So here is the deal. If the loan is truly charged off - no more interest is being collected or accruing. This is really the most important part. So long as the balance isn't growing, you are in a decent place.
Here is what is going to happen. If the Statue of Limitations has fully passed, and they haven't pursued a foreclosure or judgment against you. They just have a lien against the home. They cannot pursue foreclosure. Right now, I'm going to assume you have a 1st Mortgage, and they are 2nd in line.
Whenever you pay off your first loan or attempt to refinance or sell -- you will just have to pay off there lien. They will not subordinate or release it. Right now... you just have clouded title. You can still quit claim deed the home to a relative, or family, but you cannot sell the house without paying off their lien. I'd sleep well though. As long as you keep your 1st Mortgage, and Property Taxes current, you should be fine.
With that said... there are two things you should know.
One - if I were you, I'd attempt to pursue a settlement. Right now, if that lien is completely underwater, and not partially Citi may be willing to settle the account for 5 to 10 cents on the dollar. That may be significant savings compared to what the pay off might be in 10 years.
You also have to take into account, inflation. The dollar value of a non-paid $20,000 loan from 2006, is going to be worth a whole lot less in 2025.
There is another possibility. On your security instrument, deed of trust, or mortgage recorded in public record... on the first or second page, there should be a line that says "Borrower promises to repay this loan in full before Dec 01, XXXX". A lot of title agencies will actually accept the lien as "expired" after that date and allow a sale without a payoff so long as there is not a new recording from the loan servicer. This is not completely guaranteed but is a fairly good shot.
I would honestly look into potentially getting a settlement. Especially, if it's a small mortgage. If you can settle this for a few thousand dollars, I would consider borrowing the money from family, a credit card, something if you can.