Families Facing Foreclosure Burn Homes

In a little talked about offshoot to the rising mortgage crisis, some people that are facing foreclosure are choosing to burn down their own homes rather than have them foreclosed upon by their mortgage company. Some of these families mistakenly believe that their homeowners insurance will still pay off the mortgage and that will relieve them of their debt obligation. However, there is another group of people that are choosing to burn their own homes down simply to prevent the bank or eventually someone else from occupying the home. I have seen this activity before back in the 1970's when huge numbers of farmers were being foreclosed upon and some would choose to destroy property and machinery, rather than have the bank take it back from them.

There are similarity between the farm crisis of the 1970's and the mortgage loan crisis of today. Both events started with banks and other financial institutions loaning money to unqualified borrowers only to see those bad lending decision result in high numbers of foreclosures. Also, there is a high amount of emotion involved when a bank makes the decision to foreclose either on a farmer or a homeowner. While everyone involve understands that a home or farm belongs to the bank until the loan is paid off, there are deep personal emotions involved when an outside entity decides to foreclose on a property or a farm.

When it comes to a farm, there are deep emotional ties to the property and the land involved because that land and property are seen as the only financial lifeline to the farmers family. That same type of emotional response is also felt by homeowners toward their house. While the logical side of the brain tells people that their home or farm is not really theirs until the loan is paid off, the emotional side of the brain does the complete opposite. In addition to some people burning their homes instead of allowing them to be foreclosed upon, most likely there is also a rising suicide rate among homeowners facing foreclosure.

Back in the 1970's there were large numbers of farmers that could not face the ultimate humiliation of having their farm foreclosed upon and chose the path of suicide rather than to live in disgrace within their small communities. As the current mortgage crisis continues to grow across the United States, the next step after this current trend of some people burning down their homes in order to prevent foreclosure will be a sharp jump in the rate of suicides, especially in small town America. There is a great deal of pride that goes along with owning your own business and/or owning your own home.

As a strong twist, the very people that run the real estate market create many of these problems without even realizing it. All people that have a home and are making mortgage payments are told the minute they walk into that new house that they are a homeowner. In reality they are not a homeowner until that mortgage is paid off, but a few die-hard souls will never understand or accept that someone can come in a take their home away from them.

March 17, 2008 Archives