mortgage. Some will lose their homes in foreclosure, and still others will take the desperate option of attempting to transfer their financial problem to their insurance company.
Are insurers ready for the potential increase in home arsons? Are fire investigators on alert? Since sub-prime mortgages hit the news earlier this year, we’ve put this issue on our watchlist to determine whether there’s an uptick in people torching their homes. We haven’t seen much of an increase yet, but it bears watching.
