Charge off/Short Sale/Foreclosure

[Patrick Jacques]

This is a primary residence question.  Gotta take the investor hat off for a few minutes.

In August of 2011, my wife was transfered to Atlanta from Orlando, and we were forced to sell our primary residence (  We would never have been able to rent it out.  Bad deal all round )

In September of 2011 we reached an agreement to, what we were told was a "short sale".  We signed over the mortgage with a title company and Caldwell Banker and paid about $2500 over the course of the next year.  We were told the short sale would affect our credit and ability to purchase again for the next three years.

Fast forward to today, where we learn from Bank of America , "no a charge off is a foreclosure, sorry.  You will not be able to purchase again for a total of seven years, unless you have 20% down"

So ... needless to say we are pretty disappointed.  What happened here?  Can anyone clarify what a "charge off" really is, and what this means for our ability to purchase going forward?

Thank you!