As a result you don't have to file a non-resident income tax return with the state.Living in New York City and having real estate is great because if you have a taxable loss from real estate, it can reduce your federal and state/city tax liability.

So a total federal tax bill of 19K plus state.  

It's effectively "dissolved" into the owner for federal income tax purposes. 

Why would any rational person get involved with a federal government program without being properly educated on it?

Income tax and other non-real estate related taxes can be transferred to the tax payer that owes the money, it may not be automatic, Im not sure about State, but federal tax liens there is a form and a fee (around $400) to get the them removed and its not guaranteed they will allow it to be removed.

Current federal rules state if I hold it for 10 year's then I will pay 0 federal taxes on the gain when sold. 

Four federal returns means you've got a lot going on!

However, I was just quoted to refi with my current lender:IRRL NAVY FEDERAL:30 YEAR:.5 DISCOUNT POINTS 1 ORIGINATION FEE(PAID AT CLOSING $31,510)RATE: 3%MONTLY: $1829.763.375 &(NO DISCOUNT ORIGINATION FEE)RATE: 3.375MONTLY: $1918.69 VA CASHOUT STANDARD3.375%With this new loan, I would be positive in cashflow (about $800/month for a $2800 rent) if I opt for a non-discounted rate. 

But @Mat O'Grady mentioned some great banks, the only two I would add that I have HELOCs with are Nutmeg Federal Credit Union (Meghan in central branch I believe) and FINEX Credit Union out of EH. 

On paper, federal rule requires a short sale to be reviewed and decisioned within 30 days of submission of a complete package.