Foreclosures are at record levels. Arsons in foreclosed properties grab headlines. Are foreclosures in fact igniting a firestorm of arson across the nation?

A year ago fire safety organizations and insurance companies warned that desperate homeowners and business owners facing foreclosure would be burning their property to collect insurance money and avoid the stigma of foreclosure. Were they right?

Apparently not. The facts don’t support the fears even though it’s increasingly popular to blame the victims of foreclosure for arson as headlines across the nation spotlight fires set in foreclosed properties. This morning, for example, ABC’s Good Morning America aired “Foreclosure, Financial Woes Apparently Fueling Homeowner Arson.”

GMA opened its story with the case of Michael Marin of Arizona, who was arrested for allegedly torching his own multi-million dollar mansion, though he categorically denies the charge and has yet to have his day in court.

“He had a large balloon payment that was due. According to his assets, he was not able to make that payment,” said Phoenix Fire Captain Jeff Peabody told ABC.

On its web site, the FBI cites Christina Snyder of Russellville, Indiana who allegedly approached her neighbor and propositioned her with a $5,000 payoff if she would help burn down her house, while making it look like an attempted rape and arson. The neighbor declined and reported Snyder to the police. The claim would have paid out $80,000.

Certainly foreclosure-caused arson exists and there are headlines to prove it, but the truth is that nationally and also in the leading foreclosure markets, incidents of reported arson are actually declining as foreclosures boom. Even in Detroit, a tinderbox for arsonists long before the foreclosure plague arrived, arson cases are down.

Nationally, reported arsons fell 6.7 percent from 2006 to 2007 and another 3.6 percent last year, according to the FBI. According to the US Fire Administration, there were 2.000 fewer incidents than in 2007, fewer than any year during the past decade.

At a local level, data is hard to find but there’s no evidence of a boom in arsons, much less a foreclosure-caused boom:

• In Los Angeles, a city at the center of the foreclosure crisis, arson cases fell eight percent from 2007 to 2008. Residential arsons fell even more, from 276 to 153, or 44 percent, according to the Los Angeles Police Department.
• In Detroit, where years ago Halloween became an excuse for vandals to torch hundreds of abandoned properties, arson is also down. This foreclosure-devastated city saw arson cases decline 11.8 percent during the first six months of this year even as Michigan was hit with 60,000 new foreclosures, ranking it seventh nationally. From 2007 to 2008, Detroit’s arson rate also fell 2.1 percent, according to the Michigan State Police.
• In Florida, generally ranked second or third among foreclosure-plagued states, the state department of law enforcement reports that the number of arson arrests has declined steadily over the past two years, from 473 in 2006 to 440 in 2007 and 380 in 2008, a 20 percent drop in two years.
• Las Vegas, foreclosure capital of the West, saw its arson cases fall from 334 in 2007 to 319 last year, a four percent drop. Phoenix, another major foreclosure market, also saw arsons fall slightly last year, from 487 to 473, three percent.

Though the linkage between foreclosures and arson may not be as strong as portrayed in the media, the threat of arson is very real and insurance fraud remains one of the top forms of white collar crime. Arson cost the economy $900 million in insured property and killed 295 civilians nationwide in 2007, according to the US Fire Administration.

An Insurance Research Council study found that 14 percent of arson suspects are motivated by a desire to defraud an insurance company, but other studies find the percentage is higher. According to the FBI, the “arson for profit” problem is not just limited to homeowners. They say real-estate investors have also resorted to committing arson to avoid foreclosure.

Will arson continue to decline in the face of rising foreclosures? Or are we experiencing calm before the storm? With little relief in sight over the next few months for beleaguered homeowners facing resetting ARMs and job losses, we may soon find out.