When the bank charges it off it simply means it is no longer reported as a good loan on their balance sheet. You still most likely owe the money. If it was a second mortgage and the first foreclosed on you then by law the second becomes a sold out junior lien holder and they have up to 4 years to sue you. There are some exceptions and certainly you need some serious legal advice moving forward. I would be happy to talk to you to discuss your situation.
That sounds to me like it is reported correctly.It does not sound like it is being reported as outstanding debt, which could leave you non-qualifyable. It's going to be on there for like 7 years! However, you should talk to a lender to see if you can re-qualify. Sometimes in as little as 3-5 years. Call Evelyne Jamet at Vitek Mortgage. She may be able to give you a little "credit direction" as well.
Her number is 916-452-8800
Then call me when you're ready to buy!! :)