Need help with Wachovia (World Savings) Pick a Payment loan

[Mike]

Hi there I need help/information about dealing with Wachovia (formerly World Savings) on a California Pick a Payment (neg am) loan. The loan was a refi, beginning balance about 650k current balance about 720k with just making minimum payments. Have never been late so far and the min payment is about to adjust up again. The home value is now maybe 500k. I would like to stay in this home but cant afford this bad loan and cant get into a new one anywhere at decent rates. has there been any successful reports of anyone getting a principal reduction when modifying their Wachovia/World Savings loan? I would need a $200k+ principal reduction - any chance in hell? If I could get the principal reduced to 500k I could probably afford the fully amortized 30yr fixed payment. Alternatively, could I do a short sale to a family member for current fair market value? Any reports of Wachovia allowing this? Also - anyone have any contact #s when calling the lender? Lastly - is there any risk in calling the lender and starting the hardship process? My loan docs allow me to go up to about 850k max neg amortization - could they recast the loan and demand much higher payments if I alert them now about the low home value and my inability to pay much longer? THANKS!!