Is it worth keeping my mortgage? or should I just let go? Short-Sale or Forclosure......?

I have an 80/20 mortgage, 1 with Countrywide with 6.5% interest only for $430K interest will adjust in 2014 and a 2nd with 7% fixed for 30 for $120K. (2nd was not a cash out or refi). I'd like to keep my hse and finish paying the 30yrs. All I'm asking is for CW to fix my int for 30yrs. But they won't do it. And I know in 5 yrs I won't be able to refi. My house is now worth $350. I'm scared that if my interest starts to flactuate, that i'll loose my house anyways. Should I wait and gamble or should I default now (I'm still current) and hopes that CW will modify my loan and if they don't just to let it go? Had my house for 2 years. Thank you for your advices... Sometimes advices are better coming off from strangers........