With a growing number of both mortgage originators and MBS issuers crumbling amid subprime market distress, loan servicers are seeing very little new volume come their way.

The lack of new issues has caused servicers to shift both manpower and business focus to loss mitigation strategies from traditional loan maintenance. This downsizing includes outsourcing responsibilities, according to participants at the Securities Industry and Financial Markets Association conference on MBS due diligence held in New York last week.

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