Some Chinese just want capital preservation, me I would not invest in any deal that was not at least 20% cash on cash to ME... 

Yes, that simply means the bank is enforcing their contractual right to take over “preservation” of the house, and add the costs to the mtg balance, until they foreclose.

Is it just preserved since the refinance is just on the remainder of the loan? 

A good investment would be to do what it takes to maintain your property and preserve your investment.

Those who have wealth often take less risk with their capital after they've accumulated a lot and look to preserve what they've accumulated by investing in low cap ultra safe investments.

I'm considering investing into the current AHP Fund.  However, I have been trying to contact their investor relations department and can't get through.  I waited on hold for a long time before and was eventually told ...

With the information you have gave me, I'd say the 5% down with PMI is the best option, as you get to avoid the higher interest on the 401k loan and the marginally higher interest on the cash-out refi, and you get preserve more of your liquid assets.

Might be beneficial to talk to code enforcement officers and learn about blight, property preservation requirements, and what a nuisance notice means to a homeowner.

My goals were capital preservation and cash flow.  

If I were you I would find another avenue to fund it and preserve your reputation as an honest investor.