You just provide rough numbers and they tell you about how much you can borrow. 

I did borrow from my 401k instead, amortized over 15 yrs so the payments are light, and only took out 30% of the max allowable loan amount.

If you want to do it after the fact, perhaps (ie after work is completed and inspected), but better to keep them separate.YES bankruptcy will affect your ability to borrow in a year or two. 

You made the property valued at $120k so during the refinance the bank says "here is $120k for you to borrow", is this correct?

Depending on the property type, status and type of borrower you are, the down payment requirements might be much higher than conventional rental property financing.2) Terms may include balloon payments and prepayment penalties.

What he is saying, is your deal with your lender was made when you borrowed the money to flip the house.

Here's what's going on  For FHA-insured mortgage loans and loans backed by Fannie Mae and Freddie Mac (collectively referred to as the GSEs), a 60-day moratorium on foreclosures and evictions effective as of March 18, 2020, and (See  source in link below)For Fannie Mae and Freddie Mac borrowers facing a hardship related to COVID-19, the expansion of forbearance and loan modification eligibility requirements and suspension of adverse credit reporting.FHA Mortgagee Letter

In simple terms, a mortgage is a loan agreement or contract with a Bank, Lender, Private Lender or Investor, wherein the borrower receives cash upfront then makes payments over a set time span until he pays back the lender in full.When a borrower is delinquent the lender agrees not to exercise its legal right to foreclose on a mortgage and the borrower agrees to a mortgage plan that will, over a certain time period, bring the borrower current on his or her payments.

I understand I may not have the same borrower protection rights as I would if the mortgage was a conventional loan, and I'm not going to have my bank put a stop or hold on the payment, I just thought it was strange.

You are going to end up having to pay more for your borrowed money which will make it even harder to cash flow.