If I was you, I would close as soon as possible every lender in the market right now is cutting programs, dropping LTV and doing crazy things.

Not necessarily - mortgage rates are based more on the number of applications - refi and new loans - if people are still buying we may not see a drop.

My question is how will someone be able to refi out of a hard money loan if the market values start dropping? 

With the fed drop to 0% we will undoubtedly see a change in the rate commercial and hard money lenders use.

Do you think that this virus will drop interest rates on Mortgages, making it an ideal time to refinance?

I have heard the US treasury is dropping its interest rates due to corona virus.

I just heard that the fed dropped rates to 0 what does that mean for investors?

But I don't think you should drop your offer significantly.

My guess is, if this US partial shutdown lasts for more than a few weeks and if the economy gets flattened, once the initial refi rush settles down, banks will need to fill the pipeline again and you'll see rates drop again. 

If they can start reporting the facts (get a scientist to do it who is good with the media as they are less dramatic than the news reporters and better at sticking to the facts) and the politicians act on facts (not concerns about being sued), it would help a lot and solve most of the problems (well not create a cure for the virus).