I think you answered you're own question... that repo with such a large balance will probably be a deal breaker. Most enders will be worried about the chance of you being sued and a lien placed on the home.
I also have a repo with a charged off balance from 2007 and was told by more then one lender that I would need to get it taken care of.
From my understanding, I think you have to have a formal payment arrangement and have made payments for six months in order for that to be considered. I may be wrong and someone with more knowledge or advice may chime in.
I was in the exact same situation as you. Scared and confused and just didn't know what to do. I called the OC since my account had not gone into collections and they were very much willing to work out a payment plan on a settlement for me. I originally had a 10,000 CO that they are letting me settle for 3,000, so you never know until you ask.
What I would be worried about with you're CO is are you still at risk for being sued over it? Do you know the SOL for you're state?
Sorry to say, but I think buying a house may have to wait. If I were you, I would work on getting this issue resolved any way that you can. The last thing that you want is a judgment placed against you if you're looking to buy a home in the near future.