This proves one thing, if you intentially try to cheat, you deserve anything you get, but being a white collar crime, they probably won't get enough.
Many of my students ask about Flipping and I tell them, if it's a flip, you will know it, if you appraise a flip, then you deserve what you get. The problem is, a few of the appraisers will go ahead and appraise the property, knowing it's a flip. Those appraisers must be extremely careful to explain all the details of the sale and all the repairs made on the property. If not, then the appraiser deserves anything they get.
I am very careful to distinguish between legal and illegal "flips". Flipping has been a common occurance in the real estate industry for decades. Buy low, sell high. Buy fixer uppers...fix them up (sweat equity or what ever) and sell them for a profit. Not illegal!
I agree, the most important thing you said is "Fix it Up" and of course you know that, when flips occur, there is usually no fixing it up and the property sells very quickly and there is usually an agreement between the buyer and seller.
They will take the loan proceeds and split them. My main interest in other appraisers is if looks like a flip, smells like a flip, and tastes like a flip, it's probably a flip and without fixing it up, it is one to stay away from.
I agree with you also Mike. I have had about 40 - 50 assignments in the past 6-12 months of 100+ years/2 story 3-4 bedroom/ similar lot size/ similar neighborhoods ( same school district ) that some local reputable builders have been picking up cheap and completely gutting inside & out and rebuilding back to like new.