I do believe that its called Fire mod, it was created by Zor
This is not correct, but close.
There were two firemod versions. The original, created by Zor, would attach itself to bricks and spread slowly over an indiscriminate area until the build was completely destroyed. This was available during 2008 and was later ported. It came in the form of a 'fire wand' and a 'fire hose'.
A later mod created by Halcynthis during late 2010 is the one the OP is talking about. This spread at a much quicker rate, and would 'singe' some bricks and destroy others. It would not spread to baseplates. It was much less laggy and bricks would often explode when destroyed. This mod was significantly better because builds were more realistically damaged and you could be left with a burned shell, where as Zors destroyed everything.
Hals cam with a 'bucket' and a 'match box'.
Unfortunately Hals mod is extremely hard to find, I've lost my copy. Zors firemod can be located with a quick Google.