Some once-wealthy homeowners are stripping their foreclosed homes of copper and aluminum wiring.
Vandals who break into empty foreclosed homes to strip off copper and aluminum is as old a practice as looting tombs full of relics. But an unexpected twist has reared its head: now, some once-wealthy homeowners are doing the stealing themselves.
Neal Lyons, Westborough-based CEO of L&W Investigations, said his insurance fraud investigators started noticing the practice in the past year. The homeowner, either in foreclosure or close to it, will strip out everything of possible value inside: marble countertops, fine cabinetry, tiles, toilets, materials from the HV/AC units outside, as well as the copper on the pipes.
If they still technically own the house, they’ll report it as a burglary to collect insurance money. If the bank owns it by then, the bank will do the same. Either way, it leaves insurance companies holding the bag, Lyons said, and they’ve been calling in companies like his to investigate.
“It’s now at a fever,” he said, noting that usually such incidents take place in more upscale homes with valuable materials inside. One of his current cases is for a $2 million Massachusetts home, looted by its former owner.
Linda Kody, a broker and owner of North Andover’s Kody & Company, said plenty of the foreclosures she works on are for homes above the $400,000 mark. Many people “really stretched” to buy these homes, she said, and lost them when the economy turned sour.
Kody said she’s walked into a few upscale houses that have been stripped in the way Lyons described. Appliances and sinks will be missing, anything of value removed and most likely sold to help the homeowners’ cash flow.
But Kody said of about 200 homes she worked on recently, only about four or five had been looted. It happens, she said, but not commonly.
Official numbers on such cases are hard to come by: Foreclosure servicing companies such as Citi Residential Inc. and Wells Fargo Home Mortgage spokesmen said such incidents hadn’t noticeably cropped up, and police often don’t hear about this kind of activity, Lyons said.
Lyons said insurance company clients are not usually interested in arresting the suspects – they just want to avoid paying the insurance coverage. So companies like L&W often do not involve the police, he said.
A spokesman for another insurance fraud organization, the Coalition Against Insurance Fraud, said while it is common to see foreclosed homes in danger of getting stripped, he hadn’t heard much talk of the owners facilitating the stripping.
“It there’s a trend in high-end homes being looted by their owners, it hasn’t bubbled up in a public way,” he said, although he said it was possible given the current foreclosure situation. “These things take quite a bit of time to bubble up statistically.”
