Wachovia Corporation (WB: sentiment, chart, options) is taking another step toward unloading some of its toxic loan portfolio, according to reports this morning. A joint venture created by LandCap Partners is buying $40 million of the bank's land and construction loans, which had a book value of $75 million to $80 million.

Many of the loans were made to home developers and collateralized by 2,900 house lots, the value of which has plunged along with the decline in the housing market. Some loans were issued in California and Florida, regions which have been especially battered by the subprime fallout.

Wachovia shares are down more than 62% year-to-date, but the stock has gained more than 1% already in this morning's trading. Option traders are betting on more downside for the shares, as indicated by the stock's Schaeffer's put/call open interest ratio of 1.97. This ratio not only reveals that puts nearly double calls among near-term options, but it's also resting at an annual pessimistic peak.