Can we refinance to avoid foreclosure?

So, here's what has happened. My fiance filed chapter 7 3 years ago. His attorney dropped the ball on reaffirming his mortgage. We just found this out yesterday. Of course, we are going to be having a metting with her to see what can be done, but what we know thus far is that 1) if we default, the home will be foreclosed on and he'll have to wait 3 years to purchase again, even though it's already been discharged and 2) even if we sell it, as we were planning to do, it'll still look like a "foreclosure" because if the title transfers anywhere to anyone else, it's considered foreclosure and we will STILL have to wait 3 years to purchase a home. I'm thinking with the new rates, a refinance may be our best option and will not look like foreclosure. Please help!