Based on results from the Mortgage Bankers Association's 2008 Servicing Operations Study and Forum (SOSF), the shoe dropped for subprime servicers in 2007. Subprime servicers had to act quickly to rethink operations -- placing more emphasis on loss mitigation and modification options, fraud detection, sophisticated predictive modeling, regulatory and media relations, and general crisis containment. As concern turned into panic toward the end of 2007, subprime servicers faced a harsh reality -- a precipitous drop in servicing financial profitability and, in certain individual cases, net servicing financial losses. Despite deteriorating servicing portfolio performance for the subprime servicers in 2007, across the board for all peer groups (including the subprime peer group) net servicing operating incomes rose from 2006 to 2007. The 2008 SOSF findings clearly reveal that subprime servicers in 2007 were in the throes of a major crisis not seen before, and from which there is no easy exit strategy.