So while we have a  quicker eviction process to hopefully limit a landlords losses collecting for damages is difficult at best 

We will pay no more for loss of, or damage to that property than the proportion that the Limit of Insurance under this Coverage Part for the property bears to the Agreed Value shown for it in the Declarations.b.

My question is hypothetical, though at one point I was considering buying without much $$ down on the assumption that any penalties I took in financing would be offset by losses on not being able to jump in at the bottom of the market.

Sometimes you just have to cut your losses and move on.

Unless you have enough passive income to offset, passive losses do you no good.

The good thing is you are located in Illinois,I am guessing you dont have to pay a Franchise tax which is not dependent on Income, but a priveledge for been allowed to do businessin the State....California is an example even if you have Loss, an LLC MUST PAY $800 to the Franchise Tax board every year,for that priviledge, however the income correctly will be pass through via a K-1 to your 1040 return

Are you insured for every loss or just these??

When I am talking refinance I am talking about taking equity out after you have bought a value add deal and increased the value substantially.I am not talking about an existing property you want to tap out.Banks for refi's are being very conservative anyways now.They will only refi at maybe 70 to 80%ltv and nowhere near 90% to 100% of FMV.This is because many markets are still declining in value.The banks if they had to take back loaning close to full value would sell at a big loss.

Regional population has steadily declined, in fact Allegheny County has the highest population loss per year with the exception of the Lousiana Perishes centered around Hurricane Katrina.

Short sale means you are taking a loss.