Since you have been successfully discharged in a BK 7, and you did not reaffirm the mortgage, you are no longer personally liable for the loan. However, the bank would still have to go completely through the foreclosure process in order to get the house back into its name. You could do a deed in lieu (DIL) but the bank has to actually accept your DIL and it is relatively rare for them to accept a DIL. Another viable alternative for you, especially since you do not want to put $$ into the house, is to do a short sale IF the proceeds are not enough to cover the sale.
Do you know the current market value of your home? If not, call a Realtor and get a realistic valuation.
If you are able to sell the home without going through the f/c or short sale, then you can go out and get a new mortgage right away since it has been longer than 3 years for you.
If you have to go through the f/c or short sale or DIL process, then the wait period for a new mortgage starts from the date of transfer of the deed from you back to the bank. IOW, if you were to sell and close tomorrow, then your wait period for a new mortgage would be 3 years for FHA (unless you qualify for the back to work program) and 7 years for conventional. If you have 10% to put down on conventional then the wait period is 4 years; 20% for down payment and the wait period is 2 years.
The reason you would have to wait is because of the new derog (even though the mortgage has been discharged in BK) because you have to show the disposition of the property since your BK.
That is why it is completely in your best interest to sell if on the open market if you can - without a short sale or DIL or f/c. Because then there is no new derog and you can show the property sold directly from you to a new buyer and the loan was paid in full in a regular closing. Yes, mortgage companies check your last deed routinely. It is part of the mortgage process.
BTW, properties are sold every day without being fixed up. It affects market value.
