A few years ago a Vice President of a GSE gave a presentation at an NRBA conference. Some of the items she had slides for were a Hollywood facade of a building. Mint condition front. NO rear or sides, just like a Hollywood movie set. Another was a large brick building, new windows, new doors, mint from the exterior. NO interior at all, totally burnt out. Both had been sold multiple times within days/weeks of each sale at ever escalating prices. Major fraud obviously. Hence the 120% and 90 day rule came out.

It would be nice if instead of assuming that all flips are fraudulent, that protections be put in place to protect all parties involved. As it is right now an investor I know sometimes waits 4-6 weeks after closing before starting rehab on a Fannie property. On other properties, he starts rehab within 24 hours of closing.