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I heard last year about SUV owners who were upside down in their car loans resorting to arson due to high gasoline prices. Out of desperation, car owners torch (or pay $300 to a professional arsonist for the service) to collect the insurance money. There is a great quote from the article:

At the root of the problem: People pay too much for a vehicle they really can’t afford…

Jennifer Mieth, manager of fire data and public education at the Massachusetts State Fire Marshall’s Office, said car fires are “cyclical.” She added, “When times are good, fires are down. When they are bad they go up.”

…Rowe is not the only one who has seen an increase in SUV fires. Arson investigators in San Diego County saw vehicle arson go up 34 percent between 1998 and 2002, prompting analysts to surmise that more people facing economic hardship may be setting fires to their cars to escape high payments.

The sub prime mortgage crisis has similar roots. I recently posted that you should watch out for homeowners in your P2P loans due to the desperate means home owners may use to pay the mortgage in order to save the house.

It seems that some home owners are willing to resort to arson to extract themselves from their mortgage:

A recent report by the industry-funded Coalition Against Insurance Fraud notes that with “untold thousands of homeowners struggling with ballooning subprime mortgage payments, fraud fighters are watching closely for a spike in arsons by desperate homeowners who can no longer afford their home payments.”

History indicates such a spike is coming. “When the economy is down, we see an increase in fraud,” says Dennis Schulkins, a claim consultant in State Farm’s Special Investigative Unit.

Allstate spokesman Mike Siemienas says his company has seen an increase nationally in arsons among homes in foreclosure. In California, the state’s insurance division reports that the number of questionable residential fires in 2007 increased 76 percent over 2006.

National arson statistics for 2007 aren’t yet available, but Federal Bureau of Investigation crime data shows there was a significant uptick - 4 percent - in suburban arson in 2006, when the real estate downturn began to take hold.

If some homeowners are willing to resorting to arson to save their finances, I imagine that they would not be afraid to take our a P2P loan that they cannot afford, so as I select my Prosper loans I will be looking for renters.