Filed pursuant to Rule 433(d)

Registration Statement No. 333-130694

MORGAN STANLEY ABS CAPITAL I INC. TRUST 2007-NC1

FREE WRITING PROSPECTUS

IMPORTANT NOTICE REGARDING THE CONDITIONS FOR THIS OFFERING OF ASSET-BACKED SECURITIES

The asset-backed securities referred to in these materials are being offered when, as and if issued. In particular, you are advised that asset-backed securities, and the asset pools backing them, are subject to modification or revision (including, among other things, the possibility that one or more classes of securities may be split, combined or eliminated), at any time prior to issuance or availability of a final prospectus. As a result, you may commit to purchase securities that have characteristics that may change, and you are advised that all or a portion of the securities may not be issued that have the characteristics described in these materials. Our obligation to sell securities to you is conditioned on the securities and the underlying transaction having the characteristics described in these materials. If we determine that condition is not satisfied in any material respect, we will notify you, and neither the issuing entity nor the underwriters will have any obligation to you to deliver all or any portion of the securities which you have committed to purchase, and there will be no liability between us as a consequence of the non-delivery.

STATEMENT REGARDING THIS FREE WRITING PROSPECTUS

The depositor has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC web site at www.sec.gov. Alternatively, the depositor or the underwriters or any dealer participating in the offering will arrange to send you the prospectus if you request it by calling toll-free 1-866-718-1649.

The registration statement referred to above (including the prospectus) is incorporated in this free writing prospectus by reference and may be accessed by clicking on the following hyperlink: http://www.sec.gov/Archives/edgar/data/1030442/000090514806002120/efc6-1020_forms3a.txt.

IMPORTANT NOTICE RELATING TO AUTOMATICALLY GENERATED EMAIL DISCLAIMERS

Any legends, disclaimers or other notices that may appear at the bottom of the email communication to which this material is attached are not applicable to these materials and should be disregarded. Such legends, disclaimers or other notices have been automatically generated as a result of these materials having been sent via Bloomberg or another email system.

The information in this free writing prospectus is preliminary and subject to completion or change. The information in this free writing prospectus supersedes information contained in any prior similar free writing prospectus relating to these securities prior to the time of your commitment to purchase. This free writing prospectus is not an offer to sell or the solicitation of an offer to purchase these securities, nor will there be any sale of these securities in any jurisdiction where that offer, solicitation or sale is not permitted.

FREE WRITING PROSPECTUS

(To Prospectus dated September 21, 2006)

$1,214,379,000

Mortgage Pass-Through Certificates, Series 2007-NC1

Morgan Stanley ABS Capital I Inc. Trust 2007-NC1

Issuing Entity

Morgan Stanley ABS Capital I Inc.

Depositor

Morgan Stanley Mortgage Capital Inc.

Sponsor

Saxon Mortgage Services, Inc.

Servicer

Countrywide Home Loans Servicing LP

Servicer

The following classes of certificates are being offered pursuant to this free writing prospectus and the accompanying prospectus:

Class	Original Class Certificate Balance		Pass-Through Rate
Class A-1	$	320,559,000		Variable
Class A-2a	$	326,940,000		Variable
Class A-2b	$	101,690,000		Variable
Class A-2c	$	135,180,000		Variable
Class A-2d	$	84,385,000		Variable
Class M-1	$	50,000,000		Variable
Class M-2	$	58,125,000		Variable
Class M-3	$	19,375,000		Variable
Class M-4	$	25,000,000		Variable
Class M-5	$	23,750,000		Variable
Class M-6	$	13,750,000		Variable
Class B-1	$	20,000,000		Variable
Class B-2	$	9,375,000		Variable
Class B-3	$	15,625,000		Variable
Class B-4	$	10,625,000		Variable

You should read the section entitled “Risk Factors” starting on page 14 of this free writing prospectus and page 7 of the accompanying prospectus and consider these factors before making a decision to invest in the certificates.   The certificates represent interests in the issuing entity only and are not interests in or obligations of any other person.   Neither the certificates nor the underlying mortgage loans will be insured or guaranteed by any governmental agency or instrumentality. Assets of the Issuing Entity — •      The issuing entity is a trust whose assets consist primarily of two groups of fixed- and adjustable-rate, first-lien and second-lien mortgage loans secured by residential real properties. The certificates — •       The certificates represent beneficial interests in the assets of the issuing entity, as described in this free writing prospectus; and •      The certificates will accrue interest at a rate equal to one-month LIBOR plus a related fixed margin, subject to certain caps, as described in this free writing prospectus under “Summary—Pass-Through Rates.” Credit enhancement — •       Subordination as described in this free writing prospectus under “Description of the Certificates—Priority of Distributions Among Certificates,” •       Overcollateralization as described in this free writing prospectus under “Description of the Certificates—Overcollateralization Provisions,” and •      Excess interest as described in this free writing prospectus under “Description of the Certificates—Overcollateralization Provisions.”

Interest Rate Support —

•      An interest rate swap agreement and an interest rate cap agreement with Morgan Stanley Capital Services Inc., as interest rate swap provider and interest rate cap provider, respectively, for the benefit of the certificates as described in this free writing prospectus under “Description of the Certificates—Interest Rate Swap Agreement” and “—Interest Rate Cap Agreement.”

THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES REGULATORS HAVE NOT APPROVED OR DISAPPROVED OF THE OFFERED CERTIFICATES OR DETERMINED IF THIS FREE WRITING PROSPECTUS OR THE ACCOMPANYING PROSPECTUS ARE TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

Morgan Stanley ABS Capital I Inc. will not list the certificates on any securities exchanges or on any automated quotation system of any securities association. Each class of certificates will receive monthly distributions of interest, principal or both, commencing on February 26, 2007.

MORGAN STANLEY COUNTRYWIDE SECURITIES CORPORATION

January 18, 2007

Important notice about the information presented in this

free writing prospectus and the accompanying prospectus

We provide information to you about the certificates in two separate documents that provide more detail in progression: (1) the accompanying prospectus, which provides general information, some of which may not apply directly to your series of certificates, and (2) this free writing prospectus, which describes the specific terms of your series of certificates. If the accompanying prospectus contemplates multiple options, you should rely on the information in this free writing prospectus as to the applicable option.

You should rely only on the information contained or incorporated by reference in this free writing prospectus and the accompanying prospectus. We have not authorized anyone to provide you with different information.

We are not offering the Morgan Stanley ABS Capital I Inc. Trust 2007-NC1, Mortgage Pass-Through Certificates, Series 2007-NC1 in any state or other jurisdiction where the offer is not permitted.

For 90 days following the date of this free writing prospectus, all dealers selling certificates will deliver a free writing prospectus and prospectus. This requirement is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters of the certificates with respect to their unsold allotments or subscriptions.

We cannot sell the certificates to you unless you have been given the opportunity to receive both this free writing prospectus and the accompanying prospectus.

We include cross-references in this free writing prospectus and the accompanying prospectus to captions in these materials where you can find further information concerning a particular topic. The table of contents in this free writing prospectus and the table of contents in the prospectus provide the pages on which these captions are located.

Some of the terms used in this free writing prospectus are capitalized. These capitalized terms have specified definitions, which are included at the end of this free writing prospectus under the heading “Glossary.”

In this free writing prospectus, the terms “depositor,” “we,” “us” and “our” refer to Morgan Stanley ABS Capital I Inc.

All annexes and schedules to this free writing prospectus are a part of this free writing prospectus.

Morgan Stanley ABS Capital I Inc.’s principal offices are located at 1585 Broadway, New York, New York 10036, and its phone number is (212) 761-4000.

EUROPEAN ECONOMIC AREA

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), the underwriters have represented and agreed that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the “Relevant Implementation Date”) it has not made and will not make an offer of certificates to the public in that Relevant Member State prior to the publication of a prospectus in relation to the certificates which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that it may, with effect from and including the Relevant Implementation Date, make an offer of certificates to the public in that Relevant Member State at any time:

(a)   to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities;

(b)   to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000 and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts; or

(c)   in any other circumstances which do not require the publication by the issuer of a prospectus pursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an “offer of certificates to the public” in relation to any certificates in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the certificates to be offered so as to enable an investor to decide to purchase or subscribe the certificates, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression “Prospectus Directive” means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.

UNITED KINGDOM

Each underwriter has represented and agreed that:

(a)   (i) it is a person whose ordinary activities involve it in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of its business and (ii) it has not offered or sold and will not offer or sell the offered certificates other than to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or who it is reasonable to expect will acquire, hold, manage or dispose of investments (as principal or agent) for the purposes of their businesses where the issue of the offered certificates would otherwise constitute a contravention of Section 19 of the Financial Services and Markets Act 2000 (“FSMA”);

(b)   it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of the certificates in circumstances in which Section 21(1) of the FSMA does not apply to the issuer; and

(c)   it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the certificates in, from or otherwise involving the United Kingdom.

NOTICE TO UNITED KINGDOM INVESTORS

The distribution of this free writing prospectus if made by a person who is not an authorized person under the FSMA, is being made only to, or directed only at persons who (1) are outside the United Kingdom, or (2) have professional experience in matters relating to investments, or (3) are persons falling within Articles 49(2)(a) through (d) (“high net worth companies, unincorporated associations, etc.”) or 19 (Investment Professionals) of the Financial Services and Market Act 2000 (Financial Promotion) Order 2005 (all such persons together being referred to as the “Relevant Persons”). This free writing prospectus must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this free writing prospectus relates, including the offered certificates, is available only to Relevant Persons and will be engaged in only with Relevant Persons.

Potential investors in the United Kingdom are advised that all, or most, of the protections afforded by the United Kingdom regulatory system will not apply to an investment in the trust fund and that compensation will not be available under the United Kingdom Financial Services Compensation Scheme.

TABLE OF CONTENTS

SUMMARY

RISK FACTORS

THE MORTGAGE LOAN POOL

General

Prepayment Premiums

Adjustable Rate Mortgage Loans

The Index

Underwriting Guidelines

The Mortgage Loans in the Aggregate

The Group I Mortgage Loans

The Group II Mortgage Loans

Credit Scores

THE SPONSOR

STATIC POOL INFORMATION

THE DEPOSITOR

THE ISSUING ENTITY

THE SERVICERS

General

Countrywide Home Loans Servicing LP

Saxon Mortgage Services, Inc.

THE TRUSTEE

INTEREST RATE SWAP PROVIDER AND INTEREST RATE CAP PROVIDER

DESCRIPTION OF THE CERTIFICATES

General

Book-Entry Registration

Definitive Certificates

Assignment of the Mortgage Loans

Delivery of Mortgage Loan Documents

Representations and Warranties Relating to the Mortgage Loans

Payments on the Mortgage Loans

Distributions

Administration Fees

Priority of Distributions Among Certificates

Distributions of Interest and Principal

Allocation of Principal Payments to Class A Certificates

Swap Account

Calculation of One-Month LIBOR

Excess Reserve Fund Account

Interest Rate Swap Agreement

Interest Rate Cap Agreement

Overcollateralization Provisions

Reports to Certificateholders

THE POOLING AND SERVICING AGREEMENT

General

Subservicers

Servicing and Trustee Fees and Other Compensation and Payment of Expenses

P&I Advances and Servicing Advances

Prepayment Interest Shortfalls

Servicer Reports

Collection and Other Servicing Procedures

Hazard Insurance

Realization Upon Defaulted Mortgage Loans

Optional Purchase of Delinquent Mortgage Loans

Removal and Resignation of a Servicer

Eligibility Requirements for Trustee; Resignation and Removal of Trustee

Termination; Optional Clean-up Call

Certain Matters Regarding the Depositor, the Servicers and the Trustee

Amendment

PREPAYMENT AND YIELD CONSIDERATIONS

Structuring Assumptions

Defaults

Prepayment Considerations and Risks

Overcollateralization Provisions

Subordinated Certificates

Effect on Yields Due to Rapid Prepayments

Weighted Average Lives of the Offered Certificates

Decrement Tables

Hypothetical Available Funds and Supplemental Interest Rate Cap Table

Final Scheduled Distribution Date

FEDERAL INCOME TAX CONSIDERATIONS

General

Taxation of Regular Interests

Status of the Offered Certificates

The Basis Risk Contract Component

No Withholding on Payments Payable to Trust by Swap Provider or Cap Provider

STATE AND LOCAL TAXES

ERISA CONSIDERATIONS

LEGAL INVESTMENT

LEGAL MATTERS

REPORTS TO CERTIFICATEHOLDERS

RATINGS

GLOSSARY

ANNEX I - CERTAIN U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS

ANNEX II - INTEREST RATE SWAP SCHEDULE

ANNEX III - INTEREST RATE CAP SCHEDULE

ANNEX IV - MORTGAGE LOAN TABLES

SUMMARY

This summary highlights selected information from this free writing prospectus and does not contain all of the information that you need to consider in making your investment decision. You should read this entire free writing prospectus and the accompanying prospectus carefully to understand all of the terms of the offering of the certificates.

The Transaction Parties

Sponsor. Morgan Stanley Mortgage Capital Inc., a New York corporation with its principal executive offices at 1585 Broadway, New York, New York 10036, telephone number (212) 761-4000.

Depositor. Morgan Stanley ABS Capital I Inc., a Delaware corporation with its principal executive offices at 1585 Broadway, New York, New York 10036, telephone number (212) 761-4000.

Issuing Entity. Morgan Stanley ABS Capital I Inc. Trust 2007-NC1.

Trustee. Deutsche Bank National Trust Company, a national banking association. The corporate trust office of the trustee is located at 1761 East St. Andrew Place, Santa Ana, California 92705, Attention: Trust Administration MS07C1, and its telephone number is (714) 247-6000. The trustee will have the custodial responsibility with respect to the mortgage files for all of the mortgage loans. For a description of the trustee, see“The Trustee” in this free writing prospectus.

Servicers.

Countrywide Home Loans Servicing LP, a Texas limited partnership. The principal executive office of Countrywide Home Loans Servicing LP is located at 7105 Corporate Drive, Plano, Texas 75024 and its telephone number is (972) 526-6285.

Saxon Mortgage Services, Inc., a Texas corporation. The principal executive office of Saxon Mortgage Services, Inc. is located at 4708 Mercantile Drive, Forth Worth, Texas 76137, and its telephone number (817) 665-7200.

For further information regarding the servicers, see “The Servicers” in this free writing prospectus.

Responsible Party. NC Capital Corporation, a California corporation. The principal executive office of NC Capital Corporation is 18400 Von Karman, Suite 1000, Irvine, California 92612 and its telephone number is (949) 440-7030. For certain information regarding NC Capital Corporation see “The Mortgage Loan Pool—Underwriting Guidelines” in this free writing prospectus.

Interest Rate Swap Provider and Interest Rate Cap Provider. Morgan Stanley Capital Services Inc., a Delaware corporation. Morgan Stanley Capital Services Inc. conducts business in the over-the-counter derivatives market, engaging in a variety of derivatives products, including interest rate swaps, currency swaps, credit default swaps and interest rate options with institutional clients. The principal executive office of the interest rate swap provider and the interest rate cap provider is located at 1585 Broadway, New York, New York 10036, and its telephone number is (212) 761-4000. See“Interest Rate Swap Provider and Interest Rate Cap Provider” in this free writing prospectus.

The following diagram illustrates the various parties involved in the transaction and their functions.

The Offered Certificates

The Morgan Stanley ABS Capital I Inc. Trust 2007-NC1 will issue the Mortgage Pass-Through Certificates, Series 2007-NC1. Fifteen classes of the certificates - the Class A-1, Class A-2a, Class A-2b, Class A-2c, Class A-2d, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3 and Class B-4 certificates - are being offered to you by this free writing prospectus. The Class A-1 certificates generally represent interests in the group I mortgage loans. The Class A-2a, Class A-2b, Class A-2c and Class A-2d certificates generally represent interests in the group II mortgage loans. The Class M and Class B certificates represent interests in all of the mortgage loans.

The Other Certificates

The trust will also issue four other classes of certificates - the Class X, Class P, Class R and Class R-X certificates - which will not be offered under this free writing prospectus.

The Class X certificates will have an initial aggregate principal balance of approximately $35,628,862, which is approximately equal to the initial overcollateralization required by the pooling and servicing agreement. The Class X certificates will initially represent an interest of approximately 2.85% of the aggregate scheduled principal balance of the mortgage loans in the trust.

The Class P certificates will have an aggregate principal balance equal to $100 but will not be entitled to distributions in respect of interest. The Class P certificates will be entitled to all prepayment premiums or charges received in respect of the mortgage loans.

The certificates will represent undivided interests in the assets of the trust, which will consist primarily of the mortgage loans.

Structural Overview

The following chart illustrates generally the distribution priorities and the subordination features applicable to the offered certificates and the Class X certificates.

* Interest and principal distributions will be allocated among the Class A certificates as further described in this free writing prospectus. Losses will not be allocated to the Class A certificates until the final distribution date.

Closing Date

On or about January 26, 2007.

Cut-off Date

January 1, 2007.

Distribution Date

Distributions on the certificates will be made on the 25th day of each month, or, if the 25th day is not a business day, on the next business day, beginning in February 2007, to the holders of record on the preceding record date.

Final Scheduled Distribution Date

The final scheduled distribution date is the distribution date occurring in November 2036. See “Prepayment and Yield Considerations—Final Scheduled Distribution Date” in this free writing prospectus.

Record Date

The record date for the offered certificates will be the business day preceding the related distribution date, unless the offered certificates are issued in definitive form, in which case the record date will be the last business day of the month preceding the month in which the related distribution date occurs.

Pass-Through Rates

The Class A-1 certificates will have a pass-through rate equal to the least of (i) one-month LIBOR plus [___]% ([___]% after the first distribution date on which the optional clean-up call is exercisable), (ii) the Group I Loan Cap, as defined in the “Glossary” in this free writing prospectus, and (iii) the WAC Cap, as defined in the “Glossary” in this free writing prospectus.

The Class A-2a certificates will have a pass-through rate equal to the least of (i) one-month LIBOR plus [___]% ([___]% after the first distribution date on which the optional clean-up call is exercisable), (ii) the Group II Loan Cap, as defined in the “Glossary” in this free writing prospectus, and (iii) the WAC Cap.

The Class A-2b certificates will have a pass-through rate equal to the least of (i) one-month LIBOR plus [___]% ([___]% after the first distribution date on which the optional clean-up call is exercisable), (ii) the Group II Loan Cap, and (iii) the WAC Cap.

The Class A-2c certificates will have a pass-through rate equal to the least of (i) one-month LIBOR plus [___]% ([___]% after the first distribution date on which the optional clean-up call is exercisable), (ii) the Group II Loan Cap, and (iii) the WAC Cap.

The Class A-2d certificates will have a pass-through rate equal to the least of (i) one-month LIBOR plus [___]% ([___]% after the first distribution date on which the optional clean-up call is exercisable), (ii) the Group II Loan Cap, and (iii) the WAC Cap.

The Class M-1 certificates will have a pass-through rate equal to the lesser of (i) one-month LIBOR plus [___]% ([___]% after the first distribution date on which the optional clean-up call is exercisable) and (ii) the WAC Cap.

The Class M-2 certificates will have a pass-through rate equal to the lesser of (i) one-month LIBOR plus [___]% ([___]% after the first distribution date on which the optional clean-up call is exercisable) and (ii) the WAC Cap.

The Class M-3 certificates will have a pass-through rate equal to the lesser of (i) one-month LIBOR plus [___]% ([___]% after the first distribution date on which the optional clean-up call is exercisable) and (ii) the WAC Cap.

The Class M-4 certificates will have a pass-through rate equal to the lesser of (i) one-month LIBOR plus [___]% ([___]% after the first distribution date on which the optional clean-up call is exercisable) and (ii) the WAC Cap.

The Class M-5 certificates will have a pass-through rate equal to the lesser of (i) one-month LIBOR plus [___]% ([___]% after the first distribution date on which the optional clean-up call is exercisable) and (ii) the WAC Cap.

The Class M-6 certificates will have a pass-through rate equal to the lesser of (i) one-month LIBOR plus [___]% ([___]% after the first distribution date on which the optional clean-up call is exercisable) and (ii) the WAC Cap.

The Class B-1 certificates will have a pass-through rate equal to the lesser of (i) one-month LIBOR plus [___]% ([___]% after the first distribution date on which the optional clean-up call is exercisable) and (ii) the WAC Cap.

The Class B-2 certificates will have a pass-through rate equal to the lesser of (i) one-month LIBOR plus [___]% ([___]% after the first distribution date on which the optional clean-up call is exercisable) and (ii) the WAC Cap.

The Class B-3 certificates will have a pass-through rate equal to the lesser of (i) one-month LIBOR plus [___]% ([___]% after the first distribution date on which the optional clean-up call is exercisable) and (ii) the WAC Cap.

The Class B-4 certificates will have a pass-through rate equal to the lesser of (i) one-month LIBOR plus [___]% ([___]% after the first distribution date on which the optional clean-up call is exercisable) and (ii) the WAC Cap.

Interest will accrue on the offered certificates on the basis of a 360-day year and the actual number of days elapsed in the applicable interest accrual period. See “Description of the Certificates—Distributions of Interest and Principal”in this free writing prospectus.

Interest Accrual Period

The interest accrual period for the offered certificates for any distribution date will be the period from and including the preceding distribution date (or, in the case of the first distribution date, the closing date) through and including the day before the current distribution date.

Distribution Priorities

Distributions on the certificates are required to be made monthly on each distribution date from available funds (after giving effect to the payment of any fees and expenses of the servicers and the trustee) to the classes of certificates in the following order of priority:

(a) to an account for payment to the interest rate swap provider of certain amounts payable to the interest rate swap provider;

(b) from the portion of available funds allocable to interest payments on the mortgage loans, (i) first, to the Class A-1, Class A-2a, Class A-2b, Class A-2c and Class A-2d certificates, their accrued certificate interest for the related interest accrual period and any unpaid interest amounts from prior distribution dates, payable first from the interest payments on the mortgage loans in the applicable loan group related to those classes of certificates, and in the case of the Class A-2a, Class A-2b, Class A-2c and Class A-2d certificates, allocated pro rata based upon their respective entitlements to those amounts, and (ii) second, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3 and Class B-4 certificates, in that order, their accrued certificate interest;

(c) (1) on each distribution date prior to the Stepdown Date or on which a Trigger Event is in effect, an amount equal to the principal distribution amount (as further described in “Description of the Certificates—Distributions of Interest and Principal” in this free writing prospectus) (i) first, to the Class A certificates, pursuant to the allocation described below, until their respective class certificate balances have been reduced to zero, and (ii) second, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3 and Class B-4 certificates, in that order, until their respective class certificate balances have been reduced to zero;

(2)on each distribution date on and after the Stepdown Date and on which a Trigger Event is not in effect, (i) first, to the Class A certificates, pursuant to the allocation described below, the lesser of the principal distribution amount and an amount equal to the principal distribution entitlement for the Class A certificates (each as further described in “Description of the Certificates—Distributions of Interest and Principal” in this free writing prospectus), until their respective class certificate balances have been reduced to zero, and (ii) second, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3 and Class B-4 certificates, in that order, in each case, the lesser of the principal distribution amount and an amount equal to the principal distribution entitlement for that class of certificates (as further described in “Description of the Certificates—Distributions of Interest and Principal” in this free writing prospectus), until their respective class certificate balances have been reduced to zero;

(d)any amount remaining after the distributions in clauses (a), (b) and (c) above, (i) first, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3 and Class B-4 certificates, in that order, any unpaid interest amounts and principal amounts written down from prior distribution dates for those classes, (ii) second, to the excess reserve fund account, an amount equal to any Basis Risk Payment (as defined in the “Glossary” in this free writing prospectus) for that distribution date, (iii) third, from funds on deposit in the excess reserve fund account, an amount equal to any Basis Risk Carryforward Amounts (as defined in the “Glossary” in this free writing prospectus) with respect to the offered certificates for that distribution date in the same order and priority in which accrued certificate interest is allocated among those classes of certificates, with the allocation to the Class A certificates being pro rata based on their respective class certificate balances and then based on their respective Basis Risk Carryforward Amounts, and (iv) fourth, to the interest rate swap provider or the Class P, Class X, Class R or Class R-X certificates, any remaining amounts.

Principal distributions on the Class A-1 certificates will generally be made from principal distributions on the group I mortgage loans. Principal distributions on the Class A-2a, Class A-2b, Class A-2c and Class A-2d certificates will generally be made from principal distributions on the group II mortgage loans, and such distributions will be made sequentially, to the Class A-2a, Class A-2b, Class A-2c and Class A-2d certificates, in that order, until their respective class certificate balances have been reduced to zero. However, from and after the distribution date on which the aggregate class certificate balances of the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3 and Class B-4 certificates and the principal balance of the Class X certificates have been reduced to zero, any principal distributions allocated to the Class A-2a, Class A-2b, Class A-2c and Class A-2d certificates are required to be distributed pro rata among those classes, based on their respective class certificate balances, until their class certificate balances have been reduced to zero.

“Stepdown Date” is defined in the “Glossary” included in this free writing prospectus and generally means the later to occur of (i) the earlier to occur of (a) the distribution date in February 2010 and (b) the distribution date following the distribution date on which the aggregate class certificate balances of the Class A certificates have been reduced to zero and (ii) the first distribution date on which the subordination below the Class A certificates is greater than or equal to 45.00% of the aggregate stated principal balance of the mortgage loans for that distribution date.

“Trigger Event” is defined in the “Glossary” included in this free writing prospectus and generally means either a “cumulative loss trigger event” or a “delinquency trigger event.” A “cumulative loss trigger event” with respect to any distribution date means the circumstances in which the aggregate amount of realized losses incurred since the cut-off date through the last day of the related prepayment period divided by the aggregate stated principal balance of the mortgage loans as of the cut-off date exceeds the applicable cumulative loss percentages described in the definition of “Cumulative Loss Trigger Event” in the “Glossary” included in this free writing prospectus. A “delinquency trigger event” with respect to any distribution date means the circumstances in which the quotient (expressed as a percentage) of (x) the rolling three-month average of the aggregate unpaid principal balance of mortgage loans that are 60 days or more delinquent (including mortgage loans in foreclosure and mortgage loans related to REO property) and (y) the aggregate unpaid principal balance of the mortgage loans, as of the last day of the related due period, equals or exceeds the applicable percentages described in the definition of “Delinquency Trigger Event” included in the “Glossary.”

In addition to the distributions set forth above, distributions will be required to be made to certificateholders from any payments received by the trust under the interest rate swap agreement. Such payments will be made in the order and priority described under “Description of the Certificates—Swap Account” in this free writing prospectus.

Credit Enhancement

The credit enhancement provided for the benefit of the holders of the certificates consists solely of:

·   the use of excess interest, after taking into account certain payments received or paid by the trust pursuant to the interest rate swap agreement described below, to cover losses on the mortgage loans and as a distribution of principal to maintain overcollateraliza-tion;

·   the subordination of distributions on the more subordinate classes of certificates to the required distributions on the more senior classes of certificates; and

·   the allocation of losses on the mortgage loans to the most subordinate classes of certificates.

Interest Rate Swap Agreement

On the closing date, the trustee (on behalf of a separate trust which will hold the interest rate swap agreement) will enter into an interest rate swap agreement with Morgan Stanley Capital Services Inc., the interest rate swap provider, whose payment obligations are 100% guaranteed by Morgan Stanley. Morgan Stanley is rated “Aa3” by Moody’s Investors Service, Inc. and “A+” by Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.

Under the interest rate swap agreement, on each distribution date commencing with the distribution date in January 2008 and ending with the distribution date in January 2013, the trust will pay to the interest rate swap provider a fixed payment at a rate of 5.05% per annum, determined on a “30/360” basis, and the interest rate swap provider will pay to the trust a floating payment at a rate of one-month LIBOR (as determined pursuant to the interest rate swap agreement), determined on an “actual/360” basis, in each case calculated on the product of the scheduled notional amount and the multiplier set forth on the schedule attached as Annex II to this free writing prospectus for that distribution date. To the extent that the fixed payment exceeds the floating payment payable with respect to any distribution date during such period, amounts otherwise available for payments on the certificates will be applied on or prior to such distribution date to make a net payment to the interest rate swap provider, and to the extent that the floating payment exceeds the fixed payment payable with respect to any distribution date during such period, the interest rate swap provider will make a net payment to the trust on or prior to such distribution date. Any net amounts received by or paid out from the trust under the interest rate swap agreement will either increase or reduce the amount available to make payments on the certificates, as described under “Description of the Certificates—Swap Account” in this free writing prospectus. The interest rate swap agreement is scheduled to terminate following the distribution date in January 2013.

For further information regarding the interest rate swap agreement, see “Description of the Certificates—Interest Rate Swap Agreement” in this free writing prospectus.

Interest Rate Cap Agreement

The offered certificates will have the benefit of an interest rate cap agreement provided by Morgan Stanley Capital Services Inc., the interest rate cap provider, whose payment obligations are guaranteed by Morgan Stanley. The payments, if any, pursuant to the interest rate cap agreement will be available to cover certain shortfalls in interest that may result from the pass-through rates on the offered certificates being limited by the cap on those pass-through rates. All obligations of the trust under the interest rate cap agreement will be paid on or prior to the closing date. For further information regarding the interest rate cap agreement, see “Description of the Certificates—Interest Rate Cap Agreement” in this free writing prospectus.

The Mortgage Loans

The mortgage loans to be included in the trust will be primarily fixed and adjustable rate subprime mortgage loans secured by first-lien and second-lien mortgages or deeds of trust on residential real properties. All of the mortgage loans were purchased by the sponsor from NC Capital Corporation, which in turn acquired them from its affiliate New Century Mortgage Corporation. NC Capital Corporation will make certain representations and warranties relating to the mortgage loans. Approximately 0.44% of the mortgage loans the sponsor purchased from NC Capital Corporation were subsequently transferred by the sponsor to Morgan Stanley Securitized Assets LLC.

On the closing date, the sponsor will transfer approximately 99.56% of the mortgage loans, and Morgan Stanley Securitized Assets LLC will transfer the remainder of the mortgage loans to the depositor and the trust will acquire all of the mortgage loans from the depositor. The aggregate scheduled principal balance of the mortgage loans as of the cut-off date will be approximately $1,250,007,962. Approximately 22.36% of the mortgage loans are fixed rate and approximately 77.64% of the mortgage loans are adjustable rate. Approximately 94.20% of the mortgage loans are first-lien mortgage loans, and approximately 5.80% of the mortgage loans are second-lien mortgage loans.

The information regarding the mortgage loans set forth below that is based on the principal balance of the mortgage loans as of the cut-off date assumes the timely receipt of principal scheduled to be paid on the mortgage loans on or prior to the cut-off date and no delinquencies, defaults or prepayments from December 1, 2006 through the cut-off date.

The mortgage loans have original terms to maturity of not greater than 360 months, have a weighted average remaining term to scheduled maturity of 355 months and have the following approximate characteristics as of the cut-off date:

Range of interest rates:	5.575%	to	14.700%
Weighted average interest rate:	8.366%
Range of gross margins of adjustable rate mortgage loans:	5.000%	to	7.675%
Weighted average gross margin of adjustable rate mortgage loans:	6.203%
Range of minimum interest rates of adjustable rate mortgage loans:	5.575%	to	13.950%
Weighted average minimum interest rate of adjustable rate mortgage loans:	8.244%
Range of maximum interest rates of adjustable rate mortgage loans:	12.575%	to	20.950%
Weighted average maximum interest rate of adjustable rate mortgage loans:	15.239%
Range of principal balances:	$14,901	to	$970,000
Average principal balance:	$191,896
Range of combined original loan-to-value ratios:	7.69%	to	100.00%
Weighted average combined original loan-to-value ratio:	81.04%
Weighted average next adjustment date of adjustable rate mortgage loans:	November 2008

Primarily for the purpose of calculating principal distributions on the Class A certificates, as further described in this free writing prospectus, the mortgage loans will be divided into two subpools, designated as “group I mortgage loans” and “group II mortgage loans.” The group I mortgage loans will consist only of those mortgage loans with principal balances that conform to Fannie Mae and Freddie Mac guidelines. The group II mortgage loans will consist of all other remaining mortgage loans. Information about the characteristics of the mortgage loans in each group is described under “The Mortgage Loan Pool” in this free writing prospectus.

After an initial fixed rate period, the interest rate on all of the adjustable rate mortgage loans will adjust semi-annually on each adjustment date to equal the sum of six-month LIBOR and the gross margin for that mortgage loan subject to periodic and lifetime limitations. See “The Mortgage Loan Pool—The Index” in this free writing prospectus.

For the adjustable-rate mortgage loans, the first adjustment date will occur only after initial periods of approximately two years, three years or five years, as more fully described under “The Mortgage Loan Pool” in this free writing prospectus. For additional information regarding the mortgage loans, see “The Mortgage Loan Pool” in this free writing prospectus.

Servicing of the Mortgage Loans

Countrywide Home Loans Servicing LP will act as servicer with respect to approximately 39.02% of the mortgage loans. Saxon Mortgage Services, Inc. will act as servicer with respect to approximately 60.98% of the mortgage loans. Each servicer will be obligated to service and administer the mortgage loans serviced by it on behalf of the trust, for the benefit of the holders of the certificates.

Optional Termination of the Trust

Subject to the satisfaction of the conditions described under “The Pooling and Servicing Agreement—Termination; Optional Clean-up Call” in this free writing prospectus, Saxon Mortgage Services, Inc. and Countrywide Home Loans Servicing LP, individually, or together, may, at its or their option, purchase the mortgage loans and terminate the trust on any distribution date when the aggregate stated principal balance, as further described in this free writing prospectus, of the mortgage loans as of the last day of the related due period is equal to or less than 5% of the aggregate stated principal balance of the mortgage loans as of the cut-off date. That purchase of the mortgage loans would result in the payment on that distribution date of the final distribution on the certificates and a termination of the trust.

Advances

Each servicer will be required to make cash advances with respect to delinquent payments of principal and interest on the mortgage loans serviced by it, unless such servicer reasonably believes that the cash advances cannot be repaid from future payments on the applicable mortgage loans. The trustee acting as successor servicer will advance its own funds to make advances if either servicer fails to do so (unless it deems the advances to be nonrecoverable) as required under the pooling and servicing agreement. These cash advances are only intended to maintain a regular flow of scheduled interest and principal payments on the certificates and are not intended to guarantee or insure against losses. The servicers (and the trustee as successor servicer and any other successor servicer, if applicable) will not be required to make any advance that it determines would be nonrecoverable. Each servicer will also be required to pay compensating interest to cover prepayment interest shortfalls to the extent of its servicing fee.

Denominations

The offered certificates will be issued and available only in book-entry form, in denominations of $25,000 and integral multiples of $1 in excess of $25,000, except that one certificate of each class may be issued in an amount less than $25,000.

Servicing and Trustee Fees

Each servicer is entitled with respect to each mortgage loan serviced by it to a monthly servicing fee, which will be retained by such servicer from such mortgage loan or payable monthly from amounts on deposit in the related collection account. The servicing fee for each servicer will be an amount equal to interest at one-twelfth of a rate equal to 0.50% on the stated principal balance of each mortgage loan serviced by it.

The trustee is entitled with respect to each mortgage loan to a monthly trustee fee, which will be remitted to the trustee monthly by the servicers from amounts on deposit in the related collection account. The trustee fee will be an amount equal to one-twelfth of a rate not greater than 0.02% on the stated principal balance of each mortgage loan.

Optional Purchase of Delinquent Mortgage Loans

The applicable servicer (or its assignee) may, or upon the request of the holders of a majority of the Class X certificates, will be required to, purchase from the trust any mortgage loan that is 90 days or more delinquent as described in this free writing prospectus under “The Pooling and Servicing Agreement—Optional Purchase of Delinquent Mortgage Loans.”

Required Repurchases or Substitutions of Mortgage Loans

NC Capital Corporation has made or will make certain representations and warranties relating to the mortgage loans. If with respect to any mortgage loan any of the representations and warranties made by NC Capital Corporation are breached in any material respect as of the date made, or there exists any uncured material document defect, NC Capital Corporation will be obligated to repurchase, or substitute for, the mortgage loan as further described in this free writing prospectus under “Description of the Certificates—Representations and Warranties Relating to the Mortgage Loans” and “—Delivery of Mortgage Loan Documents.”

ERISA Considerations

The offered certificates may be purchased by a pension or other employee benefit plan or arrangement subject to the Employee Retirement Income Security Act of 1974, as amended, or Section 4975 of the Internal Revenue Code of 1986, as amended, so long as certain conditions are met. Prior to termination of a separate trust which holds the interest rate swap agreement, a benefit plan which meets the requirements of an investor-based class exemption may purchase the offered certificates.

In making a decision regarding investing in any class of offered certificates, fiduciaries of such plans or arrangements should consider the additional requirements resulting from the interest rate swap agreement as discussed under “ERISA Considerations” in this free writing prospectus.

Federal Tax Aspects

Thacher Proffitt & Wood LLP is acting as tax counsel to Morgan Stanley ABS Capital I Inc. and is of the opinion that: portions of the trust will be treated as multiple real estate mortgage investment conduits, or REMICs, for federal income tax purposes; and the offered certificates will represent regular interests in a REMIC, which will be treated as debt instruments of a REMIC, and will represent interests in the right to receive certain basis risk interest carry forward payments and the obligation to make certain payments to the swap account, pursuant to the payment priorities in the transaction. Each interest in basis risk interest carry forward payments will be treated as an interest rate cap contract for federal income tax purposes.

Legal Investment

None of the classes of offered certificates will constitute “mortgage related securities” for purposes of the Secondary Mortgage Market Enhancement Act of 1984, as amended. If your investment activities are subject to legal investment laws and regulations, regulatory capital requirements, or review by regulatory authorities, then you may be subject to restrictions on investment in the offered certificates. You should consult your own legal advisors for assistance in determining the suitability of and consequences to you of the purchase, ownership, and sale of the offered certificates. See “Legal Investment” in this free writing prospectus and in the prospectus.

Ratings

In order to be issued, the offered certificates must be assigned ratings not lower than the following by Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. and Moody’s Investors Service, Inc.:

Class	S&P	Moody’s
A-1	AAA	Aaa
A-2a	AAA	Aaa
A-2b	AAA	Aaa
A-2c	AAA	Aaa
A-2d	AAA	Aaa
M-1	AA+	Aa1
M-2	AA	Aa2
M-3	AA-	Aa3
M-4	A+	A1
M-5	A	A2
M-6	A-	A3
B-1	BBB+	Baa1
B-2	BBB	Baa2
B-3	BBB-	Baa3
B-4	BB+	Baa3

A security rating is not a recommendation to buy, sell or hold securities. These ratings may be lowered or withdrawn at any time by any of the rating agencies. The ratings set forth above do not take into account the existence of the interest rate cap agreement.

RISK FACTORS

In addition to the risk factors discussed in the prospectus, prospective certificateholders should consider, among other things, the following additional factors in connection with the purchase of the certificates. Unless otherwise noted, all percentages are based upon the scheduled principal balances of the mortgage loans as of the cut-off date, which is January 1, 2007. Unless otherwise indicated in this free writing prospectus, the information regarding the mortgage loans set forth in this free writing prospectus that is based on the principal balance of the mortgage loans as of the cut-off date assumes the timely receipt of principal scheduled to be paid on the mortgage loans on or prior to the cut-off date and no delinquencies, defaults or prepayments from December 1, 2006 through the cut-off date.

Less stringent underwriting standards and the resultant potential for delinquencies on the mortgage loans could lead to losses on your securities.

The mortgage loans were made, in part, to borrowers who, for one reason or another, are not able, or do not wish, to obtain financing from traditional sources. These mortgage loans may be considered to be of a riskier nature than mortgage loans made by traditional sources of financing, so that the holders of the certificates may be deemed to be at greater risk than if the mortgage loans were made to other types of borrowers. The underwriting standards used in the origination of the mortgage loans held by the trust are generally less stringent than those of Fannie Mae or Freddie Mac with respect to a borrower’s credit history and in certain other respects. Borrowers on the mortgage loans may have an impaired or unsubstantiated credit history. As a result of this less stringent approach to underwriting, the mortgage loans purchased by the trust may experience higher rates of delinquencies, defaults and foreclosures than mortgage loans underwritten in a manner which is more similar to the Fannie Mae and Freddie Mac guidelines.

Increased use of new mortgage loan products by borrowers may increase the risk of delinquencies and defaults.

In recent years, borrowers have increasingly financed their homes with new mortgage loan products, which in many cases have allowed them to purchase homes that they might otherwise have been unable to afford. Many of these new products feature low monthly payments during the initial years of the loan that can increase (in some cases, significantly) over the loan term. There is little historical data with respect to these new mortgage loan products. Consequently, as borrowers face potentially higher monthly payments for the remaining terms of their loans, it is possible that, combined with other economic conditions such as increasing interest rates and deterioration of home values, borrower delinquencies and defaults could exceed anticipated levels. In that event, the securities, and your investment in the securities, may not perform as you anticipate.

Violation of various federal, state and local laws may result in losses on the mortgage loans.

There is a continuing focus by state and federal banking regulatory agencies, state attorneys general offices, the Federal Trade Commission, the U.S. Department of Justice, the U.S. Department of Housing and Urban Development and state and local governmental authorities on certain lending practices by some companies in the subprime industry, sometimes referred to as “predatory lending” practices. Sanctions have been imposed by state, local and federal governmental agencies for practices including, but not limited to, charging borrowers excessive fees, imposing higher interest rates than the borrower’s credit risk warrants and failing to adequately disclose the material terms of loans to the borrowers.

Applicable state and local laws generally regulate interest rates and other charges, require certain disclosure, and require licensing of the originators. In addition, other state and local laws, public policy and general principles of equity relating to the protection of consumers, unfair and deceptive practices and debt collection practices may apply to the origination, servicing and collection of the mortgage loans.

The mortgage loans are also subject to federal laws, including:

·   the Federal Truth in Lending Act and Regulation Z promulgated under that Act, which require certain disclosures to the mortgagors regarding the terms of the mortgage loans;

·   the Equal Credit Opportunity Act and Regulation B promulgated under that Act, which prohibit discrimination on the basis of age, race, color, sex, religion, marital status, national origin, receipt of public assistance or the exercise of any right under the Consumer Credit Protection Act, in the extension of credit; and

·   the Fair Credit Reporting Act, which regulates the use and reporting of information related to the mortgagor’s credit experience.

Violations of certain provisions of these federal, state and local laws may limit the ability of each servicer to collect all or part of the principal of, or interest on, the mortgage loans and in addition could subject the trust to damages and administrative enforcement (including disgorgement of prior interest and fees paid). In particular, an originator’s failure to comply with certain requirements of these federal and state laws could subject the trust (and other assignees of the mortgage loans) to monetary penalties, and result in the obligors’ rescinding the mortgage loans against either the trust or subsequent holders of the mortgage loans.

NC Capital Corporation has represented or will represent that each mortgage loan is in compliance with applicable federal, state and local laws and regulations. In addition, NC Capital Corporation has also represented or will represent that none of the mortgage loans are covered by the Home Ownership and Equity Protection Act of 1994 or is classified as a “high cost home,” “threshold,” “covered,” “high risk home” or “predatory” loan under any other applicable federal, state or local law. In the event of a breach of any of such representations, NC Capital Corporation will be obligated to cure such breach or repurchase or replace the affected mortgage loan, in the manner and to the extent described in this free writing prospectus.

Geographic concentration of the mortgage loans in particular jurisdictions may result in greater losses if those jurisdictions experience economic downturns.

Different geographic regions of the United States from time to time will experience weaker regional economic conditions and housing markets, and, consequently, may experience higher rates of loss and delinquency on mortgage loans generally. Any concentration of the mortgage loans in a region may present risk considerations in addition to those generally present for similar mortgage-backed securities without that concentration. This may subject the mortgage loans held by the trust to the risk that a downturn in the economy in this region of the country would more greatly affect the pool than if the pool were more diversified.

In particular, the following approximate percentages of mortgage loans were secured by mortgaged properties located in the following states:

Group I Mortgage Loans

California	Florida	Texas
36.13%	10.42%	5.25%

Group II Mortgage Loans

California	Florida	New York	New Jersey
31.17%	9.78%	7.99%	5.25%

Because of the relative geographic concentration of the mortgaged properties within these states, losses on the mortgage loans may be higher than would be the case if the mortgaged properties were more geographically diversified. For example, some of the mortgaged properties may be more susceptible to certain types of special hazards, such as earthquakes, hurricanes, wildfires, floods, and other natural disasters and major civil disturbances, than residential properties located in other parts of the country.

In addition, the economies of the states with high concentrations of mortgaged properties may be adversely affected to a greater degree than the economies of other areas of the country by certain regional developments. If the residential real estate markets in an area of concentration experience an overall decline in property values after the dates of origination of the respective mortgage loans, then the rates of delinquencies, foreclosures and losses on the mortgage loans may increase and the increase may be substantial.

Effect on yields caused by prepayments, defaults and losses.

Mortgagors may prepay their mortgage loans in whole or in part at any time. We cannot predict the rate at which mortgagors will repay their mortgage loans. A prepayment of a mortgage loan generally will result in a prepayment on the certificates.

·   If you purchase your certificates at a discount and principal is repaid slower than you anticipate, then your yield may be lower than you anticipate.

·   If you purchase your certificates at a premium and principal is repaid faster than you anticipate, then your yield may be lower than you anticipate.

·   The rate of prepayments on the mortgage loans will be sensitive to prevailing interest rates. Generally, for fixed rate mortgage loans, if prevailing interest rates decline significantly below the interest rates on the fixed rate mortgage loans, the fixed rate mortgage loans are more likely to prepay than if prevailing rates remain above the interest rates on the fixed rate mortgage loans. Conversely, if prevailing interest rates rise significantly, prepayments on the fixed rate mortgage loans may decrease.

·   The prepayment behavior of the adjustable rate mortgage loans and of the fixed rate mortgage loans may respond to different factors, or may respond differently to the same factors. If, at the time of their first adjustment, the interest rates on any of the adjustable rate mortgage loans would be subject to adjustment to a rate higher than the then prevailing mortgage interest rates available to borrowers, the borrowers may prepay their adjustable rate mortgage loans. The adjustable rate mortgage loans may also suffer an increase in defaults and liquidations following upward adjustments of their interest rates, especially following their initial adjustments.

·   Approximately 76.88% of the group I mortgage loans and approximately 72.18% of the group II mortgage loans require the mortgagor to pay a prepayment charge in certain instances if the mortgagor prepays the mortgage loan during a stated period, which may be from one to three years after the mortgage loan was originated. A prepayment charge may or may not discourage a mortgagor from prepaying the related mortgage loan during the applicable period.

·   NC Capital Corporation may be required to purchase mortgage loans from the trust in the event certain breaches of its representations and warranties occur or certain material document defects occur, which in each case have not been cured. These purchases will have the same effect on the holders of the offered certificates as a prepayment of those mortgage loans.

·   Saxon Mortgage Services, Inc. and Countrywide Home Loans Servicing LP, individually or together, may purchase all of the mortgage loans when the aggregate stated principal balance of the mortgage loans as of the last day of the related due period is equal to or less than 5% of the aggregate stated principal balance of the mortgage loans as of the cut-off date.

If the rate of default or the amount of losses on the mortgage loans is higher than you expect, then your yield may be lower than you expect.

·   As a result of the absorption of realized losses on the mortgage loans by excess interest, after taking into account certain payments received or paid by the trust pursuant to the interest rate swap agreement, and overcollateralization as described in this free writing prospectus, liquidations of defaulted mortgage loans, whether or not realized losses are incurred upon the liquidations, are likely to result in an earlier return of principal to the offered certificates and are likely to influence the yield on the offered certificates in a manner similar to the manner in which principal prepayments on the mortgage loans would influence the yield on the offered certificates.

·   The overcollateralization provisions are intended to result in an accelerated rate of principal distributions to holders of the offered certificates then entitled to principal distributions at any time that the overcollateralization provided by the mortgage loan pool falls below the required level. An earlier return of principal to the holders of the offered certificates as a result of the overcollateralization provisions will influence the yield on the offered certificates in a manner similar to the manner in which principal prepayments on the mortgage loans will influence the yield on the offered certificates.

·   The multiple class structure of the offered certificates causes the yield of certain classes of the offered certificates to be particularly sensitive to changes in the rates of prepayments of mortgage loans. Because distributions of principal will be made to the classes of offered certificates according to the priorities described in this free writing prospectus, the yield to maturity on those classes of offered certificates will be sensitive to the rates of prepayment on the mortgage loans experienced both before and after the commencement of principal distributions on those classes. In particular, the Class M and Class B certificates generally are not entitled to receive (unless the aggregate principal balance of the Class A certificates has been reduced to zero) any portion of the amount of principal payable to the offered certificates prior to the distribution date in February 2010. Thereafter, subject to the loss and delinquency performance of the mortgage loan pool, the Class M and Class B certificates may continue (unless the aggregate principal balance of the Class A certificates has been reduced to zero) to receive no portion of the amount of principal then payable to the offered certificates. After taking into account certain payments by the trust pursuant to the interest rate swap agreement, the weighted average lives of the Class M and Class B certificates will therefore be longer than would otherwise be the case. The effect on the market value of the Class M and Class B certificates of changes in market interest rates or market yields for similar securities may be greater than for the Class A certificates.

The value of your certificates may be reduced if the rate of default or the amount of losses is higher than expected.

·   If the performance of the mortgage loans is substantially worse than assumed by the rating agencies, the ratings of any class of the certificates may be lowered or withdrawn in the future. This may reduce the value of those certificates. No one will be required to supplement any credit enhancement or to take any other action to maintain any rating of the certificates.

Newly originated mortgage loans may be more likely to default, which may cause losses on the offered certificates.

·   Defaults on mortgage loans tend to occur at higher rates during the early years of the mortgage loans. Substantially all of the mortgage loans have been originated within the 12 months prior to their sale to the trust. As a result, the trust may experience higher rates of default than if the mortgage loans had been outstanding for a longer period of time.

The credit enhancement features may be inadequate to provide protection for the offered certificates.

·   The credit enhancement features described in this free writing prospectus are intended to enhance the likelihood that holders of the Class A certificates, and to a limited extent, the holders of the Class M certificates and, to a lesser degree, the holders of the Class B certificates, will receive regular payments of interest and principal. However, we cannot assure you that the applicable credit enhancement will adequately cover any shortfalls in cash available to pay your certificates as a result of delinquencies or defaults on the mortgage loans. If delinquencies or defaults occur on the mortgage loans, neither the servicers nor any other entity will advance scheduled monthly payments of interest and principal on delinquent or defaulted mortgage loans if the advances are not likely to be recovered.

·   If substantial losses occur as a result of defaults and delinquent payments on the mortgage loans, you may suffer losses, even if you own Class A Certificates.

Interest generated by the mortgage loans may be insufficient to maintain the required level of overcollateralization.

The weighted average of the net interest rates on the mortgage loans is expected to be higher than the weighted average of the pass-through rates on the offered certificates. Interest on the mortgage loans, after taking into account certain payments received or paid by the trust pursuant to the interest rate swap agreement, is expected to generate more interest than is needed to pay interest owed on the offered certificates and to pay certain fees and expenses of the trust. Any remaining interest generated by the mortgage loans will then be used to absorb losses that occur on the mortgage loans. After these financial obligations of the trust are covered, the available excess interest generated by the mortgage loans will be used to maintain overcollateralization at the required level determined as provided in the pooling and servicing agreement. We cannot assure you, however, that enough excess interest will be generated to absorb losses or to maintain the required level of overcollateralization. The factors described below, as well as the factors described in the next Risk Factor, will affect the amount of excess interest that the mortgage loans will generate:

·   Every time a mortgage loan is prepaid in full, excess interest may be reduced because the mortgage loan will no longer be outstanding and generating interest or, in the case of a partial prepayment, will be generating less interest.

·   Every time a mortgage loan is liquidated or written off, excess interest may be reduced because those mortgage loans will no longer be outstanding and generating interest.

·   If the rates of delinquencies, defaults or losses on the mortgage loans turn out to be higher than expected, excess interest will be reduced by the amount necessary to compensate for any shortfalls in cash available to make required distributions on the offered certificates.

·   All of the adjustable rate mortgage loans have interest rates that adjust based on an index that is different from the index used to determine the pass-through rates on the offered certificates, and the fixed rate mortgage loans have interest rates that do not adjust. In addition, the first adjustment of the interest rates for approximately 86.31% of the adjustable rate mortgage loans will not occur until two years after the date of origination, the first adjustment of the interest rates for approximately 12.78% of the adjustable rate mortgage loans will not occur until three years after the date of origination and the first adjustment of the interest rates for approximately 0.91% of the adjustable rate mortgage loans will not occur until five years after the date of origination. As a result, the pass-through rates on the offered certificates may increase relative to the weighted average of the interest rates on the mortgage loans, or the pass-through rate on the offered certificates may remain constant as the weighted average of the interest rates on the mortgage loans declines. In either case, this would require that more of the interest generated by the mortgage loans be applied to cover interest on the offered certificates. The pass-through rates on the Class A-1, Class A-2a, Class A-2b, Class A-2c and Class A-2d certificates cannot exceed the lesser of the weighted average interest rate of the mortgage loans, reduced for net payments to the interest rate swap provider, in the applicable mortgage loan group or in the mortgage loan pool, in either case less certain fees and expenses payable by the trust, and the pass-through rates on the Class M and Class B certificates cannot exceed the weighted average interest rate of the mortgage loans, reduced for net payments to the interest rate swap provider, in the mortgage loan pool less certain fees and expenses payable by the trust.

·   If prepayments, defaults and liquidations occur more rapidly on the mortgage loans with relatively higher interest rates than on the mortgage loans with relatively lower interest rates, the amount of excess interest generated by the mortgage loans will be less than would otherwise be the case.

·   Investors in the offered certificates, and particularly the Class B certificates, should consider the risk that the overcollateralization may not be sufficient to protect your certificates from losses.

Effect of interest rates on the mortgage loans and other factors on the pass-through rates of the offered certificates.

The offered certificates accrue interest at pass-through rates based on the one-month LIBOR index plus specified margins, but are subject to certain limitations. Those limitations on the pass-through rates for the offered certificates are, in part, based on the weighted average of the interest rates on the mortgage loans reduced for net payments to the interest rate swap provider and net of certain fees and expenses of the trust.

A variety of factors, in addition to those described in the previous Risk Factor, could limit the pass-through rates and adversely affect the yield to maturity on the offered certificates. Some of these factors are described below:

·   The interest rates on the fixed rate mortgage loans will not adjust, and the interest rates on the adjustable rate mortgage loans are based on a six-month LIBOR index. All of the adjustable rate mortgage loans have periodic, minimum and maximum limitations on adjustments to their interest rates, and, as discussed in the previous Risk Factor, the adjustable rate mortgage loans will not have the first adjustment to their interest rates until two years, three years or five years after the origination of those mortgage loans. As a result of the limit on the pass-through rates for the offered certificates, those certificates may accrue less interest than they would accrue if their pass-through rates were based solely on the one-month LIBOR index plus the specified margins.

·   The six-month LIBOR index may change at different times and in different amounts than one-month LIBOR. As a result, it is possible that interest rates on certain of the adjustable rate mortgage loans may decline while the pass-through rates on the offered certificates are stable or rising. It is also possible that the interest rates on certain of the adjustable rate mortgage loans and the pass-through rates for the offered certificates may decline or increase during the same period, but that the pass-through rates on these certificates may decline more slowly or increase more rapidly.

·   The pass-through rates for the offered certificates adjust monthly and are subject to maximum interest rate caps while the interest rates on the adjustable rate mortgage loans adjust less frequently and the interest rates on the fixed rate mortgage loans do not adjust. Consequently, the limit on the pass-through rates for the offered certificates may limit increases in the pass-through rates for those classes for extended periods in a rising interest rate environment.

·   If prepayments, defaults and liquidations occur more rapidly on the mortgage loans with relatively higher interest rates than on the mortgage loans with relatively lower interest rates, the pass-through rates on the offered certificates are more likely to be limited.

·   If the pass-through rates on the offered certificates are limited for any distribution date due to a cap based on the weighted average net interest rates of the mortgage loans and, in the case of the Class A certificates also, on the weighted average net interest rates of the related loan group (in each case, reduced by certain fees and expenses and net payments to the interest rate swap provider), the resulting interest shortfalls may be recovered by the holders of these certificates on the same distribution date or on future distribution dates on a subordinated basis to the extent that on that distribution date or future distribution dates there are available funds remaining after certain other distributions on the offered certificates and the payment of certain fees and expenses of the trust. In addition, these shortfalls may be recovered from net payments, if any, from the interest rate swap provider. These shortfalls suffered by the offered certificates may also be covered by amounts payable under the interest rate cap agreement. However, we cannot assure you that these funds, if available, will be sufficient to fully cover these shortfalls.

Effect on yields due to rapid prepayments; no assurance of amounts received under the interest rate swap agreement.

Any net payment payable to the interest rate swap provider under the terms of the interest rate swap agreement will reduce amounts available for distribution to certificateholders, and may reduce the pass-through rates on the offered certificates. If the rate of prepayments on the mortgage loans causes the aggregate scheduled principal balance of the mortgage loans in the pool to be less than the amount on which payments due under the interest rate swap agreement are calculated, the relative proportion of interest collections on the mortgage loans that must be applied to make net payments to the interest rate swap provider would increase. The combination of a rapid rate of prepayment and low prevailing interest rates could adversely affect the yields on the offered certificates.

In addition, certain swap termination payments arising under the interest rate swap agreement are payable to the interest rate swap provider on a senior basis and such payments may reduce amounts available for distribution to certificateholders.

Any amounts received under the interest rate swap agreement will be applied as described in this free writing prospectus to pay interest shortfalls, maintain overcollateralization and cover losses. However, no amounts will be payable to the trust by the interest rate swap provider unless the floating payment owed by the interest rate swap provider for a distribution date exceeds the fixed payment owed to the interest rate swap provider for that distribution date. This will not occur except in a period where one-month LIBOR (as determined pursuant to the interest rate swap agreement) exceeds 5.05% per annum. We cannot assure you that any amounts will be received under the interest rate swap agreement, or that any such amounts that are received will be sufficient to cover interest shortfalls or losses on the mortgage loans, or to maintain required overcollateralization.

See “Description of the Certificates—Distributions of Interest and Principal,” “—Swap Account” and

“—Interest Rate Swap Agreement” in this free writing prospectus.

Prepayments on the mortgage loans could lead to shortfalls in the distribution of interest on your certificates.

When a voluntary principal prepayment is made by the mortgagor on a mortgage loan (excluding any payments made upon liquidation of any mortgage loan), the mortgagor is charged interest only up to the date of the prepayment, instead of for a full month. However, principal prepayments will only be passed through to the holders of the certificates once a month on the distribution date that follows the prepayment period in which the prepayment was received by the applicable servicer. In the event the timing of any voluntary prepayments in full would cause there to be less than one full month’s interest, at the applicable interest rates, available to be distributed to certificateholders with respect to the prepaid mortgage loans, the applicable servicer is obligated to pay an amount, without any right of reimbursement, for the amount of shortfalls in interest collections payable on the certificates that are attributable to the difference between the interest paid by a mortgagor in connection with those principal prepayments in full and thirty days’ interest on the prepaid mortgage loans, but only to the extent those shortfalls do not exceed the servicing fee for that distribution date payable to such servicer.

If the applicable servicer fails to make such payments or the shortfall exceeds the servicing fee payable to such servicer for the month, there will be fewer funds available for the distribution of interest on the certificates. In addition, no such payments from the servicers will be available to cover prepayment interest shortfalls resulting from partial prepayments or involuntary prepayments such as liquidation of a defaulted mortgage loan. Such shortfalls of interest, if they result in the inability of the trust to pay the full amount of the current interest on the certificates, will result in a reduction of the yield on your certificates.

Additional risks associated with the Class M and Class B Certificates.

The weighted average lives of, and the yields to maturity on, the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3 and Class B-4 certificates will be progressively more sensitive, in that order, to the rate and timing of mortgagor defaults and the severity of ensuing losses on the mortgage loans. If the actual rate and severity of losses on the mortgage loans is higher than those assumed by an investor in such certificates, the actual yield to maturity of such certificates may be lower than the yield anticipated by such holder based on such assumption. The timing of losses on the mortgage loans will also affect an investor’s actual yield to maturity, even if the rate of defaults and severity of losses over the life of the mortgage loans are consistent with an investor’s expectations. In general, the earlier a loss occurs, the greater the effect on an investor’s yield to maturity. Realized losses on the mortgage loans, to the extent they exceed the amount of excess interest, after taking into account certain payments received or paid by the trust pursuant to the interest rate swap agreement, and the amount of overcollateralization following distributions on the related distribution date, will reduce the aggregate principal balance of the Class B-4, Class B-3, Class B-2, Class B-1, Class M-6, Class M-5, Class M-4, Class M-3, Class M-2 and Class M-1 certificates, in that order. As a result of this reduction, less interest will accrue on such class of certificates than would otherwise be the case. Once a realized loss is allocated to a certificate, no principal or interest will be distributable with respect to such written down amount, except to the extent of any subsequent recoveries received on liquidated mortgage loans after they are liquidated. However, the amount of any realized losses allocated to the Class M or Class B certificates may be distributed to the holders of those certificates according to the priorities set forth under “Description of the Certificates—Overcollateralization Provisions” in this free writing prospectus.

Unless the aggregate principal balances of the Class A certificates have been reduced to zero, the Class M and Class B certificates will not be entitled to any principal distributions until at least February 2010 or a later date as provided in this free writing prospectus, or during any period in which delinquencies or cumulative losses on the mortgage loans exceed certain levels. As a result, the weighted average lives of the Class M and Class B certificates will be longer than would otherwise be the case if distributions of principal were allocated among all of the certificates at the same time. As a result of the longer weighted average lives of the Class M and Class B certificates, the holders of such certificates have a greater risk of suffering a loss on their investments. Further, because such certificates might not receive any principal if certain delinquency levels occur, it is possible for such certificates to receive no principal distributions even if no losses have occurred on the mortgage loan pool.

In addition, the multiple class structure of the Class M and Class B certificates causes the yield of such classes to be particularly sensitive to changes in the rates of prepayment of the mortgage loans. Because distributions of principal will be made to the holders of such certificates according to the priorities described in this free writing prospectus, the yield to maturity on such classes of certificates will be sensitive to the rates of prepayment on the mortgage loans experienced both before and after the commencement of principal distributions on such classes. The yield to maturity on such classes of certificates will also be extremely sensitive to losses due to defaults on the mortgage loans (and the timing of those losses), to the extent such losses are not covered by excess interest, after taking into account certain payments received or paid by the trust pursuant to the interest rate swap agreement, the Class X certificates or a class of Class M and Class B certificates with a lower payment priority. Furthermore, as described in this free writing prospectus, the timing of receipt of principal and interest by the Class M and Class B certificates may be adversely affected by losses even if such classes of certificates do not ultimately bear such loss.

The applicable servicer (or its assignee) may, or upon request of the holders of a majority of the Class X certificates will be required to, purchase mortgage loans that become 90 days or more delinquent. Any such purchase would have the same effect on the holders of certificates as a prepayment of the mortgage loans. Such servicer may exercise such option on its own behalf or on behalf of another person, such as a holder of Class X certificates, who might benefit from the removal of such delinquent mortgage loans. The removal of any delinquent mortgage loan by a servicer pursuant to this option may have an effect on whether or not there exists, or continues to exist, a loss and delinquency loss trigger event, which determines the required level of overcollateralization. Therefore, depending on the circumstances, the exercise of this purchase option may adversely affect the market value of your certificates.

Delay in receipt of liquidation proceeds; liquidation proceeds may be less than the mortgage loan balance.

Substantial delays could be encountered in connection with the liquidation of delinquent mortgage loans. Further, reimbursement of advances made on a mortgage loan, liquidation expenses such as legal fees, real estate taxes, hazard insurance and maintenance and preservation expenses may reduce the portion of liquidation proceeds payable on the certificates. If a mortgaged property fails to provide adequate security for the mortgage loan, you will incur a loss on your investment if the credit enhancements described in this free writing prospectus are insufficient to cover the loss.

A portion of the mortgage loans are secured by subordinate mortgages; in the event of a default, these mortgage loans are more likely to experience losses.

Approximately 3.42% of the group I mortgage loans and approximately 6.98% of the group II mortgage loans are secured by second-lien mortgages, which are subordinate to the rights of the holder of the related senior mortgages. As a result, the proceeds from any liquidation, insurance or condemnation proceedings will be available to satisfy the principal balance of the mortgage loan only to the extent that the claims, if any, of each related senior mortgagee are satisfied in full, including any related foreclosure costs. In addition, a holder of a subordinate or junior mortgage may not foreclose on the mortgaged property securing such mortgage unless it either pays the entire amount of the senior mortgages to the senior mortgagees at or prior to the foreclosure sale or undertakes the obligation to make payments on each senior mortgage in the event of a default under any senior mortgage. The trust will have no source of funds to satisfy any senior mortgage or make payments due to any senior mortgagee.

An overall decline in the residential real estate markets could adversely affect the values of the mortgaged properties and cause the outstanding principal balances of the second-lien mortgage loans, together with the senior mortgage loans secured by the same mortgaged properties, to equal or exceed the value of the mortgaged properties. This type of a decline would adversely affect the position of a second mortgagee before having the same effect on the related first mortgagee. A rise in interest rates over a period of time and the general condition of a mortgaged property as well as other factors may have the effect of reducing the value of the mortgaged property from the appraised value at the time the mortgage loan was originated. If there is a reduction in value of the mortgaged property, the ratio of the amount of the mortgage loan to the value of the mortgaged property may increase over what it was at the time the mortgage loan was originated. This type of increase may reduce the likelihood of liquidation or other proceeds being sufficient to satisfy the second-lien mortgage loan after satisfaction of any senior liens.

High loan-to-value ratios increase risk of loss.

Mortgage loans with higher loan-to-value ratios may present a greater risk of loss than mortgage loans with loan-to-value ratios of 80% or below. Approximately 43.11% of the group I mortgage loans and approximately 41.87% of the group II mortgage loans had loan-to-value ratios at origination, or with respect to second-lien mortgage loans, combined loan-to-value ratios at origination, in excess of 80% but not more than 100% at origination. Additionally, the determination of the value of a mortgaged property used in the calculation of the loan-to-value ratios or combined loan-to-value ratios of the mortgage loans may differ from the appraised value of such mortgaged properties or the actual value of such mortgaged properties.

Some of the mortgage loans have an initial interest-only period, which may result in increased delinquencies and losses.

Approximately 18.28% of the group I mortgage loans and approximately 19.61% of the group II mortgage loans have an initial interest-only period of up to seven years after the date of origination. During this period, the payment made by the related mortgagor will be less than it would be if the principal of the mortgage loan was required to amortize. In addition, the mortgage loan principal balance will not be reduced because there will be no scheduled monthly payments of principal during this period. As a result, no principal payments will be made on the offered certificates with respect to these mortgage loans during their interest-only period unless there is a principal prepayment.

After the initial interest-only period, the scheduled monthly payment on these mortgage loans will increase, which may result in increased delinquencies by the related mortgagors. In addition, losses may be greater on these mortgage loans as a result of there being no principal amortization during the early years of these mortgage loans. Although the amount of principal included in each scheduled monthly payment for a traditional mortgage loan is relatively small during the first few years after the origination of a mortgage loan, in the aggregate, the amount can be significant. Any resulting delinquencies and losses, to the extent not covered by excess interest, after taking into account certain payments received or paid by the trust pursuant to the interest rate swap agreement, or overcollateralization, will be allocated to the offered certificates in reverse order of seniority.

Mortgage loans with an initial interest-only period are relatively new in the mortgage marketplace. The performance of these mortgage loans may be significantly different from mortgage loans that amortize from origination. In particular, the failure by the related mortgagor to build equity in the property may affect the delinquency, loss and prepayment experience with respect to these mortgage loans.

Payments in full of a balloon loan depend on the borrower’s ability to refinance the balloon loan or sell the mortgaged property.

Approximately 47.04% of the group I mortgage loans and approximately 43.79% of the group II mortgage loans will not be fully amortizing over their terms to maturity and, thus, will require substantial principal payments, i.e., balloon payments, at their stated maturity. Mortgage loans with balloon payments involve a greater degree of risk because the ability of a borrower to make a balloon payment typically will depend upon the borrower’s ability either to timely refinance the loan or to timely sell the related mortgaged property. The ability of a borrower to accomplish either of these goals will be affected by a number of factors, including:

·   the level of available interest rates at the time of sale or refinancing;

·   the borrower’s equity in the related mortgaged property;

·   the financial condition of the mortgagor;

·   tax laws;

·   prevailing general economic conditions; and

·   the availability of credit for single family real properties generally.

NC Capital Corporation may not be able to repurchase defective mortgage loans.

NC Capital Corporation has made or will make various representations and warranties related to the mortgage loans. Those representations are summarized in “Description of the Certificates—Representations and Warranties Relating to the Mortgage Loans” in this free writing prospectus.

If NC Capital Corporation fails to cure a material breach of its representations and warranties with respect to any mortgage loan sold by it in a timely manner, then NC Capital Corporation would be required to repurchase or substitute for the defective mortgage loan. It is possible that NC Capital Corporation may not be capable of repurchasing or substituting for any defective mortgage loans, for financial or other reasons. The inability of NC Capital Corporation to repurchase or substitute for defective mortgage loans would likely cause the mortgage loans to experience higher rates of delinquencies, defaults and losses. As a result, shortfalls in the distributions due on the certificates could occur.

The interest rate swap agreement and the interest rate cap agreement are subject to counterparty risk.

The assets of the trust include an interest rate swap agreement and an interest rate cap agreement that will require the interest rate swap provider or the interest rate cap provider, as applicable, to make certain payments for the benefit of the holders of the offered certificates. To the extent that payments on the offered certificates depend in part on payments to be received by the trustee under the interest rate swap agreement or the interest rate cap agreement, the ability of the trustee to make such payments on such classes of certificates will be subject to the credit risk of the interest rate swap provider or the interest rate cap provider, as applicable.

The credit rating of the interest rate swap provider could affect the rating of the offered certificates.

Morgan Stanley, the guarantor of the interest rate swap provider under the interest rate swap agreement, is rated “A+” by Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and “Aa3” by Moody’s Investors Service, Inc. The ratings on the offered certificates are dependent in part upon these credit ratings. If a credit rating of the guarantor of the interest rate swap provider is qualified, reduced or withdrawn and a substitute interest rate swap provider is not obtained in accordance with the terms of the interest rate swap agreement, the ratings of the offered certificates may be qualified, reduced or withdrawn. As a result, the value and marketability of the offered certificates may be adversely affected. See “Description of the Certificates—Interest Rate Swap Agreement” in this free writing prospectus.

Bankruptcy of the depositor, the sponsor or Morgan Stanley Securitized Assets LLC may delay or reduce collections on loans.

The depositor, the sponsor or Morgan Stanley Securitized Assets LLC may be eligible to become a debtor under the United States Bankruptcy Code. If the depositor, the sponsor or Morgan Stanley Securitized Assets LLC were to become a debtor under the United States Bankruptcy Code, the bankruptcy court could be asked to determine whether the mortgage loans that support the certificates constitute property of the debtor, or whether they constitute property of the related issuing entity. If the bankruptcy court were to determine that the mortgage loans constitute property of the estate of the debtor, there could be delays in payments to certificateholders of collections on the mortgage loans and/or reductions in the amount of the payments paid to certificateholders. The mortgage loans would not constitute property of the estate of the depositor, the sponsor or Morgan Stanley Securitized Assets LLC if the transfers of the mortgage loans from the sponsor and Morgan Stanley Securitized Assets LLC to the depositor and from the depositor to the trust are treated as true sales, rather than pledges, of the mortgage loans.

The transactions contemplated by this free writing prospectus and the prospectus will be structured so that, if there were to be a bankruptcy proceeding with respect to the sponsor, Morgan Stanley Securitized Assets LLC or the depositor, the transfers should be treated as true sales, and not as pledges. The mortgage loans should accordingly be treated as property of the trust and not as part of the bankruptcy estate of the depositor, the sponsor or Morgan Stanley Securitized Assets LLC. In addition, the depositor is operated in a manner that should make it unlikely that it would become the subject of a bankruptcy filing.

However, we cannot assure you that a bankruptcy court would not recharacterize the transfers as borrowings of the depositor, the sponsor or Morgan Stanley Securitized Assets LLC secured by pledges of the mortgage loans. Any request by the debtor (or any of its creditors) for such a recharacterization of these transfers, if successful, could result in delays in payments of collections on the mortgage loans and/or reductions in the amount of the payments paid to certificateholders, which could result in losses on the certificates. Even if a request to recharacterize the transfers were to be denied, delays in payments on the mortgage loans and resulting delays or losses on the certificates could result.

External events may increase the risk of loss on the mortgage loans.

In response to previously executed and threatened terrorist attacks in the United States and foreign countries, the United States has initiated military operations and has placed a substantial number of armed forces reservists and members of the National Guard on active duty status. It is possible that the number of reservists and members of the National Guard placed on active duty status in the near future may increase. To the extent that a member of the military, or a member of the armed forces reserves or National Guard who is called to active duty is a mortgagor of a mortgage loan in the trust, the interest rate limitation of the Servicemembers Civil Relief Act, and any comparable state law, will apply. Substantially all of the mortgage loans have mortgage interest rates which exceed such limitation, if applicable. This may result in interest shortfalls on the mortgage loans, which may result in shortfalls of interest on your certificates. None of the responsible party, the depositor, the underwriters, the trustee, the sponsor, the servicers or any other party has taken any action to determine whether any of the mortgage loans would be affected by such interest rate limitation. See “Description of the Certificates—Distributions of Interest and Principal” in this free writing prospectus and “Material Legal Aspects of the Loans—Servicemembers’ Civil Relief Actand the California Military and Veterans Code” in the prospectus.

Drug, RICO and money laundering violations could lead to property forfeitures.

Federal law provides that property purchased or improved with assets derived from criminal activity or otherwise tainted, or used in the commission of certain offenses, can be seized and ordered forfeited to the United States of America. The offenses which can trigger such a seizure and forfeiture include, among others, violations of the Racketeer Influenced and Corrupt Organizations Act, the Bank Secrecy Act, the anti-money laundering laws and regulations, including the USA Patriot Act of 2001 and the regulations issued pursuant to that Act, as well as the narcotic drug laws. In many instances, the United States may seize the property even before a conviction occurs.

In the event of a forfeiture proceeding, a lender may be able to establish its interest in the property by proving that (1) its mortgage was executed and recorded before the commission of the illegal conduct from which the assets used to purchase or improve the property were derived or before the commission of any other crime upon which the forfeiture is based, or (2) the lender, at the time of the execution of the mortgage, did not know or was reasonably without cause to believe that the property was subject to forfeiture. However, there is no assurance that such a defense would be successful.

The certificates are obligations of the trust only.

The certificates will not represent an interest in or obligation of the depositor, the servicers, the sponsor, the underwriters, NC Capital Corporation, the trustee or any of their respective affiliates. Neither the certificates nor the underlying mortgage loans will be guaranteed or insured by any governmental agency or instrumentality or by the depositor, the servicers, the sponsor, the underwriters, the trustee or any of their respective affiliates. Proceeds of the assets included in the trust (including the interest rate swap agreement and the interest rate cap agreement for the benefit of the offered certificates) will be the sole source of payments on the certificates, and there will be no recourse to the depositor, the servicers, the sponsor, the underwriters, NC Capital Corporation, the trustee or any other entity in the event that such proceeds are insufficient or otherwise unavailable to make all payments provided for under the certificates.

Your investment may not be liquid.

The underwriters intend to make a secondary market in the offered certificates, but they will have no obligation to do so. There is no assurance that such a secondary market will develop or, if it develops, that it will continue. Consequently, you may not be able to sell your certificates readily or at prices that will enable you to realize your desired yield. The market values of the certificates are likely to fluctuate; these fluctuations may be significant and could result in significant losses to you.

The secondary markets for asset-backed securities have experienced periods of illiquidity and can be expected to do so in the future. Illiquidity means that there may not be any purchasers for the certificates you may purchase. Although any class of certificates may experience illiquidity, it is more likely that classes of certificates that are more sensitive to prepayment, credit or interest rate risk or that have been structured to meet the investment requirements of limited categories of investors, will experience illiquidity. You should consider that illiquidity may also result from legal or regulatory changes, or from the adoption or change of accounting rules, that affect some or all of the classes of the certificates generally or particular types of investors. Illiquidity can have a severely adverse effect on the prices of securities.

None of the offered certificates will constitute “mortgage related securities” for purposes of the Secondary Mortgage Market Enhancement Act of 1984, as amended. Accordingly, many institutions that lack the legal authority to invest in securities that do not constitute “mortgage related securities” will not be able to invest in the offered certificates, thereby limiting the market for those certificates. If your investment activities are subject to legal investment laws and regulations, regulatory capital requirements, or review by regulatory authorities, then you may be subject to restrictions on investment in the offered certificates. You should consult your own tax, accounting, legal and financial advisors for assistance in determining the suitability of and consequence to you of the purchase, ownership, and sale of the offered certificates. See “Legal Investment” in this free writing prospectus and in the prospectus.

The ratings on your certificates could be reduced or withdrawn.

Each rating agency rating the offered certificates may change or withdraw its initial ratings at any time in the future if, in its judgment, circumstances warrant a change. No person is obligated to maintain the ratings at their initial levels. If a rating agency qualifies, reduces or withdraws its rating on one or more classes of the offered certificates, the liquidity and market value of the affected certificates is likely to be reduced.

The servicing fee may be insufficient to engage a replacement servicer.

To the extent that this free writing prospectus indicates that the fee payable to the servicers is based on a fee rate that is a percentage of the outstanding mortgage loan balances, no assurance can be made that such fee rate in the future will be sufficient to attract a replacement servicer to accept an appointment. In addition, to the extent the mortgage pool of any series has amortized significantly at the time that a replacement servicer is sought, the aggregate fee that would be payable to any such replacement may not be sufficient to attract a replacement to accept an appointment.

The offered certificates may not be suitable investments.

The offered certificates are not suitable investments for any investor that requires a regular or predictable schedule of monthly payments or payment on any specific date. The offered certificates are complex investments that should be considered only by investors who, either alone or with their financial, accounting, tax and legal advisors, have the expertise to analyze the prepayment, reinvestment, default and market risk, the tax consequences of an investment and the interaction of these factors.

THE MORTGAGE LOAN POOL

The statistical information presented in this free writing prospectus concerning the mortgage loans to be transferred to the trust on the closing date is based on the pool of mortgage loans as of the cut-off date, which is January 1, 2007. Unless otherwise indicated in this free writing prospectus, the information regarding the mortgage loans set forth in this free writing prospectus that is based on the principal balance of the mortgage loans as of the cut-off date assumes the timely receipt of principal scheduled to be paid on the mortgage loans on or prior to the cut-off date and no delinquencies, defaults or prepayments from December 1, 2006 through the cut-off date. With respect to the mortgage loan pool as of the cut-off date, some amortization will occur prior to the closing date. Moreover, certain mortgage loans included in the mortgage loan pool as of the cut-off date may prepay in full, or may be determined not to meet the eligibility requirements for the final mortgage loan pool, and may not be included in the final mortgage loan pool, and certain other mortgage loans may be included in the final mortgage loan pool. As a result of the foregoing, the statistical distribution of characteristics as of the closing date for the final mortgage loan pool may vary somewhat from the statistical distribution of such characteristics as of the cut-off date as presented in this free writing prospectus, although such variance should not be material.

General

On the closing date it is expected that the trust will primarily consist of approximately 6,514 conventional, subprime, adjustable and fixed rate, first-lien and second-lien residential mortgage loans with original terms to maturity from the first scheduled payment due date of not more than 30 years, having an aggregate cut-off date balance (after giving effect to scheduled payments due on such date) of approximately $1,250,007,962. The mortgage loans in the trust were acquired by the sponsor, Morgan Stanley Mortgage Capital Inc., from NC Capital Corporation. Approximately 0.44% of the mortgage loans the sponsor purchased from NC Capital Corporation were subsequently transferred by the sponsor to Morgan Stanley Securitized Assets LLC. On the closing date, the sponsor and Morgan Stanley Securitized Assets LLC will sell 99.56% and 0.44%, respectively of the mortgage loans acquired by the trust to the depositor who will sell all of the mortgage loans to the trust.

The mortgage loans were originated or acquired generally in accordance with the underwriting guidelines described in this free writing prospectus. See “—Underwriting Guidelines” below. Because, in general, such underwriting guidelines do not conform to Fannie Mae or Freddie Mac guidelines, the mortgage loans are likely to experience higher rates of delinquency, foreclosure and bankruptcy than if they had been underwritten to a higher standard.

Approximately 2,418 (or approximately 22.36%) of the mortgage loans in the trust are fixed rate mortgage loans and approximately 4,096 (or approximately 77.64%) of the mortgage loans are adjustable rate mortgage loans, as described in more detail under “—Adjustable Rate Mortgage Loans” below. All of the mortgage loans have scheduled monthly payment due dates on the first day of the month. Interest on all of the mortgage loans accrues on the basis of a 360-day year consisting of twelve 30-day months.

Approximately 18.28% of the group I mortgage loans and approximately 19.61% of the group II mortgage loans have an initial interest-only period of up to seven years after the date of origination.

All of the mortgage loans are secured by first or second mortgages, deeds of trust or similar security instruments creating first-liens or second-liens on residential properties consisting of one- to four-family dwelling units, individual condominium units or individual units in planned unit developments.

Pursuant to its terms, each mortgage loan, other than a loan secured by a condominium unit, is required to be covered by a standard hazard insurance policy in an amount equal to the lower of the unpaid principal amount of that mortgage loan or the replacement value of the improvements on the related mortgaged property.

Generally, a condominium association is responsible for maintaining hazard insurance covering the entire building.

Approximately 42.28% of the mortgage loans have loan-to-value ratios at origination, or with respect to second-lien mortgage loans, combined loan-to-value ratios at origination, in excess of 80%. None of the mortgage loans have loan-to-value ratios at origination, or with respect to second-lien mortgage loans, combined loan-to-value ratios at origination, in excess of 100%. The “loan-to-value ratio” of a mortgage loan at any time is the ratio of the principal balance of such mortgage loan at the date of determination to (a) in the case of a purchase, the lesser of the sale price of the mortgaged property and its appraised value at the time of sale or (b) in the case of a refinancing or modification, the appraised value of the mortgaged property at the time of the refinancing or modification. The “combined loan-to-value ratio” of a mortgage loan at any time is the ratio of the principal balance of the second-lien mortgage loan, together with the outstanding balance of the related first-lien mortgage loan, at the date of determination to (a) in the case of a purchase, the lesser of the sale price of the mortgaged property and its appraised value at the time of sale or (b) in the case of a refinancing or modification, the appraised value of the mortgaged property at the time of the refinancing or modification.

Approximately [__] mortgage loans with an aggregate principal balance as of the cut-off date of $[__], which will represent no more than approximately 1.00% of the mortgage loans in the final mortgage loan pool, were more than 30 days but less than 60 days Delinquent with respect to their scheduled monthly payments.

Approximately 55.14% of the mortgage loans are fully amortizing, and approximately 44.86% of the mortgage loans are balloon mortgage loans that have substantial principal payments due on their stated maturity dates. Approximately 19.17% of the mortgage loans are interest-only for a period of time.

Prepayment Premiums

Approximately 73.73% of the mortgage loans provide for payment by the borrower of a prepayment premium (each, a “Prepayment Premium”) in connection with certain full or partial prepayments of principal. Generally, each such mortgage loan provides for payment of a Prepayment Premium in connection with certain voluntary, full or partial prepayments made within the period of time specified in the related mortgage note, ranging from one to three years from the date of origination of such mortgage loan, or the penalty period, as described in this free writing prospectus. The amount of the applicable Prepayment Premium, to the extent permitted under applicable federal or state law, is as provided in the related mortgage note. Generally, this amount is equal to six months interest on any amounts prepaid in excess of 20% of the original principal balance of the related mortgage loan during any 12-month period during the applicable penalty period. No mortgage loan imposes a Prepayment Premium for a term in excess of three years. Prepayment Premiums collected from borrowers will be paid to the holders of the Class P certificates and will not be available for payment to the offered certificates.

Each servicer may waive (or permit a subservicer to waive) a Prepayment Premium in accordance with the pooling and servicing agreement if (i) such waiver relates to a default or reasonably foreseeable default and would, in such servicer’s reasonable judgment, maximize recoveries on the related mortgage loan, (ii) the Prepayment Premium may not be collected under applicable federal, state or local law or regulation, or (iii) the collection of the Prepayment Premium would be considered “predatory” pursuant to written guidance published or issued by any applicable federal, state or local regulatory authority acting in its official capacity and having jurisdiction over such matters.

Adjustable Rate Mortgage Loans

All of the adjustable rate mortgage loans provide for semi-annual adjustment of the related interest rate based on the Loan Index (as described below under “—The Index”) as specified in the related mortgage note, and for corresponding adjustments to the monthly payment amount, in each case on each applicable adjustment date (each such date, an “Adjustment Date”).

The first adjustment of the interest rates for approximately 86.31% of the adjustable rate mortgage loans will occur after an initial period of approximately two years following origination (the “2/28 Adjustable Rate Mortgage Loans”), in the case of approximately 12.78% of the adjustable rate mortgage loans, approximately three years following origination (the “3/27 Adjustable Rate Mortgage Loans”) or in the case of approximately 0.91% of the adjustable rate mortgage loans, approximately five years following origination (the “5/25 Adjustable Rate Mortgage Loans”).

On each Adjustment Date for an adjustable rate mortgage loan, the interest rate will be adjusted to equal the sum, rounded generally to the nearest multiple of 1/8% of the Loan Index and a fixed percentage amount (the “Gross Margin”), provided, that, in the substantial majority of cases, the interest rate on each such adjustable rate mortgage loan will not increase or decrease by more than a fixed percentage (ranging from 1.000% to 1.500%) specified in the related mortgage note (the “Periodic Cap”) on any related Adjustment Date, except in the case of the first such Adjustment Date, and will not exceed a specified maximum interest rate over the life of such mortgage loan (the “Maximum Rate”) or be less than a specified minimum interest rate over the life of such mortgage loan (the “Minimum Rate”). The interest rate generally will not increase or decrease on the first Adjustment Date by more than a fixed percentage specified in the related mortgage note (the “Initial Cap”); the Initial Caps range from 1.000% to 2.000% for the adjustable rate mortgage loans. Effective with the first monthly payment due on each adjustable rate mortgage loan after each related Adjustment Date or, with respect to the adjustable rate, interest-only mortgage loans - which have initial periods in which payments of only interest are required to be made - following the interest-only period, the monthly payment amount will be adjusted to an amount that will amortize fully the outstanding principal balance of the related mortgage loan over its remaining term, and pay interest at the interest rate as so adjusted. Due to the application of the Initial Caps, Periodic Caps, and Maximum Rates, the interest rate on each such adjustable rate mortgage loan, as adjusted on any related Adjustment Date, may be less than the sum of the Loan Index and the related Gross Margin, rounded as described in this free writing prospectus. See “—The Index” below. The adjustable rate mortgage loans generally do not permit the related borrowers to convert their adjustable interest rate to a fixed interest rate.

The Index

The index used in determining the interest rates of the adjustable rate mortgage loans is the average of the interbank offered rates for six-month United States dollar deposits in the London market, calculated as provided in the related mortgage note (the “Loan Index”), as most recently available either as of (1) the first business day occurring in a specified period of time prior to such Adjustment Date, (2) the first business day of the month preceding the month of such Adjustment Date or (3) the last business day of the second month preceding the month in which such Adjustment Date occurs, as specified in the related mortgage note. In the event that the Loan Index becomes unavailable or otherwise unpublished, the applicable servicer will select a comparable alternative index over which it has no direct control and which is readily verifiable.

Underwriting Guidelines

The information set forth in this section (other than the immediately following paragraph) regarding the underwriting standards of New Century Mortgage Corporation (“New Century” or the “Originator”) has been provided by New Century to the depositor.

NC Capital transferred the mortgage loans it sold to the sponsor, which mortgage loans NC Capital had acquired from New Century. New Century is a wholly-owned subsidiary of New Century Financial Corporation, a publicly traded company. Founded in 1995 and headquartered in Irvine, California, New Century Financial Corporation is a real estate investment trust and one of the nation’s premier full service mortgage finance companies, providing first and second mortgage products to borrowers nationwide. New Century Financial Corporation offers a broad range of mortgage products designed to meet the needs of all borrowers.

New Century is a consumer finance and mortgage banking company that originates, purchases, sells and services first-lien and second-lien mortgage loans and other consumer loans. New Century emphasizes the origination of mortgage loans that are commonly referred to as non-conforming “B&C” loans or subprime loans.

As of September 30, 2006, New Century Financial Corporation employed approximately 7,100 associates and originated loans through its wholesale network of more than 55,000 independent mortgage brokers through 33 regional processing centers operating in 19 states. Its retail network operates through 235 sales offices in 36 states. For the nine months ending September 30, 2006, New Century Financial Corporation originated $45.4 billion in mortgage loans.

Underwriting Standards. The mortgage loans originated or acquired by New Century were done so in accordance with the underwriting guidelines established by it (collectively, the “New Century Underwriting Guidelines”). The following is a general summary of the New Century Underwriting Guidelines as generally applied, with some variation, by New Century. This summary does not purport to be a complete description of the underwriting standards of New Century.

The New Century Underwriting Guidelines are primarily intended to assess the borrower’s ability to repay the related mortgage loan, to assess the value of the mortgaged property and to evaluate the adequacy of the property as collateral for the mortgage loan. All of the mortgage loans were also underwritten with a view toward the resale of the mortgage loans in the secondary mortgage market. While New Century’s primary consideration in underwriting a mortgage loan is the value of the mortgaged property, New Century also considers, among other things, a mortgagor’s credit history, repayment ability and debt service-to-income ratio, as well as the type and use of the mortgaged property. The mortgage loans, in most cases, bear higher rates of interest than mortgage loans that are originated in accordance with Fannie Mae and Freddie Mac standards, which is likely to result in rates of delinquencies and foreclosures that are higher, and that may be substantially higher, than those experienced by portfolios of mortgage loans underwritten in a more traditional manner. As a result of New Century’s underwriting criteria, changes in the values of the related Mortgaged Properties may have a greater effect on the delinquency, foreclosure and loss experience on the mortgage loans than these changes would be expected to have on mortgage loans that are originated in a more traditional manner. No assurance can be given that the values of the related Mortgaged Properties have remained or will remain at the levels in effect on the dates of origination of the related mortgage loans. In addition, there can be no assurance that the value of the related Mortgaged Property estimated in any appraisal or review is equal to the actual value of that Mortgaged Property at the time of that appraisal or review.

The mortgage loans will have been originated in accordance with the New Century Underwriting Guidelines. On a case-by-case basis, exceptions to the New Century Underwriting Guidelines are made where compensating factors exist. It is expected that a substantial portion of the mortgage loans will represent these exceptions.

Each applicant completes an application that includes information with respect to the applicant’s liabilities, income, credit history, employment history and personal information. The New Century Underwriting Guidelines require a credit report on each applicant from a credit reporting company. The report typically contains information relating to matters such as credit history with local and national merchants and lenders, installment debt payments and any record of defaults, bankruptcies, repossessions or judgments. Mortgaged properties that are to secure mortgage loans generally are appraised by qualified independent appraisers. These appraisers inspect and appraise the subject property and verify that the property is in acceptable condition. Following each appraisal, the appraiser prepares a report that includes a market value analysis based on recent sales of comparable homes in the area and, when deemed appropriate, replacement cost analysis based on the current cost of constructing a similar home. All appraisals are required to conform to the Uniform Standards of Professional Appraisal Practice adopted by the Appraisal Standards Board of the Appraisal Foundation and are generally on forms acceptable to Fannie Mae and Freddie Mac. The New Century Underwriting Guidelines require a review of the appraisal by a qualified employee of New Century or by an appraiser retained by New Century. New Century uses the value as determined by the review in computing the loan-to-value ratio of the related mortgage loan if the appraised value of a mortgaged property, as determined by a review, is (i) more than 10% greater but less than or equal to 25% lower than the value as determined by the appraisal for mortgage loans having a loan-to-value ratio or a combined loan-to-value ratio of up to 90%, and (ii) more than 5% greater but less than or equal to 25% lower than the value as determined by the appraisal for mortgage loans having a loan-to-value ratio or a combined loan-to-value ratio of between 91-95%. For mortgage loans having a loan-to-value ratio or a combined loan-to-value ratio greater than 95%, the appraised value as determined by the review is used in computing the loan-to-value ratio of the related mortgage loan. If the appraised value of a mortgaged property as determined by a review is 25% or more lower than the value as determined by the appraisal, then New Century obtains a new appraisal and repeats the review process.

The mortgage loans were originated consistent with and generally conform to the New Century Underwriting Guidelines’ full documentation, limited documentation and stated income documentation residential loan programs. Under each of the programs, New Century reviews the applicant’s source of income, calculates the amount of income from sources indicated on the loan application or similar documentation, reviews the credit history of the applicant, calculates the debt service-to-income ratio to determine the applicant’s ability to repay the loan, reviews the type and use of the property being financed, and reviews the property. In determining the ability of the applicant to repay the loan, a qualifying rate has been created under the New Century Underwriting Guidelines that generally is equal to the interest rate on that loan. The New Century Underwriting Guidelines require that mortgage loans be underwritten in a standardized procedure which complies with applicable federal and state laws and regulations and requires New Century’s underwriters to be satisfied that the value of the property being financed, as indicated by an appraisal and a review of the appraisal, currently supports the outstanding loan balance. In general, the maximum loan amount for mortgage loans originated under the programs is $1,500,000 (additional requirements may be imposed in connection with mortgage loans in excess of $1,500,000). The New Century Underwriting Guidelines generally permit loans on one- to four-family residential properties to have a loan-to-value ratio at origination of up to 95% with respect to first liens loans. The maximum loan-to-value ratio depends on, among other things, the purpose of the mortgage loan, a borrower’s credit history, home ownership history, mortgage payment history or rental payment history, repayment ability and debt service-to-income ratio, as well as the type and use of the property. With respect to mortgage loans secured by mortgaged properties acquired by a mortgagor under a “lease option purchase,” the loan-to-value ratio of the related mortgage loan is based on the appraised value at the time of origination of the mortgage loan.

The New Century Underwriting Guidelines require that the income of each applicant for a mortgage loan under the full documentation program be verified. The specific income documentation required for New Century’s various programs is as follows: under the full documentation program, applicants usually are required to submit one written form of verification of stable income for at least 12 months from the applicant’s employer for salaried employees and 24 months for self-employed applicants; under the limited documentation program, applicants usually are required to submit verification of stable income for at least 6 months, such as 6 consecutive months of complete personal checking account bank statements, and under the stated income documentation program, an applicant may be qualified based upon monthly income as stated on the mortgage loan application if the applicant meets certain criteria. All the foregoing programs require that, with respect to salaried employees, there be a telephone verification of the applicant’s employment. Verification of the source of funds, if any, that are required to be deposited by the applicant into escrow in the case of a purchase money loan is required.

In evaluating the credit quality of borrowers, New Century utilizes credit bureau risk scores, or a FICO score, a statistical ranking of likely future credit performance developed by Fair, Isaac & Company and the three national credit data repositories: Equifax, TransUnion and Experian.

The New Century Underwriting Guidelines have the following categories and criteria for grading the potential likelihood that an applicant will satisfy the repayment obligations of a mortgage loan:

“AA” Risk. Under the “AA” risk category, the applicant must have a FICO score of 500, or greater, based on loan-to-value ratio and loan amount. Two or more tradelines (one of which with 24 months history and no late payments) are required for loan-to-value ratios above 90%. The borrower must have no late mortgage payments within the last 12 months on an existing mortgage loan. An existing mortgage loan must be less than 60 days late at the time of funding of the loan. No bankruptcy may have occurred during the preceding year for borrowers with a FICO score of less than 550; provided, however, that a Chapter 7 bankruptcy for a borrower with a FICO score in excess of 550 (or 580 under the stated income documentation program) may have occurred as long as such bankruptcy is discharged at least one day prior to funding of the loan. A maximum loan-to-value ratio of 80% is permitted with respect to borrowers with a FICO score less than or equal to 550 (or 580 with respect to stated income documentation programs) with Chapter 7 bankruptcy, which Chapter 7 bankruptcy is discharged at least one day prior to loan funding. A borrower in Chapter 13 bankruptcy may discharge such bankruptcy with the proceeds of the borrower’s loan (any such loan may not exceed a 90% loan-to-value ratio), provided that such borrower has a FICO score of at least 550, or 80% loan-to-value ratio provided that such borrower has a FICO score of less than 550). No notice of default filings or foreclosures (or submission of deeds in lieu of foreclosure) may have occurred during the preceding two years. The mortgaged property must be in at least average condition. A maximum loan-to-value ratio of 95% is permitted for a mortgage loan on an owner occupied single family or two unit property. A maximum loan-to-value ratio of 90% is permitted for a mortgage loan on a non-owner occupied single family or two unit property or a three to four family residential property. The maximum loan-to-value ratio for owner occupied rural, remote or unique properties and non-owner occupied three to four family residential properties or high-rise condominiums is 85%. The maximum loan-to-value ratio for non-owner occupied rural, remote or unique properties is 80%. The maximum combined loan-to-value ratio, including any related subordinate lien, is 100%, for either a refinance loan or a purchase money loan. The maximum debt service-to-income ratio is usually 50% unless the loan-to-value ratio is reduced.

“A+” Risk. Under the “A+” risk category, the applicant must have a FICO score of 500, or greater, based on loan-to-value ratio and loan amount. Two or more tradelines (one of which with 24 months history and no late payments), are required for loan-to-value ratios above 90%. A maximum of one 30 day late payment within the last 12 months is acceptable on an existing mortgage loan. An existing mortgage loan must be less than 60 days late at the time of funding of the loan. No bankruptcy may have occurred during the preceding year for borrowers with FICO scores of less than 550; provided, however, that a Chapter 7 bankruptcy for a borrower with a FICO score in excess of 550 (or 580 under the stated income documentation program) may have occurred as long as such bankruptcy is discharged at least one day prior to funding of the loan. A maximum loan-to-value ratio of 80% is permitted with respect to borrowers with a FICO score less than or equal to 550 (or 580 with respect to stated income documentation programs) with Chapter 7 bankruptcy, which Chapter 7 bankruptcy is discharged at least one day prior to loan funding. A borrower in Chapter 13 bankruptcy may discharge such bankruptcy with the proceeds of the borrower’s loan (any such loan may not exceed a 90% loan-to-value ratio), provided that such borrower has a FICO score of at least 550 or 80% loan-to-value ratio provided that such borrower has a FICO score of less than 550). No notice of default filings or foreclosures (or submission of deeds in lieu of foreclosure) may have occurred during the preceding two years. The mortgaged property must be in at least average condition. A maximum loan-to-value ratio of 95% (or 90% for mortgage loans originated under the stated income documentation program) is permitted for a mortgage loan on an owner occupied single family or two unit property. A maximum loan-to-value ratio of 90% (or 85% for mortgage loans originated under the stated income documentation program) is permitted for a mortgage loan on a non -owner occupied property single family or two unit property or a three to four family residential property. The maximum loan-to-value ratio for owner occupied rural, remote or unique properties and a non-owner occupied three to four family residential property is 85% (or 80% for mortgage loans originated under the stated income documentation program). The maximum loan-to-value ratio for non-owner occupied rural, remote or unique properties is 80% (or 75% for mortgage loans originated under the stated income documentation program). The maximum combined loan-to-value ratio, including any related subordinate lien, is 100%, for either a refinance loan or a purchase money loan. The maximum debt service-to-income ratio is usually 50% unless the loan-to-value ratio is reduced.

“A-” Risk. Under the “A-” risk category, an applicant must have a FICO score of 500, or greater, based on loan-to-value ratio and loan amount. A maximum of three 30 day late payments within the last 12 months is acceptable on an existing mortgage loan. An existing mortgage loan must be less than 60 days late at the time of funding of the loan. No bankruptcy may have occurred during the preceding year for borrowers with FICO scores of less than 550; provided, however, that a Chapter 7 bankruptcy for a borrower with a FICO score in excess of 550 (or 580 under the stated income documentation program) may have occurred as long as such bankruptcy is discharged at least one day prior to funding of the loan. A maximum loan-to-value ratio of 80% is permitted with respect to borrowers with a FICO score less than or equal to 550 (or 580 with respect to stated income documentation programs) with Chapter 7 bankruptcy, which Chapter 7 bankruptcy is discharged at least one day prior to loan funding. A borrower in Chapter 13 bankruptcy may discharge such bankruptcy with the proceeds of the borrower’s loan (any such loan may not exceed a 90% loan-to-value ratio), provided that such borrower has a FICO score of at least 550 or 80% loan-to-value ratio provided that such borrower has a FICO score of less than 550). No notice of default filings or foreclosures (or submission of deeds in lieu of foreclosure) may have occurred during the preceding two years. The mortgaged property must be in at least average condition. A maximum loan-to-value ratio of 95% (or 85% for mortgage loans originated under the stated income documentation program) is permitted for a mortgage loan on an owner occupied single family or two unit property. A maximum loan-to-value ratio of 90% (or 85% for mortgage loans originated under the stated income documentation program) is permitted for a mortgage loan on a non-owner occupied single family or two unit property or three to four family residential property. The maximum loan-to-value ratio for owner occupied rural, remote or unique properties, and non-owner occupied three to four family residential properties is 85% (or 80% for mortgage loans originated under the stated income documentation program). The maximum loan-to-value ratio for a non-owner occupied rural, remote or unique property is 80% (or 70% for mortgage loans originated under the stated income documentation program). The maximum combined loan-to-value ratio, including any related subordinate lien, is 100%, for a refinance loan and 100%, for a purchase money loan. The maximum debt service-to-income ratio is usually 50% unless the loan-to-value ratio is reduced.

“B” Risk. Under the “B” risk category, an applicant must have a FICO score of 500, or greater, based on loan-to-value ratio and loan amount. Unlimited 30 day late payments and a maximum of one 60 day late payment within the last 12 months is acceptable on an existing mortgage loan. An existing mortgage loan must be less than 90 days late at the time of funding of the loan. No bankruptcy may have occurred during the preceding year for borrowers with a FICO score less than or equal to 550; provided, however, that a Chapter 7 bankruptcy for a borrower with a FICO score in excess of 550 may have occurred as long as such bankruptcy has been discharged at least one day prior to funding of the loan. A borrower in Chapter 13 bankruptcy may discharge such bankruptcy with the proceeds of the borrower’s loan (such loan may not exceed an 80% loan-to-value ratio for borrowers with a FICO score of less than 550). No notice of default filings or foreclosures (or submission of deeds in lieu of foreclosure) may have occurred during the preceding 18 months. The mortgaged property must be in at least average condition. A maximum loan-to-value ratio of 90% (or 80% for mortgage loans originated under the stated income documentation program), is permitted for a mortgage loan on an owner occupied singe family or two unit property. A maximum loan-to-value ratio of 85% (or 75% for mortgage loans originated under the stated income documentation program) is permitted for a mortgage loan on a non-owner occupied single family or two unit property or a three to four family residential property. The maximum loan-to-value ratio for owner occupied rural, remote or unique properties, and a non-owner occupied three to four family property is 80% (or 70% for mortgage loans originated under the stated income documentation program). The maximum loan-to-value ratio for a non-owner occupied rural, remote or unique property is 75% (or 65% for mortgage loans originated under the stated income documentation program). The maximum combined loan-to-value ratio, including any related subordinate lien, is 100%, for a refinance loan and for a purchase money loan. The maximum debt service-to-income ratio is usually 50%, unless the loan-to-value ratio is reduced.

“C” Risk. Under the “C” risk category, an applicant must have a FICO score of 500, or greater, based on loan-to-value ratio and loan amount. Unlimited 30 day and 60 day late payments and a maximum of one 90 day late payment within the last 12 months is acceptable on an existing mortgage loan. An existing mortgage loan must be less than 120 days late at the time of funding of the loan. All bankruptcies must be discharged at least one day prior to funding of the loan; provided, however, that Chapter 13 bankruptcies may be discharged with loan proceeds. No notice of default filings may have occurred during the preceding 12 months. The mortgaged property must be in at least average condition. In most cases, a maximum loan-to-value ratio of 80% (or 75% for mortgage loans originated under the stated income documentation program) for a mortgage loan on an owner occupied single family or two unit property is permitted. A maximum loan-to-value ratio of 75% is permitted for a mortgage loan on a non-owner occupied single family or 2 unit property (refinance only) or three to four family residential property (or 70% for mortgage loans originated under the stated income documentation program). The maximum loan-to-value ratio for owner occupied rural, remote or unique properties, and non-owner occupied three to four family residential properties is 70% (or 65% for mortgages originated under the stated income documentation program). The maximum loan-to-value ratio for a non-owner occupied rural, remote or unique property (refinance only) is 65% (or 60% for mortgage loans originated under the stated income documentation program). The maximum combined loan-to-value ratio, including any related subordinate lien, is 85% for a refinance loan and for a purchase money loan. The maximum debt service-to-income ratio is usually 50% unless the loan-to-value ratio is reduced.

“C-” Risk. Under the “C-” risk category, an applicant must have a FICO score of 500, or greater. Unlimited 30, 60 and 90 day late payments and a maximum of one 120 day late payment is acceptable on an existing mortgage loan. An existing mortgage loan must be less than 150 days late at the time of funding of the loan. There may be no current notice of default and all bankruptcies must be discharged at least one day prior to funding of the loan; provided, however, that Chapter 13 bankruptcies may be discharged with loan proceeds. The mortgaged property must be in at least average condition. A maximum loan-to-value ratio of 70% (55% for mortgage loans originated under the stated income documentation program), is permitted for a mortgage loan on a owner occupied single family or two unit property. A maximum loan-to-value ratio of 65% is permitted for a mortgage loan on a non-owner occupied property single family or two unit property (refinance only), and an owner occupied high-rise condominium or a three to four family residential property (50% for a mortgage loan on a non -owner occupied property, an owner occupied high-rise condominium or a three to four family residential property originated under the stated income documentation program). Rural, remote or unique properties are not allowed. The maximum combined loan-to-value ratio, including any related subordinate lien, is 80% for a refinance loan and 80% for a purchase money loan. The maximum debt service-to-income ratio is usually 55%.

Special Programs. New Century originates loans which it calls “special programs” to enable borrowers with higher FICO scores and good mortgage histories, the ability to obtain larger loan amounts or higher loan-to-value ratios. Special programs extend loan-to-value ratios to a maximum of 100%, and combined 80/20 (first/second) loan combinations to 100% CLTV and loan amounts to $1,500,000 with higher minimum FICO scores and paid-as-agreed minimum tradeline requirements. No bankruptcy filing may have occurred during the preceding two years for borrowers with FICO scores less than 600, under the full income documentation program, or 620, under the limited income, and 640 under the stated income documentation programs (Chapter 13 bankruptcies may not be paid off with loan proceeds) for combined 80%/20% (first/second) loan combinations. For first mortgage loans having 100% loan-to-value ratios, no bankruptcy filing may have occurred during the preceding two years. No notice of default filings may have occurred during the preceding two years. The mortgaged property must be in at least average condition. The maximum combined loan-to-value ratio, including any related subordinate lien, is 100%, for either a refinance loan or a purchase money loan. The maximum debt service-to-income ratio is usually 50%.

Exceptions. As described above, the foregoing categories and criteria are guidelines only. On a case by case basis, it may be determined that an applicant warrants a debt service-to-income ratio exception, a pricing exception, a loan-to-value ratio exception, an exception from certain requirements of a particular risk category, etc. An exception may be allowed if the application reflects compensating factors, such as: low loan-to-value ratio; a maximum of one 30 day late payment on all mortgage loans during the last 12 months; and stable employment or ownership of current residence of four or more years. An exception may also be allowed if the applicant places a down payment through escrow of at least 20% of the purchase price of the mortgaged property or if the new loan reduces the applicant’s monthly aggregate mortgage payment by 25% or more. Accordingly, a mortgagor may qualify in a more favorable risk category than, in the absence of compensating factors, would satisfy only the criteria of a less favorable risk category. It is expected that a substantial portion of the mortgage loans will represent these kinds of exceptions.

The Mortgage Loans in the Aggregate

The mortgage loans are expected to have the following approximate aggregate characteristics as of the cut-off date:

Cut-off date principal balance of the mortgage loans	$1,250,007,962
Cut-off date principal balance of the fixed rate mortgage loans	$279,449,661
Cut-off date principal balance of the adjustable rate mortgage loans	$970,558,301
Interest Rates:
Weighted Average	8.366%
Range	5.575% to 14.700%
Weighted average stated remaining term to maturity (in months)	355

The scheduled principal balances of the mortgage loans range from approximately $14,901 to approximately $970,000. The mortgage loans had an average scheduled principal balance of approximately $191,896.

The weighted average loan-to-value ratio (or, with respect to second-lien mortgage loans, combined loan-to-value ratio) at origination of the mortgage loans is approximately 81.04% and approximately 42.28% of the mortgage loans have loan-to-value ratios (or, with respect to second-lien mortgage loans, combined loan-to-value ratios) at origination exceeding 80.00%.

Approximately 94.20% of the mortgage loans are secured by first liens. Approximately 5.80% of the mortgage loans are secured by second liens.

No more than approximately 0.37% of the mortgage loans are secured by mortgaged properties located in any one zip code area.

None of the mortgage loans has a Prepayment Premium period at origination in excess of three years.

NC Capital has represented or will represent with respect to each mortgage loan sold by it that

·   none of the group I mortgage loans sold by it is (a) covered by the Home Ownership and Equity Protection Act of 1994 or (b) classified as a “high cost home,” “threshold,” “covered,” “high risk home” or “predatory” loan under any other applicable federal, state or local law; and

·   in connection with the origination of the group I mortgage loans, no proceeds from a group I mortgage loan were used to finance a single-premium credit life insurance policy.

See “Description of the Certificates-Representations and Warranties Relating to the Mortgage Loans” in this free writing prospectus.

The tables on Annex IV attached to this free writing prospectus set forth certain statistical information with respect to the mortgage loans in the aggregate. Due to rounding, the percentages shown may not precisely total 100.00%.

The Group I Mortgage Loans

The group I mortgage loans are expected to have the following approximate aggregate characteristics as of the cut-off date:

Cut-off date principal balance of group I mortgage loans	$413,624,662
Cut-off date principal balance of group I fixed rate mortgage loans	$91,886,654
Cut-off date principal balance of group I adjustable rate mortgage loans	$321,738,008
Interest Rates:
Weighted Average	8.447%
Range	5.625% to 14.700%
Weighted average stated remaining term to maturity (in months)	355

The scheduled principal balances of the group I mortgage loans range from approximately $14,901 to approximately $588,602. The group I mortgage loans had an average scheduled principal balance of approximately $172,415.

The weighted average loan-to-value ratio (or, with respect to second-lien mortgage loans, combined loan-to-value ratio) at origination of the group I mortgage loans is approximately 79.20% and approximately 43.11% of the group I mortgage loans have loan-to-value ratios (or, with respect to second-lien mortgage loans, combined loan-to-value ratios) at origination exceeding 80.00%.

Approximately 96.58% of the group I mortgage loans are secured by first liens. Approximately 3.42% of the group I mortgage loans are secured by second liens.

No more than approximately 0.71% of the group I mortgage loans are secured by mortgaged properties located in any one zip code area.

None of the group I mortgage loans has a Prepayment Premium period at origination in excess of three years.

The tables on Annex IV attached to this free writing prospectus set forth certain statistical information with respect to the group I mortgage loans. Due to rounding, the percentages shown may not precisely total 100.00%.

The Group II Mortgage Loans

The group II mortgage loans are expected to have the following approximate aggregate characteristics as of the cut-off date:

Cut-off date principal balance of group II mortgage loans	$836,383,300
Cut-off date principal balance of group II fixed rate mortgage loans	$187,563,007
Cut-off date principal balance of group II adjustable rate mortgage loans	$648,820,293
Interest Rates:
Weighted Average	8.326%
Range	5.575% to 14.500%
Weighted average stated remaining term to maturity (in months)	355

The scheduled principal balances of the group II mortgage loans range from approximately $14,939 to approximately $970,000. The group II mortgage loans had an average scheduled principal balance of approximately $203,252.

The weighted average loan-to-value ratio (or, with respect to second-lien mortgage loans, combined loan-to-value ratio) at origination of the group II mortgage loans is approximately 81.94% and approximately 41.87% of the group II mortgage loans have loan-to-value ratios (or, with respect to second-lien mortgage loans, combined loan-to-value ratios) at origination exceeding 80.00%.

Approximately 93.02% of the group II mortgage loans are secured by first liens. Approximately 6.98% of the group II mortgage loans are secured by second liens.

No more than approximately 0.40% of the group II mortgage loans are secured by mortgaged properties located in any one zip code area.

None of the group II mortgage loans has a Prepayment Premium period at origination in excess of three years.

The tables on Annex IV attached to this free writing prospectus set forth certain statistical information with respect to the group II mortgage loans. Due to rounding, the percentages shown may not precisely total 100.00%.

Credit Scores

Credit scores are obtained by many lenders in connection with mortgage loan applications to help them assess a borrower’s creditworthiness (the “Credit Scores”). Credit Scores are generated by models developed by a third party which analyzed data on consumers in order to establish patterns which are believed to be indicative of the borrower’s probability of default. The Credit Score is based on a borrower’s historical credit data, including, among other things, payment history, delinquencies on accounts, levels of outstanding indebtedness, length of credit history, types of credit, and bankruptcy experience. Credit Scores range from approximately 250 to approximately 900, with higher scores indicating an individual with a more favorable credit history compared to an individual with a lower score. However, a Credit Score purports only to be a measurement of the relative degree of risk a borrower represents to a lender, i.e., a borrower with a higher score is statistically expected to be less likely to default in payment than a borrower with a lower score. Lenders have varying ways of determining Credit Scores and, as a result, the determination of Credit Scores across the industry is not consistent. In addition, it should be noted that Credit Scores were developed to indicate a level of default probability over a two-year period, which does not correspond to the life of a mortgage loan. Furthermore, Credit Scores were not developed specifically for use in connection with mortgage loans, but for consumer loans in general, and assess only the borrower’s past credit history. Therefore, a Credit Score does not take into consideration the effect of mortgage loan characteristics (which may differ from consumer loan characteristics) on the probability of repayment by the borrower. There can be no assurance that the Credit Scores of the mortgagors will be an accurate predictor of the likelihood of repayment of the related mortgage loans.

The tables on Annex IV attached to this free writing prospectus set forth information as to the Credit Scores of the related mortgagors obtained in connection with the origination of each mortgage loan.

THE SPONSOR

The sponsor is Morgan Stanley Mortgage Capital Inc., a New York corporation (“MSMC”). MSMC is an affiliate, through common parent ownership, of Morgan Stanley Capital Services Inc., the interest rate swap provider and the interest rate cap provider, Morgan Stanley Securitized Assets LLC (“MSSA”), a seller of mortgage loans to the depositor, and Morgan Stanley & Co. Incorporated, an underwriter. MSMC is also an affiliate of the depositor and a direct, wholly-owned subsidiary of Morgan Stanley (NYSE:MS). As a result of a merger, completed on December 4, 2006, between a subsidiary of MSMC and Saxon Capital, Inc., MSMC is an affiliate, through common parent ownership, of Saxon Mortgage Services, Inc., one of the servicers. The executive offices of MSMC are located at 1585 Broadway, New York, New York 10036, telephone number (212) 761-4000. MSMC provides warehouse and repurchase financing to mortgage lenders and purchases closed, first- and subordinate-lien residential mortgage loans for securitization or resale, or for its own investment. MSMC also originates commercial mortgage loans. MSMC does not currently service loans. Instead, MSMC contracts with other entities to service the loans on its behalf.

MSMC acquires residential mortgage loans through bulk purchases and also through purchases of single loans through MSMC’s conduit loan purchase program. The mortgage loans purchased through its conduit program generally conform to the conduit origination standards.

Prior to acquiring any residential mortgage loans, MSMC conducts a review of the related mortgage loan seller that is based upon the credit quality of the selling institution. MSMC’s review process may include reviewing select financial information for credit and risk assessment and conducting an underwriting guideline review, senior level management discussion and/or background checks. The scope of the mortgage loan due diligence varies based on the credit quality of the mortgage loans.

The underwriting guideline review entails a review of the mortgage loan origination processes and systems. In addition, such review may involve a consideration of corporate policy and procedures relating to state and federal predatory lending, origination practices by jurisdiction, historical loan level loss experience, quality control practices, significant litigation and/or material investors.

As mentioned above, MSMC currently contracts with third party servicers for servicing the mortgage loans that it originates or acquires. Third party servicers are also assessed based upon the servicing rating and the credit quality of the servicing institution. The servicers may be reviewed for their systems and reporting capabilities, review of collection procedures and confirmation of servicers’ ability to provide loan-level data. In addition, MSMC may conduct background checks, meet with senior management to determine whether the servicer complies with industry standards or otherwise monitor the servicer on an ongoing basis.

MSMC has been the sponsor or co-sponsor of securitizations backed by residential mortgage loans, including subprime mortgage loans, since 2000. The following table sets forth the approximate aggregate scheduled principal balance, as of the applicable cut-off date, of mortgage loans transferred by MSMC or its affiliates to subprime mortgage loan securitizations sponsored or co-sponsored by MSMC since 2000.

Year	Approximate Initial Principal Amount of Securities
2000	$	0.36 billion
2001	$	2.65 billion
2002	$	8.24 billion
2003	$	11.32 billion
2004	$	27.02 billion
2005	$	23.09 billion
2006	$	29.99 billion

As a sponsor or co-sponsor, MSMC acquires mortgage loans and initiates their securitization by transferring the mortgage loans to the depositor or another entity that acts in a similar capacity as the depositor, which mortgage loans will ultimately be transferred to the issuing entity for the related securitization. In coordination with Morgan Stanley & Co. Incorporated, MSMC works with rating agencies, co-sponsors, other underwriters (if any), mortgage loan sellers and servicers in structuring the securitization transaction.

STATIC POOL INFORMATION

Information concerning MSMC’s prior residential mortgage loan securitizations involving fixed- and adjustable-rate subprime mortgage loans secured by first- or second-lien mortgages or deeds of trust in residential real properties issued by the depositor is available on the internet at

http://www.morganstanley.com/institutional/ abs_spi/Subprime.html. On this website, you can view for each of these securitizations, summary pool information as of the applicable securitization cut-off date and delinquency, cumulative loss, and prepayment information as of each distribution date by securitization for the past five years, or since the applicable securitization closing date if the applicable securitization closing date occurred less than five years from the date of this free writing prospectus. These prior transactions include, among other transactions, prior securitizations of the sponsor of mortgage loans purchased from NC Capital (see, in particular, those securitizations with a “NC” series designation). Each of the mortgage loan securitizations identified on this website is unique, and the characteristics of each securitized mortgage loan pool varies from each other as well as from the mortgage loans to be included in the trust that will issue the certificates offered by this free writing prospectus. In addition, the performance information relating to the prior securitizations described above may have been influenced by factors beyond the sponsor’s control, such as housing prices and market interest rates. Therefore, the performance of these prior mortgage loan securitizations is likely not to be indicative of the future performance of the mortgage loans to be included in the trust related to this offering.

In the event any changes or updates are made to the information available on the website, the depositor will provide to any person a copy of the information as it existed as of the date of this free writing prospectus upon request who writes or calls the depositor at 1585 Broadway, New York, New York 10036, Attention: Prospectus Department, telephone number (212) 761-4000.

The information available on the website relating to any mortgage loan securitizations issued prior to January 1, 2006 is not deemed to be part of this free writing prospectus, the accompanying prospectus or the depositor’s registration statement.

THE DEPOSITOR

The depositor is Morgan Stanley ABS Capital I Inc., a Delaware corporation. The depositor is an affiliate, through common parent ownership, of the sponsor, MSSA (a seller of mortgage loans to the depositor), Morgan Stanley Capital Services Inc. (the interest rate swap provider and the interest rate cap provider) and Morgan Stanley & Co. Incorporated (an underwriter), and is a direct, wholly-owned subsidiary of Morgan Stanley (NYSE:MS). See “The Sponsor” in this free writing prospectus.

Morgan Stanley ABS Capital I Inc. does not have, nor is it expected in the future to have, any significant assets.

The depositor has been engaged since its incorporation in the securitization of mortgage loans and other asset types included within the description of the trust fund assets in the prospectus. See “Description of the Trust Funds” in the prospectus. The depositor is engaged in the business of acting as depositor of trusts that issue series of notes that are secured by, or certificates that represent interests in, the assets of the trusts. The depositor acquires assets specifically for inclusion in a securitization from the sellers in privately negotiated transactions.

The certificate of incorporation of the depositor limits its activities to those necessary or convenient to carry out its securitization activities. The depositor may have limited obligations with respect to a series of certificates. The depositor will obtain the mortgage loans from the sponsor and MSSA (which acquired such mortgage loans from the sponsor), and may also assign to the trustee certain rights of the sponsor with respect to the mortgage loans. See “Description of the Certificates—Assignment of the Mortgage Loans” in this free writing prospectus. In addition, after the issuance of a series of certificates, the depositor may have limited obligations with respect to the trust, which may include appointing a successor trustee if the trustee resigns or is otherwise removed and preparing, or causing to be prepared, certain reports filed under the Securities Exchange Act of 1934, as amended.

Neither the depositor nor any of the depositor’s affiliates will insure or guarantee distributions on the certificates of any series.

THE ISSUING ENTITY

Morgan Stanley ABS Capital I Inc. Trust 2007-NC1, the issuing entity, will be formed on the closing date pursuant to the pooling and servicing agreement. The issuing entity will be a New York common law trust with no officers or directors and no continuing duties other than to hold and service the mortgage loans and related assets and issue the certificates. The fiscal year end for the issuing entity will be December 31, commencing with December 31, 2007.

THE SERVICERS

General

The mortgage loans will be serviced by Countrywide Home Loans Servicing LP (“Countrywide Servicing”) and Saxon Mortgage Services, Inc. (“Saxon”). Countrywide Servicing will act as servicer for approximately 39.02% of the mortgage loans. Saxon will act as servicer for approximately 60.98% of the mortgage loans. Each servicer will service the mortgage loans in accordance with the pooling and servicing agreement.

Set forth below is certain information relating to Countrywide Servicing and Saxon, each of which will be servicing 20% or more of the mortgage loans as of the cut-off date.

Countrywide Home Loans Servicing LP

The information in the following paragraphs has been provided by Countrywide Servicing.

The principal executive offices of Countrywide Servicing are located at 7105 Corporate Drive, Plano, Texas 75024. Countrywide Servicing is a Texas limited partnership directly owned by Countrywide GP, Inc. and Countrywide LP, Inc., each a Nevada corporation and a direct wholly owned subsidiary of Countrywide Home Loans, Inc. (“Countrywide Home Loans”). Countrywide GP, Inc. owns a 0.1% interest in Countrywide Servicing and is the general partner. Countrywide LP, Inc. owns a 99.9% interest in Countrywide Servicing and is a limited partner. Countrywide Servicing is an affiliate, through common parent ownership, of Countrywide Securities Corporation, an underwriter.

Countrywide Home Loans established Countrywide Servicing in February 2000 to service mortgage loans originated by Countrywide Home Loans that would otherwise have been serviced by Countrywide Home Loans. In January and February, 2001, Countrywide Home Loans transferred to Countrywide Servicing all of its rights and obligations relating to mortgage loans serviced on behalf of Freddie Mac and Fannie Mae, respectively. In October 2001, Countrywide Home Loans transferred to Countrywide Servicing all of its rights and obligations relating to the bulk of its non-agency loan servicing portfolio (other than the servicing of home equity lines of credit), including with respect to those mortgage loans (other than home equity lines of credit) formerly serviced by Countrywide Home Loans and securitized by certain of its affiliates. While Countrywide Home Loans expects to continue to directly service a portion of its loan portfolio, it is expected that the servicing rights for most newly originated Countrywide Home Loans mortgage loans will be transferred to Countrywide Servicing upon sale or securitization of the related mortgage loans. Countrywide Servicing is engaged in the business of servicing mortgage loans and will not originate or acquire loans, an activity that will continue to be performed by Countrywide Home Loans. In addition to acquiring mortgage servicing rights from Countrywide Home Loans, it is expected that Countrywide Servicing will service mortgage loans for non-Countrywide Home Loans affiliated parties as well as subservice mortgage loans on behalf of other master servicers.

In connection with the establishment of Countrywide Servicing, certain employees of Countrywide Home Loans became employees of Countrywide Servicing. Countrywide Servicing has engaged Countrywide Home Loans as a subservicer to perform certain loan servicing activities on its behalf.

Countrywide Servicing is an approved mortgage loan servicer for Fannie Mae, Freddie Mac, Ginnie Mae, HUD and VA and is licensed to service mortgage loans in each state where a license is required. Its loan servicing activities are guaranteed by Countrywide Financial and/or Countrywide Home Loans when required by the owner of the mortgage loans.

Countrywide Home Loans

Countrywide Home Loans is a New York corporation and a direct wholly owned subsidiary of Countrywide Financial Corporation, a Delaware corporation (“Countrywide Financial”). The principal executive offices of Countrywide Home Loans are located at 4500 Park Granada, Calabasas, California 91302. Countrywide Home Loans is engaged primarily in the mortgage banking business, and as part of that business, originates, purchases, sells and services mortgage loans. Countrywide Home Loans originates mortgage loans through a retail branch system and through mortgage loan brokers and correspondents nationwide. Mortgage loans originated by Countrywide Home Loans are principally first-lien, fixed or adjustable rate mortgage loans secured by single-family residences.

Countrywide Home Loans has historically sold substantially all the mortgage loans that it has originated and purchased, generally through securitizations. Countrywide Home Loans does not always sell mortgage loans immediately after origination or acquisition, but may decide to sell certain mortgage loans in later periods as part of its overall management of interest rate risk. Countrywide Home Loans has been involved in the securitization of mortgage loans since 1969 when it was approved as a Federal National Mortgage Association seller/servicer. Countrywide Home Loans reviews the structure of its securitizations and discusses the structure with the related underwriters.

Except as otherwise indicated, reference in the remainder of this free writing prospectus to “Countrywide Home Loans” should be read to include Countrywide Home Loans and its consolidated subsidiaries, including Countrywide Servicing. Countrywide Home Loans services substantially all of the mortgage loans it originates or acquires. In addition, Countrywide Home Loans has purchased in bulk the rights to service mortgage loans originated by other lenders. Countrywide Home Loans has in the past and may in the future sell to mortgage bankers and other institutions a portion of its portfolio of loan servicing rights. As of December 31, 2002, December 31, 2003, December 31, 2004, December 31, 2005 and September 30, 2006, Countrywide Home Loans provided servicing for mortgage loans with an aggregate principal balance of approximately $452.405 billion, $644.855 billion, $838.322 billion, $1,111.090 billion and $1,244.311 billion, respectively, substantially all of which were being serviced for unaffiliated persons. As of December 31, 2005, and September 30, 2006, Countrywide Home Loans provided servicing for subprime first and second lien mortgage loans (excluding mortgage loans being subserviced by Countrywide Home Loans) with an aggregate principal balance of approximately $121.734 billion and $118.908 billion, respectively.

Loan Servicing

Countrywide Servicing has established standard policies for the servicing and collection of mortgages. Servicing includes, but is not limited to:

(a)collecting, aggregating and remitting mortgage loan payments;

(b)accounting for principal and interest;

(c)holding escrow (impound) funds for payment of taxes and insurance;

(d)making inspections as required of the mortgaged properties;

(e)preparation of tax related information in connection with the mortgage loans;

(f)supervision of delinquent mortgage loans;

(g)loss mitigation efforts;

(h)foreclosure proceedings and, if applicable, the disposition of mortgaged properties; and

(i)generally administering the mortgage loans, for which it receives servicing fees.

Billing statements with respect to mortgage loans are mailed monthly by Countrywide Servicing. The statement details all debits and credits and specifies the payment due. Notice of changes in the applicable loan rate are provided by Countrywide Servicing to the borrower with these statements.

Collection Procedures

Subprime Mortgage Loans. When a borrower fails to make a payment on a subprime mortgage loan, Countrywide Servicing attempts to cause the deficiency to be cured by corresponding with the borrower. In most cases, deficiencies are cured promptly. Pursuant to Countrywide Servicing’s servicing procedures for subprime loans, Countrywide Servicing generally mails to the borrower a notice of intent to foreclose after the loan becomes 31 days past due (two payments due but not received) and, generally within 59 days thereafter, if the loan remains delinquent, institutes appropriate legal action to foreclose on the mortgaged property. Foreclosure proceedings may be terminated if the delinquency is cured. Mortgage loans to borrowers in bankruptcy proceedings may be restructured in accordance with law and with a view to maximizing recovery of the loans, including any deficiencies.

Once foreclosure is initiated by Countrywide Servicing, a foreclosure tracking system is used to monitor the progress of the proceedings. The system includes state specific parameters to monitor whether proceedings are progressing within the time frame typical for the state in which the mortgaged property is located. During the foreclosure proceeding, Countrywide Servicing determines the amount of the foreclosure bid and whether to liquidate the mortgage loan.

If foreclosed, the mortgaged property is sold at a public or private sale and may be purchased by Countrywide Home Loans. After foreclosure, Countrywide Servicing may liquidate the mortgaged property and charge-off the loan balance which was not recovered through liquidation proceeds.

Servicing and charge-off policies and collection practices with respect to subprime mortgage loans may change over time in accordance with, among other things, Countrywide Servicing’s business judgment, changes in the servicing portfolio and applicable laws and regulations.

Saxon Mortgage Services, Inc.

The information in the following paragraphs has been provided by Saxon.

History

Saxon, a Texas corporation, is an indirect subsidiary of Saxon Capital, Inc. On December 4, 2006, Saxon Capital, Inc. became a direct subsidiary of MSMC, which is a direct subsidiary of Morgan Stanley (NYSE: MS). As a result, Saxon is an affiliate of the sponsor, the depositor and Morgan Stanley & Co. Incorporated, an underwriter. Saxon began its mortgage loan servicing operations in 1960 under the name Cram Mortgage Service, Inc., changed its name in September 1994 to Meritech Mortgage Services, Inc., and changed its name to the current name in May 2002. Saxon services mortgage loans for its affiliates as well as other non-affiliated lenders and investors.

Experience and Procedures

In 2001, Saxon began acquiring servicing from third parties in addition to servicing the mortgage loans of affiliates. Currently a substantial majority of the loans in Saxon’s servicing portfolio are serviced for third parties. Of the over 75 securitizations Saxon services, 18 were issued by an affiliate of Saxon and the rest were issued by third party issuers. At this time, substantially all of Saxon’s servicing portfolio consists of sub-prime mortgage loans, comprised of fixed-rate and adjustable-rate, first and second lien conventional mortgage loans. Saxon’s servicing platform, MortgageServ, is able to service virtually any type of mortgage loan product. Presently, Saxon has not programmed its servicing platform for any home equity line of credit products. Saxon has serviced interest-only products for two years, in 2005 started servicing mortgage loans with amortization periods of up to forty years, and in 2006 started servicing mortgage loans with amortization periods of up to fifty years.

Saxon services all mortgage loans according to its life of loan credit risk management strategy which was developed substantially for the servicing of sub-prime mortgage loans. The risk of delinquency and loss associated with sub-prime mortgage loans requires active communication with borrowers. Beginning with an introductory call made as soon as fifteen days following the origination or purchase of a mortgage loan, Saxon attempts to establish a consistent payment relationship with the borrower. In addition, Saxon’s call center uses a predictive dialer, where permitted, to create calling campaigns for delinquent loans based upon the borrower’s historical payment patterns and the borrower’s risk profile. Saxon’s technology delivers extensive data regarding the loan and the borrower to the desktop of the individual providing service. Contact with borrowers is tailored to reflect the borrower’s payment habit, loan risk profile, and loan status. Borrower contact is initiated through outbound telephone campaigns, monthly billing statements, and direct mail. Saxon’s website provides borrowers with access to account information and online payment alternatives.

Saxon’s goal is to provide the most efficient and economical solutions to the processes Saxon manages in the servicing area. Outsourcing of appropriate servicing functions has allowed Saxon to maintain a high quality of performance and reduced costs while allowing Saxon to apply its expertise to managing the outsourced service providers. In the past, Saxon has successfully outsourced areas including tax tracking, insurance tracking and foreclosure and bankruptcy tracking. In 2005, Saxon outsourced the document management area, resulting in faster imaging of mortgage loan documents with fewer document exception rates.

Saxon is now able to deliver online access to selected mortgage loan documents and an online interview guiding the borrower through alternatives to foreclosure.

Once a mortgage loan becomes thirty days delinquent, the related borrower receives a breach notice, sent between the 35th and 48th day of delinquency, allowing thirty days, or more if required by applicable law, to cure the default before the account is referred for foreclosure. The call center continues active collection campaigns and may offer the borrower relief through a forbearance plan designed to resolve the delinquency in ninety days or less.

Accounts moving from thirty days delinquent to sixty or more days delinquent are transferred to the Loss Mitigation department, which is supported by the predictive dialer, as well as the MortgageServ system. The Loss Mitigation department continues to actively attempt to resolve the delinquency while Saxon’s Foreclosure department refers the file to local counsel to begin the foreclosure process.

The MortgageServ system is Saxon’s core servicing platform. It provides all the mortgage loan level detail and interacts with all of Saxon’s supplemental products such as the dialer, pay-by-phone and website activity. The MortgageServ system provides functionality that was not available with Saxon’s prior systems, allowing the retirement of proprietary systems supporting Saxon’s Loss Mitigation, Foreclosure, and REO departments. Incorporating those automated processes while providing direct interfaces with service providers enhances Saxon’s efficiency.

Delinquent accounts not resolved through collection and loss mitigation activities are foreclosed in accordance with state and local laws. Foreclosure timelines are managed through an outsourcing relationship that uploads data into the MortgageServ system. The MortgageServ system schedules key dates throughout the foreclosure process, enhancing the outsourcer's ability to monitor and manage foreclosure counsel. Properties acquired through foreclosure are transferred to the REO department to manage eviction and marketing of the properties.

Once REO properties are vacant, they are listed with one of three national asset management firms that develop a marketing strategy designed to ensure the highest net recovery upon liquidation. The REO department monitors these asset managers. Property listings are reviewed monthly to ensure the properties are properly maintained and actively marketed.

Saxon services nine securitizations for which servicer events of default have occurred. Eight were triggered by delinquency levels, and one was triggered by the cumulative loss level. Each of these securitizations was issued in or prior to 2001. Saxon has never been removed as servicer and has not failed to comply with servicing criteria in any servicing agreements. In addition to the nine securitizations above, Saxon services another three securitizations issued before 2001, two of which have more than one servicer, in which performance triggers have occurred due to delinquency levels. Typically, this results in a re-direction of bond principal payments to the most senior classes. Saxon has not failed to make required advances with respect to any securitizations for which it is servicer.

Size, Composition and Growth of Saxon’s Portfolio of Serviced Assets

Currently, substantially all of Saxon’s servicing portfolio consists of non-prime mortgage loans, represented by fixed-rate and adjustable-rate, first and second lien conventional mortgage loans. The following table reflects the size and composition of Saxon’s affiliate-owned and third party servicing portfolio as of the end of each indicated period.

Saxon’s Portfolio of Mortgage Loans

Unpaid Principal Balance as of:

(Dollar Amounts, in thousands)

	September 30, 2006		December 31, 2005		December 31, 2004		December 31, 2003
Saxon Affiliate	$	6,794,992	$	6,394,873	$	5,950,965	$	4,665,770
Third Party		19,810,560		18,365,897		14,214,977		5,233,753
Total	$	26,605,552	$	24,760,770	$	20,165,942	$	9,899,523

Saxon Rating Information

Saxon’s residential sub-prime servicing operations are currently rated as “Above Average” by S&P. Fitch has rated Saxon “RPS2+” as a primary servicer of residential Alt-A and sub-prime products. Moody’s has rated Saxon “SQ2+” as a primary servicer of residential sub-prime mortgage loans. Saxon is an approved Freddie Mac and Fannie Mae servicer.

Saxon’s Delinquency and Foreclosure Experience

The following tables set forth the delinquency and foreclosure experience of the mortgage loans serviced by Saxon at the end of the indicated periods. The indicated periods of delinquency are based on the number of days past due on a contractual basis. A mortgage loan is considered delinquent for these purposes if the full monthly payment of principal and interest has not been paid by the next scheduled due date. Saxon’s portfolio may differ significantly from the mortgage loans in the mortgage loan pool in terms of interest rates, principal balances, geographic distribution, types of properties, lien priority, origination and underwriting criteria, prior servicer performance and other possibly relevant characteristics. There can be no assurance, and no representation is made, that the delinquency and foreclosure experience with respect to the mortgage loans in the mortgage loan pool will be similar to that reflected in the table below, nor is any representation made as to the rate at which losses may be experienced on liquidation of defaulted mortgage loans in the mortgage loan pool. The actual delinquency experience on the mortgage loans in the mortgage loan pool will depend, among other things, upon the value of the real estate securing such mortgage loans in the mortgage loan pool and the ability of the related borrower to make required payments. It should be noted that if the residential real estate market should experience an overall decline in property values, the rates of delinquencies and foreclosures could increase. In addition, adverse economic conditions may affect the timely payment by borrowers of scheduled payments of principal and interest on the mortgage loans in the mortgage loan pool and, accordingly, the actual rates of delinquencies and foreclosures with respect to the mortgage loan pool. Finally, the statistics shown below represent the delinquency experience for Saxon’s mortgage servicing portfolio only for the periods presented, whereas the aggregate delinquency experience on the mortgage loans comprising the mortgage loan pool will depend on the results obtained over the life of the mortgage loan pool. These statistics were derived by using one generally accepted method of calculating and reporting delinquency. Saxon may change its method of reporting delinquency experience to another generally accepted method. Such a change may affect these statistics.

Saxon Mortgage Loan Servicing Portfolio

Delinquencies and Foreclosures

(Dollar Amounts in Thousands)

		December 31,
	September 30, 2006	2005	2004	2003
	Total Servicing Portfolio	Total Servicing Portfolio	Total Servicing Portfolio	Total Servicing Portfolio
	($ in thousands)
Total outstanding principal balance (at period end)	$26,605,552	$24,760,770	$20,165,942	$9,899,523
Delinquency (at period end):
30-59 days:
Principal balance	$1,740,898	$1,442,450	$956,478	$605,980
Delinquency percentage	6.54%	5.83%	4.74%	6.12%
60-89 days:
Principal balance	$598,466	$465,173	$247,863	$138,253
Delinquency percentage	2.25%	1.88%	1.23%	1.40%
90 days or more:
Principal balance	$471,033	$391,147	$172,124	$96,388
Delinquency percentage	1.77%	1.58%	0.85%	0.97%
Bankruptcies (1):
Principal balance	$415,796	$491,243	$279,331	$300,282
Delinquency percentage	1.56%	1.98%	1.39%	3.03%
Foreclosures:
Principal balance	$747,668	$595,905	$314,253	$298,658
Delinquency percentage	2.81%	2.41%	1.56%	3.02%
Real Estate Owned:
Principal balance	$384,793	$187,449	$107,939	$107,202
Delinquency percentage	1.45%	0.76%	0.54%	1.08%
Total Seriously Delinquent including real estate owned (2)	9.48%	7.92%	5.26%	8.89%
Total Seriously Delinquent excluding real estate owned	8.04%	7.16%	4.73%	7.81%

________________

(1)  Bankruptcies include both non-performing and performing mortgage loans in which the related borrower is in bankruptcy. Amounts included for contractually current bankruptcies for the total servicing portfolio for September 30, 2006, 2005, 2004, and 2003 are $69.8 million, $133.5 million, $47.5 million, and $43.7 million, respectively.

(2)  Seriously delinquent is defined as mortgage loans that are 60 or more days delinquent, foreclosed, REO, or held by a borrower who has declared bankruptcy and is 60 or more days contractually delinquent.

No Material Changes to Servicer Policies and Procedures

There have been no material changes in Saxon’s servicing policies and procedures during the past three years.

Relationships with Transaction Parties

As a result of a merger, completed on December 4, 2006, between Saxon Capital, Inc. and MSMC’s wholly owned subsidiary, Angle Merger Subsidiary Corporation, Saxon Capital, Inc. became a wholly owned subsidiary of MSMC.

THE TRUSTEE

Deutsche Bank National Trust Company (“DBNTC”) will act as trustee. DBNTC is a national banking association and has an office in Santa Ana, California. DBNTC has previously been appointed to the role of trustee for numerous mortgage-backed transactions in which residential mortgages comprised the asset pool and has significant experience in this area. As trustee, DBNTC will be calculating certain items and reporting as set forth in the pooling and servicing agreement. DBNTC has acted as calculation agent and paying agent in numerous mortgage-backed transactions since 1991. DBNTC has no pending legal proceedings that would materially affect its ability to perform its duties as trustee on behalf of the certificateholders. DBNTC may perform certain of its obligations through one or more third party vendors. However, DBNTC will remain liable for the duties and obligations required of it under the pooling and servicing agreement. DBNTC has had no material changes to DBNTC’s policies or procedures in its calculation agent and paying agent roles in mortgage-backed transactions during the past 3 years. DBNTC will act as the custodian of the mortgage files pursuant to the pooling and servicing agreement. DBNTC has performed this custodial role in numerous mortgage-backed transactions since 1991. DBNTC will maintain the mortgage files in secure, fire-resistant facilities. DBNTC will not physically segregate the mortgage files from other mortgage files in DBNTC’s custody but will be kept in shared facilities. However, DBNTC’s proprietary document tracking system will show the location within DBNTC’s facilities of each mortgage file and will show that the mortgage loan documents are held by the trustee on behalf of the trust. DBNTC has no pending legal proceedings that would materially affect its ability to perform its duties as custodian.

DBNTC is providing the information in the foregoing paragraph at the depositor’s request in order to assist the depositor with the preparation of its disclosure documents to be filed with the SEC pursuant to Regulation AB. Otherwise, DBNTC has not participated in the preparation of such disclosure documents and assumes no responsibility or liability for their contents.

In its capacity as trustee, DBNTC will be required to perform the following duties regarding the residential mortgage-backed securities:

·   execute and authenticate the certificates;

·   maintain lists of certificateholders;

·   maintain custody of the mortgage files with respect to all mortgage loans;

·   make distributions according to the priorities set forth under “Description of the Certificates—Distributions of Interest and Principal” in this free writing prospectus;

·   collect and prepare certain reports and notices to the certificateholders as set forth in the pooling and servicing agreement;

·   collect and prepare certain reports and notices to the rating agencies as set forth in the pooling and servicing agreement;

·   notify certificateholders of “servicer events of default” as defined and described under “The Pooling and Servicing Agreement—Removal and Resignation of the Servicers” in this free writing prospectus;

·   in case of a servicer event of default, file claims and enforce all rights of action pursuant to the terms of the pooling and servicing agreement;

·   amend the provisions of the pooling and servicing agreement at the request of a specified percentage of certificateholders as further described under “The Pooling and Servicing Agreement—Amendment” in this free writing prospectus; and

·   perform tax reporting duties and make REMIC elections pursuant to the pooling and servicing agreement.

DBNTC will only be required to perform duties that are specifically set forth in the pooling and servicing agreement, interest rate swap agreement and any other agreements relating to the issuing entity to which it is a party or the certificates. In addition, DBNTC may conclusively rely on any documents furnished to it as the trustee, is not bound to make any investigation into the facts underlying such documents, is not required to expend or risk its own funds or incur any financial liability in the exercise of its rights and powers, and will not be liable for any action taken or omitted to be taken by it in good faith and reasonably believed by it to be authorized. DBNTC is not responsible for verifying, recomputing or recalculating information given to it by the servicers. See also “The Pooling and Servicing Agreement—Certain Matters Regarding the Depositor, the Servicers and the Trustee” for additional limitations on the liability of DBNTC.

DBNTC will be entitled to indemnification from (a) the responsible party for breaches of certain representations and warranties to the extent described under “Description of the Certificates—Representations and Warranties Relating to the Mortgage Loans” in this free writing prospectus and (b) the trust to the extent described under “The Pooling and Servicing Agreement—Certain Matters Regarding the Depositor, the Servicers and the Trustee” in this free writing prospectus.

DBNTC may resign or be removed as set forth in the pooling and servicing agreement. Such resignation or removal will become effective when a successor trustee accepts the appointment.

INTEREST RATE SWAP PROVIDER AND INTEREST RATE CAP PROVIDER

The interest rate swap agreement and the interest rate cap agreement will be provided by Morgan Stanley Capital Services Inc. (“MSCS”), a Delaware corporation formed in 1985 or upon the occurrence of certain events, a replacement counterparty that satisfies certain credit criteria (together with MSCS, the “Swap Provider” or the “Cap Provider”). See “Description of the Certificates—Interest Rate Swap Agreement” and “—Interest Rate Cap Agreement” in this free writing prospectus. MSCS is an affiliate, through common parent ownership, of the sponsor, the depositor, MSSA and Morgan Stanley & Co. Incorporated, an underwriter, and is a wholly-owned, unregulated special purpose subsidiary of Morgan Stanley (NYSE:MS). The principal executive offices of MSCS are located at 1585 Broadway, New York, New York 10036, telephone number (212) 761-4000.

MSCS conducts business in the over-the-counter derivatives market, writing a variety of derivative instruments, including interest rate swaps, currency swaps, credit default swaps and interest rate options with institutional clients. The payment obligations of MSCS under its derivative instruments are 100% guaranteed by Morgan Stanley. As of the date hereof, Morgan Stanley has a long-term debt rating of “Aa3” by Moody’s Investors Service, Inc. (“Moody’s”) and “A+” by Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. (“S&P”) and a short-term debt rating of “P-1” by Moody’s and “A-1” by S&P.

DESCRIPTION OF THE CERTIFICATES

General

On the closing date, the trust will be created and the depositor will cause the trust to issue the certificates. The certificates will be issued in nineteen classes, the Class A-1, Class A-2a, Class A-2b, Class A-2c, Class A-2d, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3, Class B-4, Class P, Class X, Class R and Class R-X certificates. Only the Class A-1, Class A-2a, Class A-2b, Class A-2c, Class A-2d, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3 and Class B-4 certificates, collectively, the “Offered Certificates,” will be offered under this free writing prospectus. The certificates will collectively represent the entire undivided ownership interest in the trust fund created and held under the pooling and servicing agreement, subject to the limits and priority of distribution provided for in that agreement.

The trust fund will consist of:

·   the mortgage loans, together with the related mortgage files and all related collections and proceeds due and collected after the cut-off date;

·   such assets as from time to time are identified as REO property and related collections and proceeds;

·   assets that are deposited in the accounts, and invested in accordance with the pooling and servicing agreement;

·   an interest rate swap agreement; and

·   an interest rate cap agreement.

The Offered Certificates will be issued and available only in book-entry form, in denominations of $25,000 and integral multiples of $1 in excess of $25,000, except that one certificate of each class may be issued in an amount less than $25,000. For information regarding the issuance of certificates in book-entry form, see “—Book-Entry Registration” below.

Voting rights will be allocated among holders of the Offered Certificates in proportion to the Class Certificate Balances of their respective certificates on such date, except that the Class X and Class P certificates will each be allocated 1% of the voting rights. The Class X and Class P certificates will be held by the sponsor or one of its affiliates.

The Class A-1 certificates generally represent interests in the group I mortgage loans. The Class A-2a, Class A-2b, Class A-2c and Class A-2d certificates generally represent interests in the group II mortgage loans. The Class M and Class B certificates represent interests in all of the mortgage loans.

The following chart illustrates generally the distribution priorities and subordination features applicable to the Offered Certificates and the Class X certificates.

_______________

*Interest and principal distributions will be allocated among the Class A certificates as further described in this free writing prospectus. Losses will not be allocated to the Class A certificates until the final distribution date.

Book-Entry Registration

The Offered Certificates are sometimes referred to in this free writing prospectus as “book-entry certificates.” No person acquiring an interest in the book-entry certificates will be entitled to receive a definitive certificate representing an obligation of the trust, except under the limited circumstances described in this free writing prospectus. Beneficial owners may elect to hold their interests through DTC, in the United States, or Clearstream Banking, société anonyme or Euroclear Bank, as operator of the Euroclear System, in Europe. Transfers within DTC, Clearstream or Euroclear, as the case may be, will be in accordance with the usual rules and operating procedures of the relevant system. So long as the Offered Certificates are book-entry certificates, such certificates will be evidenced by one or more certificates registered in the name of Cede & Co., which will be the “holder” of such certificates, as the nominee of DTC or one of the relevant depositories. Cross-market transfers between persons holding directly or indirectly through DTC, on the one hand, and counterparties holding directly or indirectly through Clearstream or Euroclear, on the other, will be effected in DTC through the relevant depositories of Clearstream or Euroclear, respectively, and each a participating member of DTC. The interests of the beneficial owners of interests in the Offered Certificates will be represented by book-entries on the records of DTC and its participating members. All references in this free writing prospectus to the Offered Certificates reflect the rights of beneficial owners only as such rights may be exercised through DTC and its participating organizations for so long as such certificates are held by DTC.

The beneficial owners of the Offered Certificates may elect to hold their certificates through DTC in the United States, or Clearstream or Euroclear, if they are participants in such systems, or indirectly through organizations which are participants in such systems. The Offered Certificates will be issued in one or more certificates which in the aggregate equal the outstanding principal of the related class of certificates and will initially be registered in the name of Cede & Co., the nominee of DTC. Clearstream and Euroclear will hold omnibus positions on behalf of their participants through customers securities accounts in Clearstream’s and Euroclear’s names on the books of their respective depositories, which in turn will hold such positions in customers’ securities accounts in the depositories names on the books of DTC. Except as described below, no beneficial owner will be entitled to receive a physical or definitive certificates. Unless and until definitive certificates are issued, it is anticipated that the only holder of the Offered Certificates will be Cede & Co., as nominee of DTC. Beneficial owners will not be holders or certificateholders as those terms are used in the pooling and servicing agreement. Beneficial owners are only permitted to exercise their rights indirectly through participants and DTC.

The beneficial owner’s ownership of a book-entry certificate will be recorded on the records of the brokerage firm, bank, thrift institution or other financial intermediary that maintains the beneficial owner’s account for such purpose. In turn, the financial intermediary’s ownership of such book-entry certificate will be recorded on the records of DTC or on the records of a participating firm that acts as agent for the financial intermediary, whose interest will in turn be recorded on the records of DTC, if the beneficial owner’s financial intermediary is not a DTC participant and on the records of Clearstream or Euroclear, as appropriate.

DTC is a limited purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a clearing corporation within the meaning of the New York UCC and a “clearing agency” registered pursuant to Section 17A of the Exchange Act. DTC was created to hold securities for its participants and to facilitate the clearance and settlement of securities transactions between participants through electronic book-entries, thus eliminating the need for physical movement of certificates. Participants include securities brokers and dealers, including underwriters, banks, trust companies and clearing corporations. Indirect access to the DTC system also is available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly through indirect participants.

Under the rules, regulations and procedures creating and affecting DTC and its operations, DTC is required to make book-entry transfers of book-entry certificates, such as the Offered Certificates, among participants on whose behalf it acts with respect to the book-entry certificates and to receive and transmit distributions of principal of and interest on the book-entry certificates. Participants and indirect participants with which beneficial owners have accounts with respect to the book-entry certificates similarly are required to make book-entry transfers and receive and transmit such distributions on behalf of their respective beneficial owners.

Beneficial owners that are not participants or indirect participants but desire to purchase, sell or otherwise transfer ownership of, or other interests in, book-entry certificates may do so only through participants and indirect participants. In addition, beneficial owners will receive all distributions of principal and interest from the trustee, or a paying agent on behalf of the trustee, through DTC participants. DTC will forward such distributions to its participants, which thereafter will forward them to indirect participants or beneficial owners. Beneficial owners will not be recognized by the trustee or any paying agent as holders of the Offered Certificates, and beneficial owners will be permitted to exercise the rights of the holders of the Offered Certificates only indirectly through DTC and its participants.

Because of time zone differences, it is possible that credits of securities received in Clearstream or Euroclear as a result of a transaction with a participant will be made during subsequent securities settlement processing and dated the business day following the DTC settlement date. Such credits or any transactions in such securities settled during such processing will be reported to the relevant Euroclear or Clearstream participants on such business day. Cash received in Clearstream or Euroclear as a result of sales of securities by or through a Clearstream participant or Euroclear participant to a DTC participant will be received with value on the DTC settlement date but, due to time zone differences, may be available in the relevant Clearstream or Euroclear cash account only as of the business day following settlement in DTC.

Transfers between participants will occur in accordance with DTC rules. Transfers between Clearstream participants and Euroclear participants will occur in accordance with their respective rules and operating procedures.

Cross-market transfers between persons holding directly or indirectly through DTC, on the one hand, and directly or indirectly through Clearstream participants or Euroclear participants, on the other, will be effected in DTC in accordance with DTC rules on behalf of the relevant European international clearing system by the relevant depositary, each of which is a participating member of DTC. However, such cross-market transactions will require delivery of instructions to the relevant European international clearing system by the counterparty in such system in accordance with its rules and procedures and within its established deadlines. The relevant European international clearing system will, if the transaction meets its settlement requirements, deliver instructions to the relevant depositary to take action to effect final settlement on its behalf by delivering or receiving securities in DTC, and making or receiving distribution in accordance with normal procedures for same day funds settlement applicable to DTC. Clearstream participants and Euroclear participants may not deliver instructions directly to the relevant depositories for Clearstream or Euroclear.

Clearstream holds securities for its participant organizations and facilitates the clearance and settlement of securities transactions between Clearstream participants through electronic book-entry changes in accounts of Clearstream participants, thus eliminating the need for physical movement of securities. Transactions may be settled through Clearstream in many currencies, including United States dollars. Clearstream provides to its Clearstream participants, among other things, services for safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing. Clearstream interfaces with domestic markets in several countries. Clearstream participants are recognized financial institutions around the world, including underwriters, securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. Indirect access to Clearstream is also available to others, such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Clearstream participant, either directly or indirectly.

Euroclear was created to hold securities for its participants and to clear and settle transactions between its participants through simultaneous electronic book-entry delivery against payment, thereby eliminating the need for physical movement of certificates and any risk from lack of simultaneous transfers of securities and cash. The Euroclear System is owned by Euroclear plc and operated through a license agreement by Euroclear Bank S.A./N.V., a bank incorporated under the laws of the Kingdom of Belgium (the “Euroclear Operator”). The Euroclear Operator holds securities and book-entry interests in securities for participating organizations and facilitates the clearance and settlement of securities transactions between Euroclear participants, and between Euroclear participants and participants of certain other securities intermediaries through electronic book-entry changes in accounts of such participants or other securities intermediaries. Non-participants of Euroclear may hold and transfer book-entry interests in the Offered Certificates through accounts with a direct participant of Euroclear or any other securities intermediary that holds a book-entry interest in the Offered Certificates through one or more securities intermediaries standing between such other securities intermediary and the Euroclear Operator. Securities clearance accounts and cash accounts with the Euroclear Operator are governed by the Terms and Conditions Governing Use of Euroclear and the related Operating Procedures of the Euroclear System, and applicable Belgian law. All securities in Euroclear are held on a fungible basis without attribution of specific certificates to specific securities clearance accounts. The Euroclear Operator acts only on behalf of Euroclear participants and has no record of or relationship with persons holding through Euroclear participants.

Distributions on the book-entry certificates will be made on each distribution date by the trustee to Cede & Co., as nominee of DTC. DTC will be responsible for crediting the amount of such distributions to the accounts of the applicable DTC participants in accordance with DTC’s normal procedures. Each DTC participant will be responsible for disbursing such distribution to the beneficial owners of the book-entry certificates that it represents and to each financial intermediary for which it acts as agent. Each such financial intermediary will be responsible for disbursing funds to the beneficial owners of the book-entry certificates that it represents.

Under a book-entry format, beneficial owners of the book-entry certificates may experience some delay in their receipt of distributions, since such distributions will be forwarded by the trustee to Cede & Co., as nominee of DTC. Distributions with respect to certificates held through Clearstream or Euroclear will be credited to the cash accounts of Clearstream participants or Euroclear participants in accordance with the relevant system’s rules and procedures, to the extent received by the relevant depositary. Such distributions will be subject to tax reporting in accordance with relevant United States tax laws and regulations. Because DTC can only act on behalf of financial intermediaries, the ability of a beneficial owner to pledge book-entry certificates to persons or entities that do not participate in the DTC system, or otherwise take actions in respect of such book-entry certificates, may be limited due to the lack of physical certificates for such book-entry certificates. In addition, issuance of the book-entry certificates in book-entry form may reduce the liquidity of such certificates in the secondary market since certain potential investors may be unwilling to purchase certificates for which they cannot obtain physical certificates.

Monthly and annual reports on the trust made available by the trustee to Cede & Co., as nominee of DTC, may be made available to beneficial owners upon request, in accordance with the rules, regulations and procedures creating and affecting DTC, and to the financial intermediaries to whose DTC accounts the book-entry certificates of such beneficial owners are credited.

DTC has advised the depositor that it will take any action permitted to be taken by a holder of the Offered Certificates under the pooling and servicing agreement only at the direction of one or more participants to whose accounts with DTC the book-entry certificates are credited. Additionally, DTC has advised the depositor that it will take such actions with respect to specified percentages of voting rights only at the direction of and on behalf of participants whose holdings of book-entry certificates evidence such specified percentages of voting rights. DTC may take conflicting actions with respect to percentages of voting rights to the extent that participants whose holdings of book-entry certificates evidence such percentages of voting rights authorize divergent action.

None of the trust, the depositor, the servicers or the trustee will have any responsibility for any aspect of the records relating to or distributions made on account of beneficial ownership interests of the book-entry certificates held by Cede & Co., as nominee for DTC, or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

Although DTC, Clearstream and Euroclear have agreed to the foregoing procedures in order to facilitate transfers of certificates among participants of DTC, Clearstream and Euroclear, they are under no obligation to perform or continue to perform such procedures, and such procedures may be discontinued at any time. See “Description of the Securities—Book-Entry Registration of Securities” in the prospectus.

See also the attached Annex I for certain information regarding U.S. federal income tax documentation requirements for investors holding certificates through Clearstream or Euroclear (or through DTC if the holder has an address outside the United States).

Definitive Certificates

The Offered Certificates, which will be issued initially as book-entry certificates, will be converted to definitive certificates and reissued to beneficial owners or their nominees, rather than to DTC or its nominee, only if (a) DTC or the depositor advises the trustee in writing that DTC is no longer willing or able to properly discharge its responsibilities as depository with respect to the book-entry certificates and the trustee or the depositor is unable to locate a qualified successor or (b) the depositor, at its option (but with the trustee’s consent), notifies DTC of its intent to terminate the book-entry system through DTC and, upon receipt of notice of such intent from DTC, the participants holding beneficial interests in the certificates agree to initiate such termination.

Upon the occurrence of any event described in the immediately preceding paragraph, the trustee will be required to notify all participants of the availability through DTC of definitive certificates. Upon delivery of definitive certificates, the trustee will reissue the book-entry certificates as definitive certificates to beneficial owners. Distributions of principal of, and interest on, the book-entry certificates will thereafter be made by the trustee, or a paying agent on behalf of the trustee, directly to holders of definitive certificates in accordance with the procedures set forth in the pooling and servicing agreement.

Definitive certificates will be transferable and exchangeable at the offices of the trustee, its agent or the certificate registrar designated from time to time for those purposes. As of the closing, the trustee designates its office located at DB Services Tennessee, 648 Grassmere Park Road, Nashville, Tennessee 37211-3658, Attention: Transfer Unit for those purposes. No service charge will be imposed for any registration of transfer or exchange, but the trustee may require distribution of a sum sufficient to cover any tax or other governmental charge imposed in connection with the transfer or exchange.

Assignment of the Mortgage Loans

Pursuant to a mortgage loan purchase and warranties agreement, between NC Capital Corporation (“NC Capital”) and MSMC (the “Original Seller Agreement”), NC Capital sold the mortgage loans, without recourse, to MSMC (which subsequently transferred certain NC Capital mortgage loans to MSSA), and MSMC and MSSA will sell and convey the mortgage loans, including all principal outstanding as of, and interest due and accruing on or after, the close of business on the cut-off date, without recourse, to the depositor on the closing date. Pursuant to the pooling and servicing agreement, the depositor will sell, without recourse, to the trust, all right, title and interest in and to each mortgage loan, including all principal outstanding as of, and interest due on or after, the close of business on the cut-off date. Each such transfer will convey all right, title and interest in and to (a) principal outstanding as of the close of business on the cut-off date (after giving effect to payments of principal due on or prior to that date, whether or not received) and (b) interest due and accrued on each such mortgage loan after the cut-off date (or, if the due date for a mortgage loan is other than on the first day of the month, after the due date immediately preceding the cut-off date). However, MSMC and MSSA will not convey to the depositor, and will retain all of its right, title and interest in and to (x) principal due on each mortgage loan on or prior to the cut-off date and principal prepayments in full and curtailments (i.e., partial prepayments) received on each such mortgage loan prior to the cut-off date and (y) interest due and accrued on each mortgage loan on or prior to the cut-off date (or, if the due date for a mortgage loan is other than on the first day of the month, on or prior to the due date immediately preceding the cut-off date).

MSMC will convey to the depositor, pursuant to a representation and warranties agreement, and the depositor will convey to the trust, pursuant to the pooling and servicing agreement, certain rights of MSMC with respect to each mortgage loan under the Original Seller Agreement, as further described under “—Representations and Warranties Relating to the Mortgage Loans” below.

Delivery of Mortgage Loan Documents

In connection with the transfer and assignment of each mortgage loan to the trust, the depositor will cause to be delivered to the trustee, on or before the closing date, the following documents with respect to each mortgage loan which constitute the mortgage file:

(a)   the original mortgage note, endorsed without recourse in blank by the last endorsee, including all intervening endorsements showing a complete chain of endorsement from the originator to the last endorsee;

(b)   the original of any guaranty executed in connection with the mortgage note;

(c)   the related original mortgage and evidence of its recording or, in certain limited circumstances, a copy of the mortgage certified by the originator, escrow company, title company, or closing attorney;

(d)   the mortgage assignment(s), or copies of them certified by the applicable originator, escrow company, title company, or closing attorney, if any, showing a complete chain of assignment from the originator of the related mortgage loan to the last endorsee - which assignment may, at the originator’s option, be combined with the assignment referred to in clause (e) below;

(e)   a mortgage assignment in recordable form, which, if acceptable for recording in the relevant jurisdiction, may be included in a blanket assignment or assignments, of each mortgage from the last endorsee in blank;

(f)   originals or copies of all assumption, modification, consolidation and extension agreements, with evidence of recording on them;

(g)   an original title insurance policy or, in the event the original policy is unavailable, a copy of the related policy binder, preliminary report or commitment for title issued by the title insurance company; and

(h)   the original of any security agreement, chattel mortgage or equivalent document executed in connection with the mortgage (if provided).

Pursuant to the pooling and servicing agreement, the trustee will agree to execute and deliver on or prior to the closing date an acknowledgment of receipt of the original mortgage note, item (a) above, with respect to each of the mortgage loans delivered to the trustee, with any exceptions noted. The trustee will agree, for the benefit of the holders of the certificates, to review, or cause to be reviewed, each mortgage file within ninety days after the closing date - or, with respect to any Substitute Mortgage Loan delivered to the trustee, within thirty days after the receipt of the mortgage file by the trustee, and to deliver a certification generally to the effect that, as to each mortgage loan listed in the schedule of mortgage loans,

·   all documents required to be reviewed by it pursuant to the pooling and servicing agreement are in its possession;

·   each such document has been reviewed by it and appears regular on its face and relates to such mortgage loan;

·   based on its examination and only as to the foregoing documents, certain information set forth on the schedule of mortgage loans accurately reflects the information set forth in the mortgage file delivered on such date; and

·   each mortgage note has been endorsed as provided in the pooling and servicing agreement.

If the trustee, during the process of reviewing the mortgage files, finds any document constituting a part of a mortgage file that is not executed, has not been received or is unrelated to the mortgage loans, or that any mortgage loan does not conform to the requirements above or to the description of the requirements as set forth in the schedule of mortgage loans attached to the pooling and servicing agreement, the trustee is required to notify NC Capital, the servicers and the depositor in writing as provided in the pooling and servicing agreement. NC Capital will be required to use reasonable efforts to cause to be remedied a material defect in a document constituting part of a mortgage file of which it is so notified by the trustee. If, however, within the time frame set forth in the Original Seller Agreement, NC Capital has not caused the defect to be remedied, NC Capital will be required to either (a) substitute a Substitute Mortgage Loan for the defective mortgage loan, if permitted under the terms of the Original Seller Agreement, or (b) repurchase the defective mortgage loan. The substitution or repurchase is required to be effected in the same manner as a substitution or repurchase for a material breach of a mortgage loan representation and warranty, as described below under “—Representations and Warranties Relating to the Mortgage Loans.” The obligation of NC Capital to cure the defect or to substitute or repurchase the defective mortgage loan will constitute the sole remedies available to the holders of the certificates and the trustee relating to the defect.

Representations and Warranties Relating to the Mortgage Loans

Pursuant to the pooling and servicing agreement, NC Capital, the responsible party, will make representations and warranties with respect to each mortgage loan, as of the closing date (or an earlier date specified in the pooling and servicing agreement, which may be the cut-off date, the date on which the servicing of the mortgage loan was transferred or the date on which MSMC purchased the mortgage loan from the responsible party), including, but not limited to:

(1)Except with respect to the Delinquent mortgage loans described under “The Mortgage Loan Pool—General” in this free writing prospectus, no payment required under the mortgage loan is more than 30 days Delinquent nor has any payment under the mortgage loan been more than 30 days Delinquent at any time since the origination of the mortgage loan;

(2)Except as described in representation (1) above with respect to certain Delinquent mortgage loans, to the best of NC Capital’s knowledge, there are no defaults in complying with the terms of the mortgage, and all taxes, governmental assessments, insurance premiums, water, sewer and municipal charges, leasehold payments or ground rents which previously became due and owing have been paid, or an escrow of funds has been established in an amount sufficient to pay for every such item which remains unpaid and which has been assessed but is not yet due and payable;

(3)The terms of the mortgage note and mortgage have not been impaired, waived, altered or modified in any respect from the date of origination, except by a written instrument which has been recorded, if necessary to protect the interests of the purchaser. No mortgagor has been released, in whole or in part, except in connection with an assumption agreement approved by the title insurer, to the extent required by the policy, and which assumption agreement is part of the mortgage loan file;

(4)The mortgage loan is not subject to any right of rescission, set off, counterclaim or defense, including, without limitation, the defense of usury, nor will the operation of any of the terms of the mortgage note or the mortgage, or the exercise of any right under the mortgage note or the mortgage, render either the mortgage note or the mortgage unenforceable, in whole or in part, and no such right of rescission, set off, counterclaim or defense has been asserted with respect thereto, and no mortgagor was a debtor in any state or federal bankruptcy or insolvency proceeding at the time the mortgage loan was originated;

(5)Pursuant to the terms of the mortgage, all buildings or other improvements upon the mortgaged property are insured by a generally acceptable insurer against loss by fire, hazards of extended coverage and such other hazards as are provided for in the Fannie Mae Guides or by Freddie Mac;

(6)Any and all requirements of any federal, state or local law, including, without limitation, usury, truth in lending, real estate settlement procedures, consumer credit protection, equal credit opportunity, disclosure and all predatory and abusive lending laws applicable to the mortgage loan have been complied with, including, without limitation, any provisions therein relating to Prepayment Premiums, and the consummation of the transactions contemplated by the pooling and servicing agreement will not involve the violation of any such laws or regulations;

(7)The mortgage has not been satisfied, cancelled, subordinated or rescinded, in whole or in part, and the mortgaged property has not been released from the lien of the mortgage, in whole or in part, nor has any instrument been executed that would effect any such release, cancellation, subordination or rescission. The responsible party has not waived the performance by the mortgagor of any action, if the mortgagor’s failure to perform such action would cause the mortgage loan to be in default, nor has the responsible party waived any default resulting from any action or inaction by the mortgagor;

(8)The mortgage is a valid, subsisting, enforceable and perfected first lien or second lien (as applicable) on the mortgaged property, including all buildings and improvements on the mortgaged property and all installations and mechanical, electrical, plumbing, heating and air conditioning systems located in or annexed to such buildings, and all additions, alterations and replacements made at any time with respect to the foregoing. The lien of the mortgage is subject only to:

(i)with respect to any second lien mortgage loan, the lien of the first mortgage on the related mortgaged property;

(ii)the lien of current real property taxes and assessments not yet due and payable;

(iii)covenants, conditions and restrictions, rights of way, easements and other matters of the public record as of the date of recording acceptable to prudent mortgage lending institutions generally and specifically referred to in the lender’s title insurance policy delivered to the originator of the mortgage loan and (a) specifically referred to or otherwise considered in the appraisal made for the originator of the mortgage loan or (b) which do not adversely affect the appraised value of the mortgaged property set forth in such appraisal; and

(iv)other matters to which like properties are commonly subject which do not materially interfere with the benefits of the security intended to be provided by the mortgage or the use, enjoyment, value or marketability of the related mortgaged property;

(9)The mortgage note and the mortgage and any other agreement executed and delivered by a mortgagor in connection with a mortgage loan are genuine, and each is the legal, valid and binding obligation of the signatory enforceable in accordance with its terms (including, without limitation, any provisions relating to Prepayment Premiums). All parties to the mortgage note, the mortgage and any other such related agreement had legal capacity to enter into the mortgage loan and to execute and deliver the mortgage note, the mortgage and any such agreement, and the mortgage note, the mortgage and any other such related agreement have been duly and properly executed by other such related parties. No fraud, error, omission, misrepresentation, negligence or similar occurrence with respect to a mortgage loan has taken place on the part of any person, including without limitation, the mortgagor, any appraiser, any builder or developer, or any other party involved in the origination of the mortgage loan;

(10)The mortgage loan is covered by an American Land Title Association lender’s title insurance policy, or with respect to any mortgage loan for which the related mortgaged property is located in California a California Land Title Association lender’s title insurance policy, or other generally acceptable form of policy or insurance acceptable to Fannie Mae or Freddie Mac with respect to mortgage loans and each such title insurance policy is issued by a title insurer acceptable to Fannie Mae or Freddie Mac and qualified to do business in the jurisdiction where the mortgaged property is located, insuring the responsible party, its successors and assigns, as to the first priority lien or second priority lien, as applicable, of the mortgage in the original principal amount of the mortgage loan, subject only to the exceptions contained in clauses (i), (ii), (iii) and (iv) of representation (8) above;

(11)Except as described in representation (1) above with respect to certain Delinquent mortgage loans, other than payments due but not yet 30 or more days Delinquent, there is no default, breach, violation or event which would permit acceleration existing under the mortgage or the mortgage note and no event which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event which would permit acceleration, and neither the responsible party nor its affiliates or any of their respective predecessors have waived any default, breach, violation or event which would permit acceleration;

(12)The mortgage contains customary and enforceable provisions that render the rights and remedies of the holder of the mortgage adequate for the realization against the mortgaged property of the benefits of the security provided by the mortgaged property, including, (i) in the case of a mortgage designated as a deed of trust, by trustee’s sale, and (ii) otherwise by judicial foreclosure. Upon default by a mortgagor on a mortgage loan and foreclosure on, or trustee’s sale of, the mortgaged property pursuant to the proper procedures, the holder of the mortgage loan will be able to deliver good and merchantable title to the mortgaged property. There is no homestead or other exemption available to a mortgagor which would interfere with the right to sell the mortgaged property at a trustee’s sale or the right to foreclose the mortgage, subject to applicable federal and state laws and judicial precedent with respect to bankruptcy and right of redemption or similar law;

(13)The mortgaged property is lawfully occupied under applicable law. All inspections, licenses and certificates required to be made or issued with respect to all occupied portions of the mortgaged property and, with respect to the use and occupancy of the same, including, but not limited to, certificates of occupancy and fire underwriting certificates, have been made or obtained from the appropriate authorities;

(14)There is no proceeding pending or threatened for the total or partial condemnation of the mortgaged property. The mortgaged property is undamaged by waste, fire, earthquake or earth movement, windstorm, flood, tornado or other casualty so as to affect adversely the value of the mortgaged property as security for the mortgage loan or the use for which the premises were intended and each mortgaged property is in good repair;

(15)No action, inaction or event has occurred and no state of facts exists or has existed that has resulted or will result in the exclusion from, denial of, or defense to coverage under any insurance policy related to the mortgage loans, irrespective of the cause of such failure of coverage;

(16)The mortgage file contains an appraisal of the related mortgaged property signed by a qualified appraiser, appointed by the responsible party, who had no interest, direct or indirect, in the mortgaged property or in any loan made on the security of the mortgaged property, and whose compensation is not affected by the approval or disapproval of the mortgage loan, and the appraisal and appraiser both satisfy the requirements of Fannie Mae or Freddie Mac and Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations promulgated thereunder, all as in effect on the date the mortgage loan was originated;

(17)None of the mortgage loans is (a) covered by the Home Ownership and Equity Protection Act of 1994, or (b) classified as a “high cost home,” “threshold,” “covered,” “high risk home,” “predatory” or similar loan under any other applicable federal, state or local law (or a similarly classified loan using different terminology under a law imposing heightened regulatory scrutiny or additional legal liability for residential mortgage loans having high interest rates, points and/or fees);

(18)None of the mortgage loans has a Prepayment Premium period at origination in excess of three years;

(19)None of the mortgage loans secured by property located in the State of Georgia was originated on or after October 1, 2002 and prior to March 7, 2003;

(20)NC Capital Corporation has, in its capacity as prior servicer of the mortgage loans, fully furnished, in accordance with the Fair Credit Reporting Act and its implementing regulations, accurate and complete information in its borrower credit files to Equifax, Experian and Trans Union Credit Information Company, on a monthly basis;

(21)No mortgagor was required to purchase any credit life, disability, property, accident, unemployment or health insurance product as a condition of obtaining the extension of credit. No mortgagor obtained a prepaid single premium credit life, disability, property, accident, unemployment or health insurance policy in connection with the origination of the mortgage loan. No proceeds from any mortgage loan were used to purchase single premium credit insurance policies as part of the origination of, or as a condition to closing, such mortgage loan; and

(22)No mortgage loan originated on or after July 1, 2004 requires the related mortgagor to submit to arbitration to resolve any dispute arising out of or relating in any way to the mortgage loan transaction.

Pursuant to the pooling and servicing agreement, upon the discovery by any of the responsible party, the servicers, the depositor or the trustee that any of the representations and warranties contained in the pooling and servicing agreement have been breached in any material respect as of the date made, with the result that value of, or the interests of the trustee or the holders of the certificates in the related mortgage loan were materially and adversely affected, the party discovering such breach is required to give prompt written notice to the other parties. Subject to certain provisions of the pooling and servicing agreement, within sixty days of the earlier to occur of the responsible party’s discovery or its receipt of notice of any such breach with respect to a mortgage loan transferred by it, the responsible party will be required to:

·   promptly cure such breach in all material respects;

·   if such substitution would occur prior to the second anniversary of the closing date, remove each mortgage loan which has given rise to the requirement for action by the responsible party, substitute one or more Substitute Mortgage Loans and, if the outstanding principal balance of such Substitute Mortgage Loans as of the date of such substitution is less than the outstanding principal balance of the replaced mortgage loans as of the date of substitution, deliver to the trust as part of the amounts remitted by the applicable servicer with respect to the related distribution date the amount of such shortfall plus all accrued and unpaid interest on the replaced mortgage loans and all related unreimbursed servicing advances (a “Substitution Adjustment Amount”); or

·   purchase such mortgage loan at a price equal to the unpaid principal balance of such mortgage loan as of the date of purchase, plus all related accrued and unpaid interest, plus the amount of any unreimbursed servicing advances made by the applicable servicer or other expenses of such servicer or trustee relating to the mortgage loan in breach.

Notwithstanding the foregoing, pursuant to the terms of the pooling and servicing agreement, in the event of discovery by any party to the pooling and servicing agreement (i) that a mortgage loan does not constitute a “qualified mortgage” within the meaning of Section 860G(a)(3) of the Code resulting from a breach of any representation or warranty contained in the pooling and servicing agreement or (ii) of a breach of the representations and warranties listed as numbers (17), (18), (19), (20), (21), (22) or (23) in the second preceding full paragraph, the responsible party will be required to repurchase the related mortgage loan at the purchase price within sixty days of such discovery or receipt of notice. The purchase price with respect to such mortgage loan will be deposited into the distribution account on the next succeeding Servicer Remittance Date after deducting any amounts received in respect of such repurchased mortgage loan or mortgage loans and being held in the distribution account for future distribution to the extent such amounts have not yet been applied to principal or interest on such mortgage loan.

The Original Seller Agreement requires the responsible party to repurchase any mortgage loan where the borrower fails to make its first payment after the date on which the responsible party sold that mortgage loan. It is possible that a borrower with respect to a mortgage loan transferred to the trust might have failed to make its first payment after the original sale date. In that circumstance, the trustee will be obligated to direct the responsible party to repurchase such mortgage loan from the trust at the repurchase price described in the second preceding paragraph.

In addition, the responsible party is obligated to indemnify the depositor, any of its affiliates, the servicers, the trustee and the trust for any third party claims arising out of a breach by the responsible party of representations or warranties regarding the mortgage loans. The obligations of the responsible party to cure such breach or to substitute or purchase any mortgage loan and to indemnify constitute the sole remedies respecting a material breach of any such representation or warranty to the holders of the certificates, the servicers, the trustee, the depositor and any of its affiliates.

The depositor will also represent that (a) no group I mortgage loan has a Prepayment Premium period in excess of three years and (b) the original principal balance of each group I mortgage loan was within Freddie Mac’s and Fannie Mae’s dollar amount limits for conforming one- to-four family mortgage loans. In the event of a breach by the depositor of either of these representations and warranties, the depositor will be obligated to cure, repurchase or substitute the applicable mortgage loan in the same manner as is set forth above with respect to breaches of representations and warranties made by the responsible party regarding the mortgage loans. The obligation of the depositor under the pooling and servicing agreement to cure, repurchase or substitute any mortgage loan as to which a breach of either of these representations and warranties has occurred and is continuing will constitute the sole remedies against the depositor respecting such breach available to the holders of the certificates or the trustee.

Payments on the Mortgage Loans

The pooling and servicing agreement provides that each servicer is required to establish and maintain a collection account. The pooling and servicing agreement permits each servicer to direct any depository institution maintaining the related collection account to invest the funds in the related collection account in one or more eligible investments that mature, unless payable on demand, no later than the business day preceding the Servicer Remittance Date, as described below.

Each servicer is obligated to deposit or cause to be deposited in the related collection account, within two business days after receipt, amounts representing the following payments and other collections received by it on or with respect to the mortgage loans after the cut-off date, other than in respect of monthly payments on the mortgage loans due and accrued on each mortgage loan up to and including any due date occurring prior to the cut-off date:

·   all payments on account of principal, including prepayments of principal on the mortgage loans;

·   all payments on account of interest, net of the servicing fee, on the mortgage loans;

·   all Insurance Proceeds to the extent such Insurance Proceeds are not to be applied to the restoration of the related mortgaged property or released to the related borrower in accordance with the express requirements of law or in accordance with prudent and customary servicing practices, Condemnation Proceeds and Liquidation Proceeds;

·   all other amounts required to be deposited in the related collection account pursuant to the pooling and servicing agreement; and

·   any amounts required to be deposited in connection with net losses realized on investments of funds in the related collection account.

Neither servicer is permitted to commingle funds in the related collection account with any other funds or assets.

The trustee will be obligated to set up a distribution account with respect to the certificates into which each servicer will be required to deposit or cause to be deposited the funds required to be remitted by such servicer on the Servicer Remittance Date. The pooling and servicing agreement permits but does not require the trustee to invest the funds in the distribution account in one or more eligible investments that mature on or prior to the next distribution date.

The funds required to be remitted by the servicers for a Servicer Remittance Date will be equal to the sum, without duplication, of:

·   all collections of scheduled principal and interest on the mortgage loans received by such servicer on or prior to the related Determination Date;

·   all principal prepayments, Insurance Proceeds, Condemnation Proceeds and Liquidation Proceeds, if any, collected by such servicer during the related Prepayment Period;

·   all P&I Advances made by such servicer with respect to payments due to be received on the mortgage loans on the related due date but not received by the related Determination Date; and

·   any other amounts required to be placed in the related collection account by such servicer pursuant to the pooling and servicing agreement;

but excluding the following:

(a)   for any mortgage loan with respect to which either servicer has previously made an unreimbursed P&I Advance, amounts received on such mortgage loan that represent late payments of principal and interest, Insurance Proceeds, Condemnation Proceeds or Liquidation Proceeds, to the extent of such unreimbursed P&I Advance;

(b)   amounts received on a particular mortgage loan with respect to which such servicer has previously made an unreimbursed servicing advance, to the extent of such unreimbursed servicing advance;

(c)   for that Servicer Remittance Date, the aggregate servicing fee;

(d)   all net income from eligible investments that are held in the related collection account for the account of such servicer;

(e)   all amounts actually recovered by such servicer in respect of late fees, assumption fees and similar fees;

(f)   for all mortgage loans for which P&I Advances or servicing advances are determined to be non-recoverable, all amounts equal to unreimbursed P&I Advances and servicing advances for such mortgage loans;

(g)   certain other amounts which are reimbursable to the depositor or the servicers, as provided in the pooling and servicing agreement; and

(h)   all collections of principal and interest not required to be remitted on that Servicer Remittance Date.

The amounts described in clauses (a) through (h) above may be withdrawn by the servicers from the applicable collection account on or prior to each Servicer Remittance Date.

Distributions

Distributions on the certificates will be required to be made by the trustee on the 25^th day of each month, or, if that day is not a business day, on the first business day thereafter, commencing in February 2007, to the persons in whose names the certificates are registered on the related Record Date.

Distributions on each distribution date will be made by check mailed to the address of the person entitled to the distribution as it appears on the applicable certificate register or, in the case of a certificateholder who has so notified the trustee in writing in accordance with the pooling and servicing agreement, by wire transfer in immediately available funds to the account of that certificateholder at a bank or other depository institution having appropriate wire transfer facilities. However, the final distribution in retirement of the certificates will be made only upon presentment and surrender of those certificates at the office of the trustee designated from time to time for those purposes. Initially, the trustee designates its offices located at DB Services Tennessee, 648 Grassmere Park Road, Nashville, Tennessee 37211-3658 for those purposes.

Administration Fees

As described under the definition of “Available Funds” included in the “Glossary” in this free writing prospectus, funds collected on the mortgage loans that are available for distribution to certificateholders will be net of the servicing fee and trustee fee payable on each mortgage loan. On each distribution date, the servicers and the trustee will be entitled to their fee prior to the certificateholders receiving any distributions. The servicing fee and trustee fee for any distribution date for any mortgage loan will be an amount equal to one-twelfth of the applicable servicing fee rate or trustee fee rate, as applicable, on the Stated Principal Balance of such mortgage loan as of the close of business on the date immediately preceding the related Due Period. The following table identifies the per annum fee rate applicable in calculating the servicing fee and the trustee fee.

Fee	Per Annum Fee Rate
Servicing Fee	0.50%
Trustee Fee	less than or equal to 0.02%

In addition to the servicing fee and the trustee fee, funds collected on the mortgage loans that are available for distribution to the certificateholders will also be net of any indemnification payments made to the depositor, the servicers or the trustee, as described under “The Pooling and Servicing Agreement—Certain Matters Regarding the Depositor, the Servicers and the Trustee” in this free writing prospectus and “The Agreements—Matters Regarding the Master Servicer and the Depositor” in the prospectus, and reimbursements for certain unanticipated expenses borne by the depositor, the servicers or the trustee, as described in this free writing prospectus and the accompanying prospectus.

Priority of Distributions Among Certificates

As more fully described in this free writing prospectus, distributions on the certificates and payments to the Swap Account will be made monthly on each distribution date from Available Funds and will be made to the classes of certificates and the Swap Provider generally in the following order of priority:

(i)to make certain payments to the Swap Account for the benefit of the Swap Provider, as further described below under “—Distributions of Interest and Principal”;

(ii)to current interest on each class of certificates and previously unpaid interest on the Class A certificates, in the order and subject to the priorities set forth below under “—Distributions of Interest and Principal”;

(iii)to principal on the classes of certificates then entitled to receive distributions of principal, in the order and subject to the priorities set forth below under “—Distributions of Interest and Principal”;

(iv)to unpaid interest and Unpaid Realized Loss Amounts on the Subordinated Certificates, in the order and subject to the priorities described below under “—Distributions of Interest and Principal”; and

(v)to deposit into the Excess Reserve Fund Account to cover any Basis Risk CarryForward Amounts on the Offered Certificates, and, after making certain termination payments, if any, to the Swap Account for the benefit of the Swap Provider, finally to be released to the Class X certificates,

in each case subject to certain limitations set forth below under “—Distributions of Interest and Principal.”

Distributions of Interest and Principal

For any distribution date, the “Pass Through Rate” for each class of Offered Certificates will be as set forth below:

(a)   for the Class A-1 certificates, a per annum rate equal to the least of (1) One Month LIBOR plus the related fixed margin for the Class A-1 certificates and that distribution date, (2) the Group I Loan Cap (as defined below) and (3) the WAC Cap (as defined below);

(b)   for the Class A-2a, Class A-2b, Class A-2c and Class A-2d certificates, a per annum rate equal to the least of (1) One Month LIBOR plus the related fixed margin for the applicable class and that distribution date, (2) the Group II Loan Cap (as defined below) and (3) the WAC Cap; and

(c)   for the Class M and Class B certificates, a per annum rate equal to the lesser of (1) One Month LIBOR plus the related fixed margin for the applicable class and that distribution date and (2) the WAC Cap.

The fixed margin for each class of Offered Certificates is as follows: Class A-1, [___]%; Class A-2a, [___]%; Class A-2b, [___]%; Class A-2c, [___]%; Class A-2d, [___]%; Class M-1, [___]%; Class M-2, [___]%; Class M-3, [___]%; Class M-4, [___]%; Class M-5, [___]%; Class M-6, [___]%; Class B-1, [___]%; Class B-2, [___]%; Class B-3, [___]%; and Class B-4, [___]%. On the distribution date immediately following the distribution date on which a servicer has the right to purchase all of the mortgage loans as described under “The Pooling and Servicing Agreement—Termination; Optional Clean-up Call” in this free writing prospectus and each distribution date thereafter, the fixed margin for each class of Offered Certificates will increase to the following: Class A-1, [___]%; Class A-2a, [___]%; Class A-2b, [___]%; Class A-2c, [___]%; Class A-2d, [___]%; Class M-1, [___]%; Class M-2, [___]%; Class M-3, [___]%; Class M-4, [___]%; Class M-5, [___]%; Class M-6, [___]%; Class B-1, [___]%; Class B-2, [___]%; Class B-3, [___]%; and Class B-4, [___]%.

The “Group I Loan Cap” for any distribution date is the weighted average of the interest rates for each group I mortgage loan (in each case, less the applicable Expense Fee Rate) then in effect at the beginning of the related Due Period less the Swap Payment Rate (as defined below), adjusted, in each case, to accrue on the basis of a 360-day year and the actual number of days in the related Interest Accrual Period.

The “Group II Loan Cap” for any distribution date is the weighted average of the interest rates for each group II mortgage loan (in each case, less the applicable Expense Fee Rate) then in effect at the beginning of the related Due Period less the Swap Payment Rate, adjusted, in each case, to accrue on the basis of a 360-day year and the actual number of days in the related Interest Accrual Period.

The “WAC Cap” for any distribution date is the weighted average of the interest rates for each mortgage loan (in each case, less the applicable Expense Fee Rate) then in effect at the beginning of the related Due Period less the Swap Payment Rate, adjusted, in each case, to accrue on the basis of a 360-day year and the actual number of days in the related Interest Accrual Period.

The “Swap Payment Rate” for any distribution date is a fraction (expressed as a percentage), the numerator of which is any Net Swap Payment or Swap Termination Payment (other than a Defaulted Swap Termination Payment) owed to the Swap Provider from Available Funds for such distribution date and the denominator of which is the aggregate Stated Principal Balance of the mortgage loans at the beginning of the related Due Period, multiplied by 12.

On each distribution date, distributions in reduction of the Class Certificate Balance of the certificates entitled to receive distributions of principal are required to be made in an amount equal to the Principal Distribution Amount. The “Principal Distribution Amount” for each distribution date will equal the sum of (i) the Basic Principal Distribution Amount for that distribution date and (ii) the Extra Principal Distribution Amount for that distribution date.

Distributions will be determined in part based on the performance of individual loan groups and for such purpose any Net Swap Payments or Swap Termination Payments owed to the Swap Provider from Available Funds will be allocated between loan groups based on the respective aggregate Stated Principal Balance of the mortgage loans in each loan group.

On each distribution date, the trustee will be required to make the distributions and transfers specified below from the Available Funds then on deposit in the distribution account in the following order of priority:

(i)to the holders of each class of Offered Certificates and to the Swap Account in the following order of priority:

(a)   to the Swap Account, the sum of (x) all Net Swap Payments and (y) any Swap Termination Payment owed to the Swap Provider (to the extent a Replacement Swap Provider Payment has not been previously paid to the Swap Provider by the trust), other than Defaulted Swap Termination Payments owed to the Swap Provider;

(b)   concurrently, (1) from the Interest Remittance Amount related to the group I mortgage loans, to the Class A-1 certificates, the related Accrued Certificate Interest and Unpaid Interest Amount for the Class A-1 certificates, and (2) from the Interest Remittance Amount related to the group II mortgage loans, to the Class A-2a, Class A-2b, Class A-2c and Class A-2d certificates, pro rata (based upon their respective entitlements to those amounts), the related Accrued Certificate Interest and Unpaid Interest Amounts for those classes of certificates; provided, that, if the Interest Remittance Amount for any group is insufficient to make the related payments set forth in clauses (i)(b)(1) or (i)(b)(2) above, any Interest Remittance Amount relating to the other group remaining after payment of the related Accrued Certificate Interest and Unpaid Interest Amounts will be available to cover that shortfall;

(c)   from any remaining Interest Remittance Amounts, to the Class M-1 certificates, the Accrued Certificate Interest for that class;

(d)   from any remaining Interest Remittance Amounts, to the Class M-2 certificates, the Accrued Certificate Interest for that class;

(e)   from any remaining Interest Remittance Amounts, to the Class M-3 certificates, the Accrued Certificate Interest for that class;

(f)   from any remaining Interest Remittance Amounts, to the Class M-4 certificates, the Accrued Certificate Interest for that class;

(g)   from any remaining Interest Remittance Amounts, to the Class M-5 certificates, the Accrued Certificate Interest for that class;

(h)   from any remaining Interest Remittance Amounts, to the Class M-6 certificates, the Accrued Certificate Interest for that class;

(i)   from any remaining Interest Remittance Amounts, to the Class B-1 certificates, the Accrued Certificate Interest for that class;

(j)   from any remaining Interest Remittance Amounts, to the Class B-2 certificates, the Accrued Certificate Interest for that class;

(k)   from any remaining Interest Remittance Amounts, to the Class B-3 certificates, the Accrued Certificate Interest for that class; and

(l)   from any remaining Interest Remittance Amounts, to the Class B-4 certificates, the Accrued Certificate Interest for that class;

(ii)(A) on each distribution date before the Stepdown Date or with respect to which a Trigger Event is in effect, to the holders of the class or classes of Offered Certificates then entitled to distributions of principal as set forth below, an amount equal to the Principal Distribution Amount in the following order of priority:

(a)   to the Class A certificates, allocated among those classes as described under “—Allocation of Principal Payments to Class A Certificates” below until their respective Class Certificate Balances are reduced to zero; and

(b)   sequentially to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3 and Class B-4 certificates, in that order, until their respective Class Certificate Balances are reduced to zero;

(B)on each distribution date on and after the Stepdown Date and as long as a Trigger Event is not in effect, to the holders of the class or classes of Offered Certificates then entitled to distributions of principal in an amount equal to the Principal Distribution Amount in the following amounts and order of priority:

(a)   to the Class A certificates, the lesser of (x) the Principal Distribution Amount and (y) the Class A Principal Distribution Amount, allocated among those classes as described under “—Allocation of Principal Payments to Class A Certificates” below until their respective Class Certificate Balances are reduced to zero;

(b)   to the Class M-1 certificates, the lesser of (x) the excess of (i) the Principal Distribution Amount over (ii) the amounts distributed to the Class A certificateholders in clause (ii)(B)(a) above and (y) the Class M-1 Principal Distribution Amount, until their Class Certificate Balance is reduced to zero;

(c)   to the Class M-2 certificates, the lesser of (x) the excess of (i) the Principal Distribution Amount over (ii) the amounts distributed to the Class A certificateholders in clause (ii)(B)(a) above and to the Class M-1 certificateholders in clause (ii)(B)(b) above and (y) the Class M-2 Principal Distribution Amount, until their Class Certificate Balance is reduced to zero;

(d)   to the Class M-3 certificates, the lesser of (x) the excess of (i) the Principal Distribution Amount over (ii) the amounts distributed to the Class A certificateholders in clause (ii)(B)(a) above, to the Class M-1 certificateholders in clause (ii)(B)(b) above and to the Class M-2 certificateholders in clause (ii)(B)(c) above and (y) the Class M-3 Principal Distribution Amount, until their Class Certificate Balance is reduced to zero;

(e)   to the Class M-4 certificates, the lesser of (x) the excess of (i) the Principal Distribution Amount over (ii) the amounts distributed to the Class A certificateholders in clause (ii)(B)(a) above, to the Class M-1 certificateholders in clause (ii)(B)(b) above, to the Class M-2 certificateholders in clause (ii)(B)(c) above and to the Class M-3 certificateholders in clause (ii)(B)(d) above and (y) the Class M-4 Principal Distribution Amount, until their Class Certificate Balance is reduced to zero;

(f)   to the Class M-5 certificates, the lesser of (x) the excess of (i) the Principal Distribution Amount over (ii) the amounts distributed to the Class A certificateholders in clause (ii)(B)(a) above, to the Class M-1 certificateholders in clause (ii)(B)(b) above, to the Class M-2 certificateholders in clause (ii)(B)(c) above, to the Class M-3 certificateholders in clause (ii)(B)(d) above and to the Class M-4 certificateholders in clause (ii)(B)(e) above and (y) the Class M-5 Principal Distribution Amount, until their Class Certificate Balance is reduced to zero;

(g)   to the Class M-6 certificates, the lesser of (x) the excess of (i) the Principal Distribution Amount over (ii) the amounts distributed to the Class A certificateholders in clause (ii)(B)(a) above, to the Class M-1 certificateholders in clause (ii)(B)(b) above, to the Class M-2 certificateholders in clause (ii)(B)(c) above, to the Class M-3 certificateholders in clause (ii)(B)(d) above, to the Class M-4 certificateholders in clause (ii)(B)(e) above and to the Class M-5 certificateholders in clause (ii)(B)(f) above and (y) the Class M-6 Principal Distribution Amount, until their Class Certificate Balance is reduced to zero;

(h)   to the Class B-1 certificates, the lesser of (x) the excess of (i) the Principal Distribution Amount over (ii) the amounts distributed to the Class A certificateholders in clause (ii)(B)(a) above, to the Class M-1 certificateholders in clause (ii)(B)(b) above, to the Class M-2 certificateholders in clause (ii)(B)(c) above, to the Class M-3 certificateholders in clause (ii)(B)(d) above, to the Class M-4 certificateholders in clause (ii)(B)(e) above, to the Class M-5 certificateholders in clause (ii)(B)(f) above and to the Class M-6 certificateholders in clause (ii)(B)(g) above and (y) the Class B-1 Principal Distribution Amount, until their Class Certificate Balance is reduced to zero;

(i)   to the Class B-2 certificates, the lesser of (x) the excess of (i) the Principal Distribution Amount over (ii) the amounts distributed to the Class A certificateholders in clause (ii)(B)(a) above, to the Class M-1 certificateholders in clause (ii)(B)(b) above, to the Class M-2 certificateholders in clause (ii)(B)(c) above, to the Class M-3 certificateholders in clause (ii)(B)(d) above, to the Class M-4 certificateholders in clause (ii)(B)(e) above, to the Class M-5 certificateholders in clause (ii)(B)(f) above, to the Class M-6 certificateholders in clause (ii)(B)(g) above and to the Class B-1 certificateholders in clause (ii)(B)(h) above and (y) the Class B-2 Principal Distribution Amount, until their Class Certificate Balance is reduced to zero;

(j)   to the Class B-3 certificates, the lesser of (x) the excess of (i) the Principal Distribution Amount over (ii) the amounts distributed to the Class A certificateholders in clause (ii)(B)(a) above, to the Class M-1 certificateholders in clause (ii)(B)(b) above, to the Class M-2 certificateholders in clause (ii)(B)(c) above, to the Class M-3 certificateholders in clause (ii)(B)(d) above, to the Class M-4 certificateholders in clause (ii)(B)(e) above, to the Class M-5 certificateholders in clause (ii)(B)(f) above, to the Class M-6 certificateholders in clause (ii)(B)(g) above, to the Class B-1 certificateholders in clause (ii)(B)(h) above and to the Class B-2 certificateholders in clause (ii)(B)(i) above and (y) the Class B-3 Principal Distribution Amount, until their Class Certificate Balance is reduced to zero;

(k)   to the Class B-4 certificates, the lesser of (x) the excess of (i) the Principal Distribution Amount over (ii) the amounts distributed to the Class A certificateholders in clause (ii)(B)(a) above, to the Class M-1 certificateholders in clause (ii)(B)(b) above, to the Class M-2 certificateholders in clause (ii)(B)(c) above, to the Class M-3 certificateholders in clause (ii)(B)(d) above, to the Class M-4 certificateholders in clause (ii)(B)(e) above, to the Class M-5 certificateholders in clause (ii)(B)(f) above, to the Class M-6 certificateholders in clause (ii)(B)(g) above, to the Class B-1 certificateholders in clause (ii)(B)(h) above, to the Class B-2 certificateholders in clause (ii)(B)(i) above and to the Class B-3 certificateholders in clause (ii)(B)(j) above and (y) the Class B-4 Principal Distribution Amount, until their Class Certificate Balance is reduced to zero; and

(iii)any amount remaining after the distributions in clauses (i) and (ii) above is required to be distributed in the following order of priority with respect to the certificates:

(a)   to the holders of the Class M-1 certificates, any Unpaid Interest Amount for that class;

(b)   to the holders of the Class M-1 certificates, any Unpaid Realized Loss Amount for that class;

(c)   to the holders of the Class M-2 certificates, any Unpaid Interest Amount for that class;

(d)   to the holders of the Class M-2 certificates, any Unpaid Realized Loss Amount for that class;

(e)   to the holders of the Class M-3 certificates, any Unpaid Interest Amount for that class;

(f)   to the holders of the Class M-3 certificates, any Unpaid Realized Loss Amount for that class;

(g)   to the holders of the Class M-4 certificates, any Unpaid Interest Amount for that class;

(h)   to the holders of the Class M-4 certificates, any Unpaid Realized Loss Amount for that class;

(i)   to the holders of the Class M-5 certificates, any Unpaid Interest Amount for that class;

(j)   to the holders of the Class M-5 certificates, any Unpaid Realized Loss Amount for that class;

(k)   to the holders of the Class M-6 certificates, any Unpaid Interest Amount for that class;

(l)   to the holders of the Class M-6 certificates, any Unpaid Realized Loss Amount for that class;

(m)   to the holders of the Class B-1 certificates, any Unpaid Interest Amount for that class;

(n)   to the holders of the Class B-1 certificates, any Unpaid Realized Loss Amount for that class;

(o)   to the holders of the Class B-2 certificates, any Unpaid Interest Amount for that class;

(p)   to the holders of the Class B-2 certificates, any Unpaid Realized Loss Amount for that class;

(q)   to the holders of the Class B-3 certificates, any Unpaid Interest Amount for that class;

(r)   to the holders of the Class B-3 certificates, any Unpaid Realized Loss Amount for that class;

(s)   to the holders of the Class B-4 certificates, any Unpaid Interest Amount for that class;

(t)   to the holders of the Class B-4 certificates, any Unpaid Realized Loss Amount for that class;

(u)   to the Excess Reserve Fund Account, the amount of any Basis Risk Payment for that distribution date;

(v)   from any Interest Rate Cap Payment on deposit in the Excess Reserve Fund Account with respect to that distribution date, an amount equal to any unpaid Basis Risk CarryForward Amount with respect to the Offered Certificates for that distribution date, allocated (a) first, among those classes of certificates, pro rata, based upon their respective Class Certificate Balances and (b) second, any remaining amounts allocated among those classes of certificates, pro rata, based on any Basis Risk CarryForward Amounts remaining unpaid, in order to reimburse such unpaid amounts;

(w)   from funds on deposit in the Excess Reserve Fund Account (not including any Interest Rate Cap Payment included in that account), an amount equal to any remaining unpaid Basis Risk CarryForward Amount with respect to the Offered Certificates to the Offered Certificates in the same order and priority in which Accrued Certificate Interest is allocated among those classes of certificates, with the allocation to the Class A certificates being (a) first, among those classes of certificates pro rata, based on their respective Class Certificate Balances and (b) second, any remaining amounts to those classes of certificates, pro rata, based on any Basis Risk CarryForward Amounts remaining unpaid, in order to reimburse such unpaid amounts;

(x)   to the Swap Account, the amount of any Defaulted Swap Termination Payment owed to the Swap Provider;

(y)   to the holders of the Class X certificates, any remaining amount of Available Funds, including any amount remaining in the Excess Reserve Account on such distribution date (including any remaining Interest Rate Cap Payments on deposit in such account);

(z)   if such distribution date follows the Prepayment Period during which occurs the latest date on which a prepayment charge may be required to be paid in respect of any mortgage loan, to the holders of the Class P certificates, in reduction of the Certificate Principal Balance thereof, until the Certificate Principal Balance thereof is reduced to zero; and

(aa)   to the holders of the Class R and Class R-X certificates, any remaining amount.

On each distribution date, prior to the distribution on any other class of certificates, the trustee is required to distribute to the holders of the Class P certificates all amounts representing Prepayment Premiums in respect of the mortgage loans received during the related Prepayment Period.

If on any distribution date, after giving effect to all distributions of principal as described above and allocations of payments from the Swap Account to pay principal as described under “—Swap Account” below, the aggregate Class Certificate Balances of the Offered Certificates exceeds the aggregate Stated Principal Balance of the mortgage loans for that distribution date, the Class Certificate Balance of the applicable Class M or Class B certificates will be reduced, in inverse order of seniority (beginning with the Class B-4 certificates) by an amount equal to that excess, until that Class Certificate Balance is reduced to zero. This reduction of a Class Certificate Balance for Realized Losses is referred to as an “Applied Realized Loss Amount.” In the event Applied Realized Loss Amounts are allocated to any class of certificates, its Class Certificate Balance will be reduced by the amount so allocated, and no funds will be distributable with respect to interest or Basis Risk CarryForward Amounts on the amounts written down on that distribution date or any future distribution dates, even if funds are otherwise available for distribution. Notwithstanding the foregoing, if after an Applied Realized Loss Amount is allocated to reduce the Class Certificate Balance of any class of certificates, amounts are received with respect to any mortgage loan or related mortgaged property that had previously been liquidated or otherwise disposed of (any such amount being referred to as a “Subsequent Recovery”), the Class Certificate Balance of each class of certificates that has been previously reduced by Applied Realized Loss Amounts will be increased, in order of seniority, by the amount of the Subsequent Recoveries (but not in excess of the Unpaid Realized Loss Amount for the applicable class of Subordinated Certificates for the related distribution date). Any Subsequent Recovery that is received during a Prepayment Period will be treated as Liquidation Proceeds and included as part of the Principal Remittance Amount for the related distribution date.

On any distribution date, any shortfalls resulting from the application of the Relief Act and any prepayment interest shortfalls not covered by Compensating Interest payments from the applicable servicer (as further described in “The Pooling and Servicing Agreement—Prepayment Interest Shortfalls” in this free writing prospectus) will be allocated first to reduce the amounts otherwise distributable on the Class X certificates, and thereafter as a reduction to the Accrued Certificate Interest for the Offered Certificates on a pro rata basis based on the respective amounts of interest accrued on those certificates for that distribution date. The holders of the Offered Certificates will not be entitled to reimbursement for the allocation of any Relief Act shortfalls or prepayment interest shortfalls described in the preceding sentence.

Allocation of Principal Payments to Class A Certificates

All principal allocated to the holders of the Class A certificates on any distribution date will be allocated concurrently, between the Class A-1 certificates (the “Group I Class A Certificates”), on the one hand, and the Class A-2a, Class A-2b, Class A-2c and Class A-2d certificates (collectively, the “Group II Class A Certificates”), on the other hand, based on the Class A Principal Allocation Percentage for the Group I Class A Certificates and the Group II Class A Certificates, as applicable, for that distribution date. The Group I Class A Certificates and the Group II Class A Certificates are each a “Class A Certificate Group.” However, if the Class Certificate Balances of the Class A certificates in either Class A Certificate Group are reduced to zero, then the remaining amount of principal allocable to such Class A certificates on that distribution date, and the amount of principal allocable to the Class A certificates on all subsequent distribution dates, will be allocated to the holders of the Class A certificates in the other Class A Certificate Group remaining outstanding, in accordance with the principal allocations described in this paragraph, until their respective Class Certificate Balances have been reduced to zero. Any payments of principal to the Group I Class A Certificates will be made first from payments relating to the group I mortgage loans, and any payments of principal to the Group II Class A Certificates will be made first from payments relating to the group II mortgage loans.

Any principal distributions allocated to the Group II Class A Certificates are required to be allocated sequentially, to the Class A-2a, Class A-2b, Class A-2c and Class A-2d certificates, in that order, until their respective Class Certificate Balances have been reduced to zero. However, on and after the distribution date on which the aggregate Class Certificate Balances of the Subordinated Certificates and the principal balance of the Class X certificates have been reduced to zero, any principal distributions allocated to the Group II Class A Certificates are required to be allocated pro rata among the classes of Group II Class A Certificates, based on their respective Class Certificate Balances, until their respective Class Certificate Balances have been reduced to zero.

Swap Account

On or prior to any distribution date during which the interest rate swap agreement is in effect, Swap Termination Payments, including, without duplication, payments received by the trust as a result of entering into a replacement interest rate swap agreement (such payment, a “Replacement Swap Provider Payment”), Net Swap Payments owed to the Swap Provider and Net Swap Receipts for that distribution date will be deposited into a trust account (the “Swap Account”) established by the trustee as part of the trust fund. Funds in the Swap Account will be distributed in the following order of priority:

(a)   to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that distribution date;

(b)   to the Swap Provider, any Swap Termination Payment, other than a Defaulted Swap Termination Payment, owed to the Swap Provider for that distribution date;

(c)   to the Class A certificates, to pay Accrued Certificate Interest and, if applicable, any Unpaid Interest Amounts as described in clause (i) in the ninth full paragraph of “—Distributions of Interest and Principal” above, to the extent unpaid from Available Funds;

(d)   sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3 and Class B-4 certificates, in that order, to pay Accrued Certificate Interest and, if applicable, Unpaid Interest Amounts as described in clauses (i) and (iii) in the ninth full paragraph of “—Distributions of Interest and Principal” above, to the extent unpaid from Available Funds;

(e)   to the Offered Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in clause (ii)(A) or clause (ii)(B), as applicable, in the ninth full paragraph of “—Distributions of Interest and Principal” above, but only to the extent necessary to restore the Subordinated Amount to the Specified Subordinated Amount as a result of prior or current Realized Losses not previously reimbursed, after giving effect to payments and distributions from Available Funds;

(f)   to the Class A certificates, to pay any Basis Risk CarryForward Amounts pro rata, based on their Class Certificate Balances for such distribution date, up to the Swap Payment Allocation for each class of Class A certificates and to the extent unpaid from Available Funds (including funds on deposit in the Excess Reserve Fund Account);

(g)   sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3 and Class B-4 certificates, to pay any Basis Risk CarryForward Amounts, up to the Swap Payment Allocation for each class of Class M and Class B certificates and to the extent unpaid from Available Funds (including funds on deposit in the Excess Reserve Fund Account);

(h)   to the Offered Certificates, any remaining unpaid Basis Risk CarryForward Amount, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount after the allocation of payments as set forth in clauses (f) and (g) above;

(i)   sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3 and Class B-4 certificates, to pay any Unpaid Realized Loss Amounts, to the extent unpaid from Available Funds;

(j)   to the Swap Provider, any Defaulted Swap Termination Payment owed to the Swap Provider for that distribution date; and

(k)   to the holders of the Class X certificates, any remaining amounts.

Notwithstanding the foregoing, in the event that the trust receives a Swap Termination Payment, the trustee will be required to use the Swap Termination Payment to enter into a replacement interest rate swap agreement as directed by the depositor with a successor swap provider (or its guarantor) meeting the ratings requirements set forth in the interest rate swap agreement being terminated on the same remaining terms as those in the interest rate swap agreement being terminated, so long as the Swap Termination Payment is sufficient to obtain such replacement interest rate swap agreement. In the event that the trust receives a Swap Termination Payment, and a successor swap provider (or its guarantor) cannot be obtained, then the trustee will be required to deposit any Swap Termination Payment into the reserve account that is a sub-account of the Swap Account. On each subsequent distribution date (so long as funds are available in such reserve account), the trustee will be required to withdraw from the reserve account and deposit into the Swap Account an amount equal to the amount of any Net Swap Receipt due the trust (calculated in accordance with the terms of the original interest rate swap agreement) and treat such amount as a Net Swap Receipt for purposes of determining the distributions from the Swap Account. The remaining amount in the reserve account will remain in that account and not treated as a Swap Termination Payment for purposes of determining the distributions from the Swap Account until the final distribution date.

In the event that the trust enters into a replacement interest rate swap agreement and the trust is entitled to receive a Replacement Swap Provider Payment, the trustee will be required to direct the replacement swap provider (or its guarantor) to make such Replacement Swap Provider Payment to the Swap Account. Notwithstanding the foregoing, any Replacement Swap Provider Payment will be made from the Swap Account to the Swap Provider immediately upon receipt of such payment, regardless of whether the date of receipt is a distribution date. If any Replacement Swap Provider Payment is made to an account other than the Swap Account, then any Replacement Swap Provider Payment will be required to be paid to the Swap Provider immediately upon receipt of such Replacement Swap Provider Payment by the trust, regardless of whether the date of receipt is a distribution date. The Swap Provider will have first priority to any Replacement Swap Provider Payment over the payment by the trust to certificateholders, the servicers, the responsible party, the trustee or any other person. If any such amount received from a replacement swap provider and paid to the Swap Provider is less than the full amount of a Swap Termination Payment owed to the Swap Provider, the remaining amount of the Swap Termination Payment will remain payable to the Swap Provider in accordance with the priority of payment described under “—Distribution of Interest and Principal” above.

The “Swap Payment Allocation” for any class of certificates and any distribution date is that class’s pro rata share of the Net Swap Receipts, if any, for that distribution date, based on the Class Certificate Balances of the classes of certificates.

The Swap Account will not be an asset of any REMIC. The Swap Account will terminate upon the payment of funds from the Swap Account on the distribution date following the termination of, and satisfaction of all obligations under, the interest rate swap agreement.

Calculation of One-Month LIBOR

On each LIBOR Determination Date, the trustee will be required to determine One-Month LIBOR for the next Interest Accrual Period for the Offered Certificates.

Excess Reserve Fund Account

The “Basis Risk Payment” for any distribution date will be the aggregate of the Basis Risk CarryForward Amounts, for that date. However, the payment with respect to any distribution date cannot exceed the amount otherwise distributable on the Class X certificates and Interest Rate Cap Payments or payable from the Swap Account.

If on any distribution date, the Pass-Through Rate for any class of Offered Certificates is based upon the Group I Loan Cap, the Group II Loan Cap or the WAC Cap, as applicable, the sum of (x) the excess of (i) the amount of Accrued Certificate Interest that class of certificates would otherwise have been distributable on that distribution date had the Pass-Through Rate not been subject to the Group I Loan Cap, the Group II Loan Cap or the WAC Cap, over (ii) the amount of Accrued Certificate Interest that class of certificates received on that distribution date, based on the lesser of (1) the Group I Loan Cap or the Group II Loan Cap, as applicable, and (2) the WAC Cap and (y) the unpaid portion of any such excess described in clause (x) from prior distribution dates (and related accrued interest at the then applicable Pass-Through Rate on that class of certificates, without giving effect the Group I Loan Cap, the Group II Loan Cap or the WAC Cap, as applicable) is the “Basis Risk CarryForward Amount” on those classes of certificates. Any Basis Risk CarryForward Amount on any class of certificates will be allocated on that distribution date or future distribution dates from and to the extent of funds available for distribution to that class of certificates in the Excess Reserve Fund Account, including any Interest Rate Cap Payments, with respect to that distribution date (each as described in this free writing prospectus) and from Net Swap Receipts that are available for payment of Basis Risk CarryForward Amounts from the Swap Account. The ratings on the certificates do not address the likelihood of the payment of any Basis Risk CarryForward Amount.

Pursuant to the pooling and servicing agreement, an account (referred to as the “Excess Reserve Fund Account”) will be established, which is held in trust, as part of the trust fund, by the trustee. Amounts on deposit in the Excess Reserve Fund Account will not be invested. The Excess Reserve Fund Account will not be an asset of any REMIC. Holders of each of the Offered Certificates will be entitled to receive payments from the Excess Reserve Fund Account, in the manner described in this free writing prospectus, in an amount equal to any Basis Risk CarryForward Amount for that class of certificates. The Excess Reserve Fund Account is required to be funded from amounts otherwise to be paid to the Class X certificates and any Interest Rate Cap Payments. Any distribution by the trustee from amounts in the Excess Reserve Fund Account is required to be made on the applicable distribution date. Any Basis Risk CarryForward Amounts remaining after amounts in the Excess Reserve Fund Account are used are payable from the Swap Account in the priority specified in “—Swap Account” above.

Interest Rate Swap Agreement

On the closing date, the trustee on behalf of a separate trust (which will hold the interest rate swap agreement) will enter into an interest rate swap agreement with MSCS, as Swap Provider. Under the interest rate swap agreement, on or before each distribution date commencing with the distribution date in January 2008 and ending with the distribution date in January 2013, the trust will be obligated to pay to the Swap Provider a fixed payment for that distribution date, equal to the product of (x) a fixed rate equal to 5.05% per annum, (y) the product of (i) the notional amount for that distribution date set forth on the schedule attached as Annex II hereto and (ii) the multiplier indicated on Annex II, and (z) a fraction, the numerator of which is 30 and the denominator of which is 360, and the Swap Provider will be obligated to pay to the trust a floating payment for that distribution date equal to the product of (x) One-Month LIBOR, as determined pursuant to the interest rate swap agreement, for the related calculation period (as defined in the interest rate swap agreement), (y) the product of (i) the notional amount for that distribution date set forth on the schedule attached as Annex II hereto and (ii) the multiplier indicated on Annex II, and (z) a fraction, the numerator of which is equal to the actual number of days in the related calculation period and the denominator of which is 360. To the extent that a fixed payment exceeds the floating payment payable with respect to any distribution date during which the interest rate swap agreement is in effect, amounts otherwise available to certificateholders will be applied on or prior to such distribution date to make a net payment to the Swap Provider (each, a “Net Swap Payment”), and to the extent that the floating payment exceeds the fixed payment payable with respect to any distribution date during which the interest rate swap agreement is in effect, the Swap Provider will owe a net payment to the trust on or prior to such distribution date (each, a “Net Swap Receipt”).

All payments due to the Swap Provider under the interest rate swap agreement will be payable from funds then on deposit in the Swap Account on each applicable distribution date in accordance with the priority of payments described under “—Swap Account” above and from funds received from a replacement swap provider on any date on which such funds are received by the trust. Any Replacement Swap Provider Payment or Swap Termination Payment (other than a Defaulted Swap Termination Payment) due to the Swap Provider will be payable on a senior basis in accordance with the priority of payments, and any Defaulted Swap Termination Payment owed by the trust to the Swap Provider will be payable by the trust on a subordinated basis. However, to the extent any Replacement Swap Provider Payment or any Swap Termination Payment (other than a Defaulted Swap Termination Payment) is to be received by the trust, the trust will direct any replacement swap provider to deposit any such payment into the Swap Account, the Swap Provider that is being replaced will have first priority to those payments over certificateholders, the servicers and the trustee, and the trust will pay from the Swap Account to the Swap Provider the amount so received immediately upon receipt. However, that to the extent the Replacement Swap Provider Payment received by the Swap Provider being replaced is less than the Swap Termination Payment owed to the Swap Provider, any remaining amounts will be paid to the Swap Provider on the subsequent distribution date in accordance with the priority of payments described under “—Swap Account” above.

A “Swap Termination Payment” is a termination payment required to be made by either the trust or the Swap Provider pursuant to the interest rate swap agreement as a result of termination of the interest rate swap agreement.

The interest rate swap agreement can be terminated upon an event of default under that agreement or a termination event under that agreement. Events of default under the interest rate swap agreement include, among other things, the following:

·   failure to make a payment due under the interest rate swap agreement after notice of such failure is received and expiration of a specified grace period,

·   failure by the Swap Provider to comply with or perform certain agreements or obligations required under the interest rate swap agreement after notice of such failure is received and expiration of a specified grace period,

·   failure by the Swap Provider to comply with or perform the collateral posting requirements of the interest rate swap agreement if a Second Tier Downgrade Termination Event has occurred and is continuing,

·   certain representations by the Swap Provider or its credit support provider prove to have been incorrect or misleading in any material respect,

·   cross-default by the Swap Provider or its credit support provider relating generally to its obligations in respect of borrowed money in excess of a threshold specified in the interest rate swap agreement,

·   certain insolvency or bankruptcy events, and

·   a merger by a party to the interest rate swap agreement without an assumption of such party’s obligations under the interest rate swap agreement,

each as further described in the interest rate swap agreement.

Termination events under the interest rate swap agreement include, among other things:

·   illegality (which generally relates to changes in law causing it to become unlawful for either party (or its guarantor, if applicable) to perform its obligations under the interest rate swap agreement or guaranty, as applicable),

·   a tax event (which generally relates to certain changes in law that result in one party receiving a payment under the interest rate swap agreement from which an amount has been deducted or withheld for or on account of taxes and for which that party is not grossed up, or with respect to which the other party is required to pay additional amounts),

·   a tax event upon merger (which generally relates to certain taxes being deducted or withheld from payments to either party following a merger of either party),

·   upon the irrevocable direction to dissolve or otherwise terminate the trust following which all assets of the trust will be liquidated and the proceeds of such liquidation will be distributed to certificateholders,

·   upon the exercise of the optional termination of the trust by a servicer as described under “The Pooling and Servicing Agreement—Termination; Optional Clean-up Call,” and

·   the pooling and servicing agreement is amended without the consent of the Swap Provider and such amendment materially and adversely affects the rights or interests of the Swap Provider.

“Defaulted Swap Termination Payment” means any termination payment required to be made by the trust to the Swap Provider pursuant to the interest rate swap agreement as a result of an event of default under the interest rate swap agreement with respect to which the Swap Provider is the defaulting party or a termination event under that agreement (other than illegality or a tax event of the Swap Provider) with respect to which the Swap Provider is the sole affected party.

In addition to the termination events specified above, it will be an additional termination event under the interest rate swap agreement (such event, a “First Tier Downgrade Termination Event”) if (x) any of the rating agencies downgrades the Swap Provider (or its guarantor) below the First Tier Required Swap Counterparty Rating and (y) at least one of the following events has not occurred (except to the extent otherwise approved by the rating agencies):

(1)within the time period specified in the interest rate swap agreement with respect to such downgrade, the Swap Provider (or its guarantor) transfers the interest rate swap agreement, in whole, but not in part, to a counterparty that satisfies the Second Tier Required Swap Counterparty Rating or whose present and future obligations under the interest rate swap agreement are guaranteed by a guarantor that satisfies the Second Tier Required Swap Counterparty Rating;

(2)within the time period specified in the interest rate swap agreement with respect to such downgrade, the Swap Provider (or its guarantor) collateralizes its exposure to the trust pursuant to the ISDA Credit Support Annex entered into on the closing date by the Swap Provider and the trust (the “ISDA Credit Support Annex”);

(3)within the time period specified in the interest rate swap agreement with respect to such downgrade, the obligations of the Swap Provider (or its guarantor) under the interest rate swap agreement are guaranteed by a person or entity that satisfies the First Tier Required Swap Counterparty Rating; or

(4)within the time period specified in the interest rate swap agreement with respect to such downgrade, the Swap Provider (or its guarantor) takes such other steps, if any, to enable the trust to remedy a downgrade by the rating agencies below the First Tier Required Swap Counterparty Rating.

It will also be an additional termination event under the interest rate swap agreement (such event a “Second Tier Downgrade Termination Event”) if (x) any of the rating agencies downgrades the Swap Provider (or its guarantor) below the Second Tier Required Swap Counterparty Rating or the Swap Provider (or its guarantor) has its rating by S&P or Moody’s withdrawn and (y) at least one of the following events has not occurred (except to the extent otherwise approved by the rating agencies): (1) within the time period specified in the interest rate swap agreement with respect to such downgrade, the Swap Provider (or its guarantor) at its sole cost and expense transfers the interest rate swap agreement, in whole, but not in part, to a counterparty that satisfies the Second Tier Required Swap Counterparty Rating or whose present and future obligations under the interest rate swap agreement are guaranteed by a guarantor that satisfies the Second Tier Required Swap Counterparty Rating; or (2) within the time period specified in the interest rate swap agreement with respect to such downgrade, the obligations of the Swap Provider (or its guarantor) under the interest rate swap agreement are guaranteed by a person or entity that satisfies the Second Tier Required Swap Counterparty Rating (in the case of Moody’s) and the First Tier Required Swap Counterparty Rating (in the case of S&P). Pending compliance with clauses (1) or (2), the Swap Provider (or its guarantor) will be required, within the time period specified in the interest rate swap agreement, to collateralize its exposure to the trust pursuant to the ISDA Credit Support Annex.

If the trust is unable to or, if applicable, chooses not to obtain a substitute interest rate swap agreement in the event that the interest rate swap agreement is terminated, interest distributable on the certificates will be paid from amounts received on the mortgage loans without the benefit of an interest rate swap agreement or a substitute interest rate swap agreement.

On or after the closing date, (i) the trust may, with the consent of the Swap Provider and the rating agencies, assign or transfer all or a portion of the interest rate swap agreement, (ii) the Swap Provider may, subject to giving reasonable notice of such assignment to the rating agencies and subject to the conditions of assignment set forth in the interest rate swap agreement, assign its obligations under the interest rate swap agreement, (iii) with the consent of the Swap Provider and the rating agencies, the interest rate swap agreement may be amended by the trust.

Upon the request of the depositor, the Swap Provider may, at its option, but is not required to, (i) provide any financial information required by Item 1115 of the Asset Backed Securities Regulation, 17 C.F.R. §§ 229.1100-229.1123 (“Regulation AB”) with respect to the Swap Provider or any guarantor of the Swap Provider if providing the financial information of a guarantor is permitted under Regulation AB or (ii) assign the interest rate swap agreement at its own cost to another entity that has agreed to take the actions described in clause (i) of this sentence with respect to itself (and which has the Second Tier Required Swap Counterparty Rating, subject to giving reasonable notice of such assignment to the rating agencies and the other conditions of assignment set forth in the interest rate swap agreement).

The interest rate swap agreement is scheduled to terminate by its terms following the distribution date in January 2013 and upon termination of the interest rate swap agreement no further amounts will be paid to the Swap Provider by the trust and no further amounts will be paid to the trust by the Swap Provider.

The sponsor’s estimate of maximum probable exposure under the interest rate swap agreement is less than 10% of the aggregate Stated Principal Balance of the mortgage loans as of the cut-off date.

Interest Rate Cap Agreement

The Offered Certificates will have the benefit of an interest rate cap agreement provided by MSCS, as interest rate cap provider. All obligations of the trust under the interest rate cap agreement will be paid on or prior to the closing date.

The interest rate cap agreement will have an initial notional amount of $120,000,764.32. In connection with the first 11 distribution dates, the Cap Provider will be obligated under the interest rate cap agreement to pay to the trustee, for deposit into the Excess Reserve Fund Account, an amount equal to the product of (a) the excess, if any, of the then current One-Month LIBOR rate (as defined in the interest rate cap agreement), over a cap strike rate of 7.35% per annum and (b) the product of the notional amount and the related multiplier set forth on the schedule attached as Annex III to this free writing prospectus for that distribution date, determined on an “actual/360” basis (the “Interest Rate Cap Payment”). The Cap Provider’s obligations under the interest rate cap agreement will terminate following the distribution date in December 2007.

Events of default under the interest rate cap agreement include, among other things, the following:

·   failure to make a payment due under the interest rate cap agreement after notice of such failure is received and expiration of a specified grace period,

·   failure by the Cap Provider to comply with or perform certain agreements or obligations required under the interest rate cap agreement after notice of such failure is received and expiration of a specified grace period,

·   certain representations by the Cap Provider or its credit support provider prove to have been incorrect or misleading in any material respect,

·   cross-default by the Cap Provider or its credit support provider relating generally to its obligations in respect of borrowed money in excess of a threshold specified in the interest rate cap agreement,

·   certain insolvency or bankruptcy events, and

·   a merger by a party to the interest rate cap agreement without an assumption of such party’s obligations under the interest rate cap agreement,

each as further described in the interest rate cap agreement.

Termination events under the interest rate cap agreement include, among other things:

·   illegality (which generally relates to changes in law causing it to become unlawful for either party (or its guarantor, if applicable) to perform its obligations under the interest rate cap agreement or guaranty, as applicable),

·   a tax event (which generally relates to certain changes in law that result in one party receiving a payment under the interest rate cap agreement from which an amount has been deducted or withheld for or on account of taxes and for which that party is not grossed up, or with respect to which the other party is required to pay additional amounts),

·   a tax event upon merger (which generally relates to certain taxes being deducted or withheld from payments to either party following a merger of either party),

·   upon the irrevocable direction to dissolve or otherwise terminate the trust following which all assets of the trust will be liquidated and the proceeds of such liquidation will be distributed to certificateholders,

·   upon the exercise of the optional termination of the trust by a servicer as described under “The Pooling and Servicing Agreement—Termination; Optional Clean-up Call,” and

·   the pooling and servicing agreement is amended without the consent of the Cap Provider and such amendment materially and adversely affects the rights or interests of the Cap Provider.

The specified notional amount and related multiplier for the interest rate cap agreement are set forth on Annex III to this free writing prospectus.

Amounts, if any, payable under the interest rate cap agreement with respect to any distribution date will be used to cover shortfalls in payments of interest on the Offered Certificates if the pass-through rates on any of the Offered Certificates are limited for any of the first 11 distribution dates due to the caps on their pass-through rates described in this free writing prospectus.

The interest rate cap agreement will be governed by and construed in accordance with the law of the State of New York. The obligations of the Cap Provider are limited to those specifically set forth in the interest rate cap agreement.

The sponsor’s estimate of maximum probable exposure under the interest rate cap agreement is less than 10% of the aggregate Stated Principal Balance of the mortgage loans as of the cut-off date.

Overcollateralization Provisions

The pooling and servicing agreement requires that the Total Monthly Excess Spread, if any, on each distribution date be applied as an accelerated payment of principal of the Offered Certificates, but only to the limited extent described below.

The application of Total Monthly Excess Spread to the payment of Extra Principal Distribution Amount to the class or classes of certificates then entitled to distributions of principal has the effect of accelerating the amortization of those certificates relative to the amortization of the related mortgage loans. The portion, if any, of the Available Funds and any Interest Rate Cap Payment not required to be distributed to holders of the Offered Certificates or paid to the Swap Account as described above on any distribution date will be paid to the holders of the Class X certificates and will not be available on any future distribution date to cover Extra Principal Distribution Amounts or Basis Risk CarryForward Amounts, Unpaid Interest Amounts or Unpaid Realized Loss Amounts.

With respect to any distribution date, the excess, if any, of (a) the aggregate Stated Principal Balance of the mortgage loans for that distribution date over (b) the aggregate Class Certificate Balance of the Offered Certificates as of that date (after taking into account the distribution of the Principal Remittance Amount on those certificates on that distribution date) is the “Subordinated Amount” as of that distribution date. The pooling and servicing agreement requires that the Total Monthly Excess Spread be applied as an accelerated payment of principal on the certificates then entitled to receive distributions of principal to the extent that the Specified Subordinated Amount exceeds the Subordinated Amount as of that distribution date (the excess is referred to as a “Subordination Deficiency”). Any amount of Total Monthly Excess Spread actually applied as an accelerated payment of principal is an “Extra Principal Distribution Amount.” The required level of the Subordinated Amount with respect to a distribution date is the “Specified Subordinated Amount” and is set forth in the definition of Specified Subordinated Amount in the “Glossary” in this free writing prospectus. On or after the Stepdown Date, the Specified Subordinated Amount may decrease, subject to an overcollateralization floor and certain triggers. If a Trigger Event (as defined in the “Glossary” in this free writing prospectus) exists, the Specified Subordinated Amount may not “step down.” Total Monthly Excess Spread (only to the extent needed to maintain the Specified Subordinated Amount) will then be applied to the payment of principal of the class or classes of certificates then entitled to distributions of principal during the period that a Trigger Event exists.

In the event that a Specified Subordinated Amount is permitted to decrease or “step down” on a distribution date in the future, the pooling and servicing agreement provides that some or all of the principal that would otherwise be distributed to the holders of the Offered Certificates on that distribution date will be distributed to the holders of the Class X certificates on that distribution date (to the extent not required to pay Unpaid Interest Amounts, Unpaid Realized Loss Amounts or Basis Risk CarryForward Amounts to the Offered Certificates or a Defaulted Swap Termination Payment owed to the Swap Provider) until the Excess Subordinated Amount is reduced to zero. This has the effect of decelerating the amortization of the Offered Certificates relative to the amortization of the mortgage loans, and of reducing the related Subordinated Amount. With respect to any distribution date, the excess, if any, of (a) the Subordinated Amount on that distribution date over (b) the Specified Subordinated Amount is the “Excess Subordinated Amount.” If, on any distribution date on or after the Stepdown Date on which a Trigger Event does not exist, the Excess Subordinated Amount is, after taking into account all other distributions and allocations to be made on that distribution date, greater than zero (i.e., the related Subordinated Amount is or would be greater than the related Specified Subordinated Amount), then any amounts relating to principal which would otherwise be distributed to the holders of the Offered Certificates on that distribution date will instead be distributed to the holders of the Class X certificates (to the extent not required to pay Unpaid Interest Amounts, Unpaid Realized Loss Amounts or Basis Risk CarryForward Amounts to the Offered Certificates or a Defaulted Swap Termination Payment to MSCS, as swap provider) in an amount equal to the lesser of (x) the Excess Subordinated Amount and (y) the Net Monthly Excess Cash Flow (referred to as the “Subordination Reduction Amount” for that distribution date). The “Net Monthly Excess Cash Flow” is the amount of Available Funds remaining on a distribution date after taking into account the amount necessary to make all payments of interest and principal to the Offered Certificates and amounts required to be paid to MSCS, as swap provider, on that distribution date (other than Replacement Swap Provider Payments and Defaulted Swap Termination Payments).

Reports to Certificateholders

On each distribution date the trustee will make available via its internet website (as noted below) to each holder of an Offered Certificate a distribution report, based on information provided to the trustee by the servicers and the interest rate swap provider, containing the following:

·   the amount of the distribution allocable to principal, separately identifying the aggregate amount of any principal prepayments and Liquidation Proceeds included in that distribution;

·   the amount of the distribution allocable to interest, any Unpaid Interest Amounts included in such distribution and any remaining Unpaid Interest Amounts after giving effect to such distribution, any Basis Risk CarryForward Amount for such distribution date and the amount of all Basis Risk CarryForward Amounts covered by withdrawals from the Excess Reserve Fund Account on such distribution date;

·   if the distribution to the holders of such class of certificates is less than the full amount that would be distributable to such holders if there were sufficient funds available for such distribution, the amount of the shortfall and the allocation of the shortfall as between principal and interest, including any Basis Risk CarryForward Amount not covered by amounts in the Excess Reserve Fund Account;

·   the Class Certificate Balance of each class of certificates after giving effect to the distribution of principal on such distribution date;

·   the aggregate Stated Principal Balance of the mortgage loans for the following distribution date;

·   the amount of the expenses and fees paid to or retained by the servicers and paid to or retained by the trustee with respect to such distribution date;

·   the Pass-Through Rate for each such class of certificates with respect to such distribution date;

·   the amount of advances included in the distribution on such distribution date and the aggregate amount of advances reported by the servicers (and the trustee as successor servicer and any other successor servicer, if applicable) as outstanding as of the close of business on the Determination Date immediately preceding such distribution date;

·   the number and aggregate outstanding principal balances of mortgage loans (1) as to which the scheduled payment is Delinquent 31 to 60 days, 61 to 90 days or 91 days or more, (2) that have become REO Property, (3) that are in foreclosure and (4) that are in bankruptcy, in each case as of the close of business on the last business day of the immediately preceding month;

·   with respect to all mortgage loans that became REO properties during the preceding calendar month, the aggregate number of such mortgage loans and the aggregate Stated Principal Balance of such mortgage loans as of the close of business on the last Business Day of the immediately preceding month;

·   the total number and principal balance of any REO properties (and market value, if available) as of the close of business on the last Business Day of the immediately preceding month;

·   whether a Trigger Event has occurred and is continuing (including the calculation demonstrating the existence of the Trigger Event);

·   the amount on deposit in the Excess Reserve Fund Account (after giving effect to distributions on such distribution date);

·   in the aggregate and for each class of certificates, the aggregate amount of Applied Realized Loss Amounts incurred during the preceding calendar month and aggregate Applied Realized Loss Amounts through such distribution date;

·   the amount of any Net Monthly Excess Cash Flow on such distribution date and the allocation of it to the certificateholders with respect to Unpaid Interest Amounts, Unpaid Realized Loss Amounts or Basis Risk CarryForward Amounts;

·   the Subordinated Amount and Specified Subordinated Amount;

·   Prepayment Premiums collected by the servicers;

·   the percentage equal to the aggregate realized losses divided by the aggregate Stated Principal Balance of the mortgage loans as of the cut-off date;

·   the amount distributed on the Class X certificates;

·   the amount of any Subsequent Recoveries for such distribution date;

·   the Record Date for such distribution date; and

·   updated mortgage loan information, such as weighted average interest rate, and weighted average remaining term.

The trustee will provide the monthly distribution report via the trustee’s internet website. The trustee’s website will initially be located at https://www.tss.db.com/invr and assistance in using the website can be obtained by calling the trustee’s investor relations desk at 1-800-735-7777. Parties that are unable to use the website are entitled to have a paper copy mailed to them via first class mail by calling the investor relations desk and requesting a copy. As a condition to access the trustee’s internet website, the trustee may require registration and the acceptance of a disclaimer. The trustee will have the right to change the way the monthly statements to certificateholders are distributed in order to make such distribution more convenient and/or more accessible to the above parties and the trustee will provide timely and adequate notification to all above parties regarding any such changes. The trustee will not be liable for the dissemination of information in accordance with the pooling and servicing agreement.

The trustee will also be entitled to rely on, but will not be responsible for, the content or accuracy of any information provided by third parties for purposes of preparing the monthly distribution report and may affix to that report any disclaimer it deems appropriate in its reasonable discretion (without suggesting liability on the part of any other party to the pooling and servicing agreement).

THE POOLING AND SERVICING AGREEMENT

General

The pooling and servicing agreement will be entered into among the depositor, the servicers, the trustee and NC Capital, as responsible party. The pooling and servicing agreement will govern the rights and responsibilities of the parties responsible for administering the issuing entity.

Each servicer will be required to use the same care as it customarily employs in servicing and administering similar mortgage loans for its own account, in accordance with customary and standard mortgage servicing practices of mortgage lenders and loan servicers administering similar mortgage loans and in accordance with the terms of the pooling and servicing agreement.

Subservicers

Each servicer may enter into subservicing agreements with subservicers for the servicing and administration of the mortgage loans. However, no subservicing agreement will take effect until a specified period after written notice is received by both the trustee and the depositor. The terms of any subservicing agreement may not be inconsistent with any of the provisions of the pooling and servicing agreement. Any subservicing agreement will include the provision that such agreement may be immediately terminated by the depositor or the trustee without fee, in accordance with the terms of the pooling and servicing agreement, in the event that either servicer, for any reason, is no longer a servicer (including termination due to a servicer event of default).

Each servicer will remain obligated and primarily liable to the trustee for the servicing and administering of the mortgage loans in accordance with the provisions of the pooling and servicing agreement without diminution of such obligation or liability by virtue of the subservicing agreements or arrangements or by virtue of indemnification from the subservicer and to the same extent and under the same terms and conditions as if such servicer alone were servicing and administering the mortgage loans. Each servicer will be solely liable for all fees owed by it to any subservicer, regardless of whether such servicer’s compensation is sufficient to pay the subservicer fees.

Servicing and Trustee Fees and Other Compensation and Payment of Expenses

As compensation for their activities as servicer under the pooling and servicing agreement, each servicer will be entitled, with respect to each mortgage loan serviced by it, to the servicing fee, which will be retained by such servicer or payable monthly from amounts on deposit in the related collection account. The servicing fee for each distribution date will be an amount equal to one-twelfth of the servicing fee rate for each mortgage loan serviced by the applicable servicer multiplied by the Stated Principal Balance of the mortgage loan as of the first day of the related Due Period (or the cut-off date in the case of the first distribution date). See “Description of the Certificates—Administration Fees” in this free writing prospectus. In addition, each servicer will be entitled to receive, as additional servicing compensation, to the extent permitted by applicable law and the related mortgage notes, any late payment charges, modification fees, assumption fees, non-sufficient fund fees or similar items related to the mortgage loans serviced by such servicer. Each servicer will also be entitled to withdraw from the related collection account any net interest or other income earned on deposits in the related collection account. In addition, the servicers will be entitled to retain any Prepayment Interest Excesses related to the mortgage loans serviced by it for any distribution date to the extent such amounts are not required to offset prepayment interest shortfalls resulting from principal prepayments in full that are received by such servicer during the period from the 16th day through the last day of the month prior to that distribution date (or the entire prior calendar month, in the case of the first distribution date). See “—Prepayment Interest Shortfalls” below. Each servicer will be responsible for any losses relating to the investment of funds in the related collection account. Each servicer will be required to pay all expenses incurred by it in connection with its servicing activities under the pooling and servicing agreement and is not entitled to reimbursement for such expenses except as specifically provided in the pooling and servicing agreement.

As compensation for its activities as trustee under the pooling and servicing agreement, the trustee will be entitled to the trustee fee, which will be remitted to the trustee monthly by the servicer from amounts on deposit in the related collection account. The trustee fee will be an amount equal to one-twelfth of the trustee fee rate for each applicable mortgage loan on the Stated Principal Balance of such mortgage loan as of the close of business on the date immediately preceding the related Due Period. See “Description of the Certificates—Administration Fees” in this free writing prospectus. In addition to the trustee fee, the trustee will be entitled to the benefit of any net interest or other income earned on deposits in the distribution account.

P&I Advances and Servicing Advances

P&I Advances. Each servicer (including the trustee as successor servicer and any other successor servicer, if applicable) is required to make P&I Advances on each Servicer Remittance Date with respect to each mortgage loan it services (other than with respect to the principal portion of any balloon payments), subject to its determination in its good faith business judgment that such advance would be recoverable. The servicers will not be required, however, to make any P&I Advances with respect to reductions in the amount of the monthly payments due on the mortgage loans due to bankruptcy proceedings or the application of the Relief Act. Such P&I Advances by a servicer are reimbursable to that servicer subject to certain conditions and restrictions, and are intended to provide sufficient funds for the payment of interest to the holders of the certificates. Notwithstanding a servicer’s determination in its good faith business judgment that a P&I Advance was recoverable when made, if a P&I Advance becomes a nonrecoverable advance, that servicer will be entitled to reimbursement for that advance from the trust fund. See “Description of the Certificates—Payments on the Mortgage Loans” in this free writing prospectus.

Servicing Advances. Each servicer is required to advance amounts with respect to the mortgage loans it services subject to its determination that such advance would be recoverable, constituting “out-of-pocket” costs and expenses relating to:

·   the preservation, restoration, inspection and protection of the mortgaged property,

·   enforcement or judicial proceedings, including foreclosures, and

·   certain other customary amounts described in the pooling and servicing agreement.

These servicing advances by a servicer are reimbursable to the related servicer subject to certain conditions and restrictions. In the event that, notwithstanding either servicer’s good faith determination at the time the servicing advance was made, that it would be recoverable, the servicing advance becomes a nonrecoverable advance, such servicer will be entitled to reimbursement for that advance from the trust fund.

Recovery of Advances. Each servicer may recover P&I Advances and servicing advances to the extent permitted by the pooling and servicing agreement, including from the collection of principal and interest on the mortgage loans serviced by it that is not required to be remitted in the month of receipt on the Servicer Remittance Date, or, if not recovered from such collections or from the mortgagor on whose behalf such servicing advance or P&I Advance was made, from late collections on the related mortgage loan, including Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds and such other amounts as may be collected by such servicer from the mortgagor or otherwise relating to the mortgage loan. In the event a P&I Advance or a servicing advance becomes a nonrecoverable advance, each servicer may be reimbursed for such advance from the related collection account.

Neither servicer will be required to make any P&I Advance or servicing advance which it determines would be a nonrecoverable P&I Advance or nonrecoverable servicing advance. A P&I Advance or servicing advance is “nonrecoverable” if in the good faith business judgment of either servicer (as stated in an officer’s certificate of such servicer delivered to the trustee), the P&I Advance or servicing advance would not ultimately be recoverable from collections on or proceeds of the related mortgage loan.

Prepayment Interest Shortfalls

In the event of any voluntary principal prepayments in full on any mortgage loans during any Prepayment Period (excluding any payments made upon liquidation of any mortgage loan), each servicer will be obligated to pay, by no later than the Servicer Remittance Date in the following month, compensating interest, without any right of reimbursement, for the amount of shortfalls in interest collections resulting from those full voluntary principal prepayments. The amount of compensating interest payable by each servicer will be equal to the difference between the interest paid by the applicable mortgagors for that month in connection with the voluntary principal prepayments in full and thirty days’ interest on the related mortgage loans, but only to the extent of the servicing fee payable to such servicer for that distribution date (“Compensating Interest”). The amount of those shortfalls (for those mortgage loans that prepay in full from the 16^th day of the month preceding the month in which the distribution date occurs, or from the first day of the preceding calendar month in the case of the first distribution date, through the end of that preceding month) will be first netted against the amount of interest received on mortgage loans serviced by such servicer that prepay from the 1^st day of the month in which the distribution date occurs through the 15^th day of that month representing interest that accrued on those mortgage loans during that period (“Prepayment Interest Excesses”).

Servicer Reports

On a date preceding the applicable distribution date, each servicer is required to deliver to the trustee a servicer remittance report setting forth the information necessary for the trustee to make the distributions set forth under “Description of the Certificates—Distributions of Interest and Principal” in this free writing prospectus and containing the information to be included in the distribution report for that distribution date delivered by the trustee. Each servicer is required to deliver to the trustee in March of each year, starting in 2008, an officer’s certificate stating that:

·   a review of the activities of the applicable servicer during the preceding calendar year and of performance under the pooling and servicing agreement has been made under such officer’s supervision; and

·   to the best of such officer’s knowledge, based on such review, such servicer has fulfilled in all material respects all of its obligations under the pooling and servicing agreement for such year, or, if there has been a failure to fulfill any such obligation in any material respect, specifying each such failure known to such officer and the nature and status of the failure, including the steps being taken by such servicer to remedy the failure.

In addition, in March of each year, starting in 2008, the servicers and the trustee will be required to deliver an assessment of compliance with applicable servicing criteria that contains the following:

·   a statement of the party’s responsibility for assessing compliance with the servicing criteria applicable to it;

·   a statement that the party used the criteria in Item 1122(d) of Regulation AB to assess compliance with the applicable servicing criteria;

·   the party’s assessment of compliance with the applicable servicing criteria during and as of the end of the prior calendar year, setting forth any material instance of noncompliance identified by the party; and

·   a statement that a registered public accounting firm has issued an attestation report on the party’s assessment of compliance with the applicable servicing criteria during and as of the end of the prior calendar year.

Each party that is required to deliver an assessment of compliance will also be required to simultaneously deliver an attestation report of a registered public accounting firm prepared in accordance with the standards for attestation engagements issued or adopted by the Public Company Accounting Oversight Board, that expresses an opinion, or states that an opinion cannot be expressed, concerning the party’s assessment of compliance with the applicable servicing criteria. You may obtain copies of these statements and reports without charge upon written request to the trustee at the address provided in this free writing prospectus.

Collection and Other Servicing Procedures

Each servicer will be responsible for making reasonable efforts to collect all payments called for under the mortgage loans serviced by it and will, consistent with the provisions of the pooling and servicing agreement, follow such collection procedures as it follows with respect to loans held for its own account that are comparable to the mortgage loans. Consistent with the above, each servicer may (i) waive any late payment charge or, if applicable, any penalty interest or (ii) extend the due dates for the monthly payments for a period of not more than 180 days, subject to the provisions of the pooling and servicing agreement.

Each servicer will be required to act with respect to mortgage loans in default, or as to which default is reasonably foreseeable, in accordance with procedures set forth in the pooling and servicing agreement. These procedures among other things, may result in (i) foreclosing on the mortgage loan, (ii) accepting the deed to the related mortgaged property in lieu of foreclosure, (iii) granting the borrower under the mortgage loan a modification or forbearance, which may consist of waiving, modifying or varying any term of such mortgage loan (including modifications that would change the mortgage interest rate, forgive the payment of principal or interest, or extend the final maturity date of such mortgage loan) or (iv) accepting payment from the borrower of an amount less than the unpaid principal balance of the mortgage loan in final satisfaction of the mortgage loan. In addition, the final maturity date of any mortgage loan may not be extended beyond the Final Scheduled Distribution Date for the Offered Certificates.

Each servicer will be required to accurately and fully report its borrower payment histories to three national credit repositories in a timely manner with respect to each mortgage loan serviced by it.

If a mortgaged property has been or is about to be conveyed by the mortgagor, the applicable servicer will be obligated to accelerate the maturity of the mortgage loan, unless such servicer, in its sole business judgment, believes it is unable to enforce that mortgage loan’s “due-on-sale” clause under applicable law or that such enforcement is not in the best interest of the trust fund. If it reasonably believes it may be restricted for any reason from enforcing such a “due-on-sale” clause or that such enforcement is not in the best interest of the trust fund, the applicable servicer may enter into an assumption and modification agreement with the person to whom such property has been or is about to be conveyed, pursuant to which such person becomes liable under the mortgage note.

Any fee collected by either servicer for entering into an assumption agreement will be retained by such servicer as additional servicing compensation. In connection with any such assumption, the mortgage interest rate borne by the mortgage note relating to each mortgage loan may not be decreased. For a description of circumstances in which a servicer may be unable to enforce “due-on-sale” clauses, see “Material Legal Aspects of the Loans—Due-on-Sale Clauses” in the accompanying prospectus.

Hazard Insurance

Each servicer is required to cause to be maintained for each mortgaged property securing any mortgage loan serviced by it a hazard insurance policy with coverage which contains a standard mortgagee’s clause in an amount equal to the least of (a) the maximum insurable value of such mortgaged property, (b) the amount necessary to fully compensate for any damage or loss to the improvements that are a part of such property on a replacement cost basis or (c) the outstanding principal balance of such mortgage loan, but in no event may such amount be less than is necessary to prevent the borrower from becoming a coinsurer under the policy. As set forth above, all amounts collected by either servicer under any hazard policy, except for amounts to be applied to the restoration or repair of the mortgaged property or released to the borrower in accordance with such servicer’s normal servicing procedures, to the extent they constitute net Liquidation Proceeds, Condemnation Proceeds or Insurance Proceeds, will ultimately be deposited in the related collection account. The ability of each servicer to assure that hazard insurance proceeds are appropriately applied may be dependent on its being named as an additional insured under any hazard insurance policy, or upon the extent to which information in this regard is furnished to such servicer by a borrower. The pooling and servicing agreement provides that each servicer may satisfy its obligation to cause hazard policies to be maintained by maintaining a blanket policy issued by an insurer acceptable to the rating agencies, insuring against losses on the mortgage loans serviced by it. If such blanket policy contains a deductible clause, each servicer is obligated to deposit in the related collection account the sums which would have been deposited in such collection account but for such clause.

In general, the standard form of fire and extended coverage policy covers physical damage to or destruction of the improvements on the property by fire, lightning, explosion, smoke, windstorm and hail, and riot, strike and civil commotion, subject to the conditions and exclusions specified in each policy. Although the policies relating to the mortgage loans will be underwritten by different insurers under different state laws in accordance with different applicable state forms and therefore will not contain identical terms and conditions, the terms of the policies are dictated by respective state laws, and most such policies typically do not cover any physical damage resulting from the following: war, revolution, governmental actions, floods and other weather-related causes, earth movement, including earthquakes, landslides and mudflows, nuclear reactions, wet or dry rot, vermin, rodents, insects or domestic animals, theft and, in certain cases, vandalism. The foregoing list is merely indicative of certain kinds of uninsured risks and is not intended to be all-inclusive.

The hazard insurance policies covering the mortgaged properties typically contain a co-insurance clause which in effect requires the insured at all times to carry insurance of a specified percentage, generally 80% to 90%, of the full replacement value of the improvements on the property in order to recover the full amount of any partial loss. If the insured’s coverage falls below this specified percentage, such clause generally provides that the insurer’s liability in the event of partial loss does not exceed the greater of (x) the replacement cost of the improvements less physical depreciation or (y) such proportion of the loss as the amount of insurance carried bears to the specified percentage of the full replacement cost of such improvements.

Since residential properties, generally, have historically appreciated in value over time, if the amount of hazard insurance maintained on the improvements securing the mortgage loans were to decline as the principal balances owing on the improvements decreased, hazard insurance proceeds could be insufficient to restore fully the damaged property in the event of a partial loss.

Realization Upon Defaulted Mortgage Loans

Each servicer will be required to foreclose upon, or otherwise comparably convert to ownership, mortgaged properties securing such of the mortgage loans as come into default when, in the opinion of such servicer, no satisfactory arrangements can be made for the collection of delinquent payments. In connection with such foreclosure or other conversion, each servicer will follow such practices as it deems necessary or advisable and as are in keeping with such servicer’s general loan servicing activities and the pooling and servicing agreement; provided, that neither servicer will be required to expend its own funds in connection with foreclosure or other conversion, correction of a default on a senior mortgage or restoration of any property unless either servicer believes such foreclosure, correction or restoration will increase net Liquidation Proceeds and that such expenses will be recoverable by such servicer.

With respect to any second-lien mortgage loan for which the related first-lien mortgage loan is not included in the mortgage loan pool, if, after such mortgage loan becomes 180 days Delinquent, either servicer determines that a significant net recovery is not possible through foreclosure, the mortgage loan may be charged off and the mortgage loan will be treated as a liquidated mortgage loan, giving rise to a Realized Loss.

Optional Purchase of Delinquent Mortgage Loans

The applicable servicer (or its assignee) may, or upon request of the holders of a majority of the Class X certificates will be required to, purchase from the trust any mortgage loan that is 90 days or more Delinquent or that has been converted to an REO property, subject to certain terms and conditions set forth in the pooling and servicing agreement. The purchase price will be 100% of the unpaid principal balance of the mortgage loan, plus all related accrued and unpaid interest, and the amount of any unreimbursed servicing advances related to the mortgage loan.

Removal and Resignation of a Servicer

The trustee may, and, at the direction of the majority of voting rights in the certificates, is required to, remove either servicer upon the occurrence and continuation beyond the applicable cure period of an event described in clauses (a), (b), (c), (d), (e), (f) and (g) below. Each of the following constitutes a “servicer event of default”:

(a)   any failure by a servicer to remit to the trustee any payment required to be made by such servicer under the terms of the pooling and servicing agreement, which continues unremedied for one business day after the date upon which written notice of such failure, requiring the same to be remedied, is given to the related servicer by the depositor or trustee or to the related servicer, the depositor and the trustee by the holders of certificates entitled to at least 25% of the voting rights in the certificates; or

(b)   any failure on the part of either servicer to duly observe or perform in any material respect any other of the covenants or agreements on the part of such servicer contained in the pooling and servicing agreement, which continues unremedied for a period of 60 days (or a shorter period applicable to certain provisions in the pooling and servicing agreement) after the earlier of (i) the date on which written notice of such failure requiring the same to be remedied, is given to the related servicer by the depositor or trustee, or to the related servicer, the depositor and the trustee by any holders of certificates entitled to at least 25% of the voting rights in the certificates and (ii) actual knowledge of such failure by a servicing officer of the applicable servicer; or

(c)   a decree or order of a court or agency or supervisory authority having jurisdiction in an involuntary case under any present or future federal or state bankruptcy, insolvency or similar law or for the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings, or for the winding up or liquidation of its affairs, is entered against either servicer and such decree or order remains in force, undischarged or unstayed for a period of 60 days; or

(d)   either servicer consents to the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings of or relating to such servicer or of or relating to all or substantially all of such servicer’s property; or

(e)   either servicer admits in writing its inability generally to pay its debts as they become due, file a petition to take advantage of any applicable insolvency or reorganization statute, makes an assignment for the benefit of its creditors, or voluntarily suspends payment of its obligations; or

(f)   any breach of a representation and warranty of either servicer, which materially and adversely affects the interests of the certificateholders and which continues unremedied for a period of thirty days after the date upon which written notice of such breach is given to the related servicer by the trustee or the depositor, or to the related servicer, the trustee or the depositor by the holders of certificates entitled to at least 25% of the voting rights in the certificates; or

(g)   with respect to Saxon, any withdrawal or downgrade of two or more levels of Saxon’s servicer rating by any rating agency that results in a downgrade, qualification or withdrawal of the rating assigned to any class of the certificates by any rating agency.

Except in the limited circumstances permitted under the pooling and servicing agreement, neither servicer may assign its obligations under the pooling and servicing agreement or resign from the obligations and duties imposed on it by the pooling and servicing agreement except by mutual consent of the related servicer, the depositor and the trustee or upon the determination that such servicer’s duties under the pooling and servicing agreement are no longer permissible under applicable law and such incapacity cannot be cured by such servicer without the incurrence of unreasonable expense. No such resignation will become effective until a successor has assumed the related servicer’s responsibilities and obligations in accordance with the pooling and servicing agreement.

Upon removal or resignation of a servicer in accordance with the pooling and servicing agreement, the trustee will be the successor servicer to such servicer. The trustee, as successor servicer, will be obligated to make P&I Advances and servicing advances and certain other advances unless it determines reasonably and in good faith that such advances would not be recoverable. If, however, the trustee is unwilling or unable to act as successor servicer, or if the holders of certificates entitled to at least a majority of the voting rights in the certificates so request, the trustee is required to appoint, or petition a court of competent jurisdiction to appoint, in accordance with the provisions of the pooling and servicing agreement, any established mortgage loan servicing institution acceptable to the rating agencies as such successor servicer in the assumption of all or any part of the responsibilities, duties or liabilities of the predecessor servicer.

Any successor to a servicer will be required to give notice to the borrowers of such change of servicer, in accordance with applicable federal and state law, and will be required, during the term of its service as a servicer, to maintain in force the insurance policy or policies that the servicer is required to maintain.

Each servicer and any successor servicer will be required to be a Fannie Mae-approved or Freddie Mac-approved seller/servicer in good standing, maintain a net worth of at least $30,000,000 (as determined in accordance with generally accepted accounting principles), and maintain its license to do business or service residential mortgage loans in any jurisdictions in which the mortgaged properties related to mortgage loans that it is servicing are located and which require such licensing.

The trustee, as successor servicer, and any other successor servicer is entitled to the same reimbursement for advances and no more than the same servicing compensation (including income earned on the related collection account) as the related servicer or such greater compensation if consented to by the rating agencies rating the Offered Certificates and a majority of the certificateholders. See “—Servicing and Trustee Fees and Other Compensation and Payment of Expenses” above.

Notwithstanding any termination of the activities of a servicer under the pooling and servicing agreement, each servicer will be entitled to receive from the trust fund, prior to transfer of its servicing obligations, payment of all accrued and unpaid servicing fees and reimbursement for all outstanding P&I Advances and servicing advances.

In the event that a servicer is terminated for a servicer event of default, such terminated servicer will be obligated to transfer servicing of the mortgage loans it is servicing, provide notices to the borrowers of such mortgage loans, arrange for and transfer the servicing files to a successor servicer, pay all of such servicer’s own out-of-pocket costs and expenses at its own expense and pay all costs and expenses of all other parties to the pooling and servicing agreement relating to the transfer of the related servicing files to a successor servicer (excluding set-up costs and other administrative expenses of the successor servicer). In the event a servicer is terminated in any other case, the successor servicer will be obligated to pay for such costs and expenses but such servicer will not be entitled to reimbursement for such amounts from the trust fund.

Eligibility Requirements for Trustee; Resignation and Removal of Trustee

The trustee must be a corporation or association organized and doing business under the laws of a state or the United States of America, authorized under such laws to exercise corporate trust powers. The trustee must have a combined capital and surplus of at least $50,000,000, be subject to supervision or examination by federal or state authority and have a credit rating that would not cause any of the rating agencies to reduce their respective then current ratings of the certificates. In case at any time the trustee ceases to be eligible, the trustee will resign in the manner and with the effect as specified below.

The trustee may at any time resign as trustee by giving written notice of resignation to the depositor, the servicers and each rating agency not less than 60 days before the date specified in such notice, when such resignation is to take effect, and acceptance by a successor trustee meeting the trustee eligibility requirements. If no successor trustee meeting the eligibility requirements has been so appointed and has accepted appointment within 30 days after the giving of such notice or resignation, the resigning trustee may petition any court of competent jurisdiction for the appointment of a successor trustee.

If at any time the trustee ceases to meet the eligibility requirements and fails to resign after written request by the depositor, or if at any time the trustee becomes incapable of acting, or is adjudged as bankrupt or insolvent, or a receiver of the trustee or of its property is appointed, or any public officer takes charge or control of the trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, or a tax is imposed with respect to the trust by any state in which the trustee or the trust is located and the imposition of such tax would be avoided by the appointment of a different trustee, then the depositor or the servicers may remove the trustee and appoint a successor trustee.

The holders of certificates entitled to a majority of the voting rights may at any time remove the trustee and appoint a successor trustee by written instrument or instruments, signed by such holders or their attorneys-in-fact duly authorized.

Any resignation or removal of the trustee and appointment of a successor trustee will become effective upon acceptance of appointment by the successor trustee.

Termination; Optional Clean-up Call

Saxon and Countrywide Servicing, individually, or together, may, at its or their option, purchase all of the mortgage loans and REO properties and terminate the trust on any distribution date when the aggregate Stated Principal Balance of the mortgage loans, as of the last day of the related Due Period, is equal to or less than 5% of the aggregate Stated Principal Balance of the mortgage loans as of the cut-off date. The purchase price for the mortgage loans will be an amount equal to the sum of (i) 100% of the unpaid principal balance of each mortgage loan (other than mortgage loans related to any REO property) plus accrued and unpaid interest on those mortgage loans at the applicable interest rate, (ii) the lesser of (x) the appraised value of any REO property, as determined by the higher of two appraisals completed by two independent appraisers selected by applicable servicer or servicers at its or their expense plus accrued and unpaid interest on the related mortgage loans at the applicable interest rates and (y) the unpaid principal balance of each mortgage loan related to any REO property plus accrued and unpaid interest on those mortgage loans at the applicable interest rate and (iii) any Swap Termination Payment owed to MSCS. That purchase of the mortgage loans and REO properties would result in the payment on that distribution date of the final distribution on the Offered Certificates. Notwithstanding the foregoing, pursuant to the pooling and servicing agreement Saxon and Countrywide Servicing individually, or all of the servicers together, will be permitted to exercise the option to purchase the mortgage loans only if one of the following conditions is met: (i) after distribution of the proceeds of that purchase to the certificateholders (other than the holders of the Class X, Class P, Class R and Class R-X certificates), the distribution of the remaining proceeds to the Class X and Class P certificates will be sufficient to pay the outstanding principal amount of and accrued and unpaid interest on any class of debt securities then outstanding that is rated by one or more rating agencies and backed by the Class X and Class P certificates (“Net Interest Margin Securities”), or (ii) (A) prior to that purchase, Saxon and Countrywide Servicing individually, or all of the servicers together, remits to the trustee an amount that, together with the purchase price specified in the second sentence of this paragraph, will be sufficient to pay the outstanding principal amount of and accrued and unpaid interest on the Net Interest Margin Securities, and (B) the trustee remits that amount directly to the indenture trustee under the indenture creating the Net Interest Margin Securities.

The trust also is required to terminate upon notice to the trustee of either the later of: (i) the distribution to certificateholders of the final payment or collection with respect to the last mortgage loan, or (ii) the disposition of all funds with respect to the last mortgage loan and the remittance of all funds due under the pooling and servicing agreement; provided, however, that in no event will the trust established by the pooling and servicing agreement terminate later than twenty-one years after the death of the last surviving lineal descendant of the person named in the pooling and servicing agreement.

The pooling and servicing agreement requires each servicer to direct the trustee to send a notice of final distribution to each certificateholder in the event that there are no outstanding mortgage loans and no other funds or assets in the trust fund other than the funds in the related collection account. The trustee will be required to promptly send the notice of final distribution by letter to certificateholders mailed within the month of such final distribution. Any such notice of final distribution will be required to specify (a) the distribution date upon which final distribution on the certificates will be made upon presentation and surrender of certificates at the office designated in the notice, (b) the amount of such final distribution, (c) the location of the office or agency at which such presentation and surrender must be made, and (d) that the Record Date otherwise applicable to such distribution date is not applicable, distributions being made only upon presentation and surrender of the certificates at the office specified in the notice.

In the event a notice of final distribution is given, each servicer will be required to remit all funds in the collection accounts to the trustee for deposit in the distribution account on the business day prior to the applicable distribution date in an amount equal to the final distribution in respect of the certificates. Upon final deposit with respect to the trust fund and the receipt by the trustee of a request for release of the mortgage loan files, the trustee will be required to promptly release to the applicable servicer or its designee the mortgage loan files.

Upon presentation and surrender of the certificates, the trustee will be required to cause to be distributed to the certificateholders of each class (after reimbursement of all amounts due to the servicers, the depositor and the trustee pursuant to the pooling and servicing agreement) (i) its Class Certificate Balance plus accrued interest in the case of an interest bearing certificate and all other amounts to which such classes are entitled and (ii) as to the Class R and Class R-X certificateholders, the amount, if any, which remains on deposit in the distribution account (other than the amounts retained to meet claims) after application pursuant to clause (i) above.

In the event that any affected certificateholder does not surrender certificates for cancellation within six months after the date specified in the notice of final distribution, the trustee will be required to give a second written notice to the remaining certificateholders to surrender their certificates for cancellation and receive the final distribution. If within six months after the second notice all the applicable certificates have been surrendered for cancellation, the trustee may take appropriate steps, or may appoint an agent to take appropriate steps, to contact the remaining certificateholders concerning surrender of their certificates, and the related costs will be paid out of the funds and other assets which remain a part of the trust fund. If within one year after the second notice all certificates have not been surrendered for cancellation, the Class R and Class R-X certificateholders will be entitled to all unclaimed funds and other assets of the trust fund.

Certain Matters Regarding the Depositor, the Servicers and the Trustee

The pooling and servicing agreement provides that none of the depositor, the servicers, the trustee or any of their respective directors, officers, employees or agents will be under any liability to the certificateholders for any action taken, or for refraining from the taking of any action, in good faith pursuant to the pooling and servicing agreement, or for errors in judgment. However, none of the depositor, the servicers or the trustee will be protected against liability arising from any breach of representations or warranties made by it or from any liability which may be imposed by reason of the depositor’s, a servicer’s or the trustee’s, as the case may be, willful misfeasance, bad faith or negligence (or gross negligence in the case of the depositor) in the performance of its duties or by reason of its reckless disregard of obligations and duties under the pooling and servicing agreement.

The depositor, the servicers, the trustee and their respective directors, officers, employees or agents will be indemnified by the trust fund and held harmless against any loss, liability or expense incurred in connection with (i) any audit, controversy or judicial proceeding relating to a governmental taxing authority or any legal action relating to the pooling and servicing agreement or (ii) incurred in connection with the performance of their respective duties pursuant to the pooling and servicing agreement, the swap agreement or the certificates, other than any loss, liability or expense incurred by reason of the depositor’s, a servicer’s or the trustee’s, as the case may be, willful misfeasance, bad faith or negligence (or gross negligence in the case of the depositor) in the performance of its duties or by reason its reckless disregard of obligations and duties under the pooling and servicing agreement.

None of the depositor, the servicers or the trustee is obligated under the pooling and servicing agreement to appear in, prosecute or defend any legal action that is not incidental to its respective duties which in its opinion may involve it in any expense or liability, provided that, in accordance with the provisions of the pooling and servicing agreement, the depositor, the servicers and the trustee, as applicable, may undertake any action any of them deem necessary or desirable in respect of (i) the rights and duties of the parties to the pooling and servicing agreement and (ii) with respect to actions taken by the depositor, the interests of the trustee and the certificateholders. In the event the depositor, the servicers or the trustee undertakes any such action, the legal expenses and costs of such action and any resulting liability will be expenses, costs and liabilities of the trust fund, and the depositor, the servicers and the trustee will be entitled to be reimbursed for such expenses, costs and liabilities out of the trust fund.

Amendment

The pooling and servicing agreement may be amended from time to time by the parties to that agreement, without notice to, or consent of, the holders of the Offered Certificates, to cure any ambiguity or mistake, to correct any defective provision or supplement any provision in the pooling and servicing agreement which may be inconsistent with any other provision, to add to the duties of the depositor or the servicers, or to comply with any requirements in the Code. The pooling and servicing agreement may also be amended to add any other provisions with respect to matters or questions arising under the pooling and servicing agreement, or to modify, alter, amend, add to or rescind any of the terms or provisions contained in the pooling and servicing agreement; provided, that such amendment will not adversely affect in any material respect the interest of any holder of the Offered Certificates, as evidenced by (i) an opinion of counsel delivered to, but not obtained at the expense of, the trustee, confirming that the amendment will not adversely affect in any material respect the interests of any holder of the Offered Certificates or (ii) a letter from each rating agency confirming that such amendment will not cause the reduction, qualification or withdrawal of the then current ratings of the certificates.

The pooling and servicing agreement may be amended from time to time by the parties to that agreement, with the consent of holders of certificates evidencing percentage interests aggregating not less than 66-2/3% of each class of certificates affected by the amendment for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the pooling and servicing agreement or of modifying in any manner the rights of the holders of the certificates; provided, however, that no such amendment will (i) reduce in any manner the amount of, or delay the timing of, payments required to be distributed on any certificate without the consent of the holder of that certificate, (ii) adversely affect in any material respect the interests of the holders of any class of certificates in a manner other than as described in clause (i) above without the consent of the holders of certificates of that class evidencing percentage interests aggregating not less than 66-2/3% of that class, or (iii) reduce the percentage of the certificates whose holders are required to consent to any such amendment without the consent of the holders of 100% of the certificates then outstanding.

Notwithstanding the foregoing, any amendment to the pooling and servicing agreement requires the prior written consent of the interest rate swap provider if such amendment will materially and adversely affect the rights or interests of such party.

PREPAYMENT AND YIELD CONSIDERATIONS

Structuring Assumptions

The prepayment model used in this free writing prospectus represents an assumed rate of prepayment each month relative to the then outstanding principal balance of a pool of mortgage loans for the life of those mortgage loans. The prepayment assumption does not purport to be a historical description of prepayment experience or a prediction of the anticipated rate of prepayment of any pool of mortgage loans, including the related mortgage loans. With respect to the fixed rate mortgage loans, the prepayment assumption assumes a constant prepayment rate of approximately 4% per annum of the then outstanding principal balance of the mortgage loans in the first month of the life of the related mortgage loans and an additional approximately 1.2667% per annum (precisely 19%/15 expressed as a percentage) in each month thereafter until the sixteenth month. Beginning in the sixteenth month and in each month thereafter during the life of the related mortgage loans, the prepayment assumption assumes a constant prepayment rate of 23% per annum each month. The prepayment assumption with respect to the adjustable rate mortgage loans assumes a constant prepayment rate of 28% per annum each month.

Since the tables were prepared on the basis of the assumptions in the following paragraph, there are discrepancies between the characteristics of the actual mortgage loans and the characteristics of the mortgage loans assumed in preparing the tables. Any discrepancy may have an effect upon the percentages of the Class Certificate Balances outstanding and weighted average lives of the Offered Certificates set forth in the tables. In addition, since the actual mortgage loans in the trust fund have characteristics which differ from those assumed in preparing the tables set forth below, the distributions of principal on the Offered Certificates may be made earlier or later than as indicated in the tables.

Unless otherwise specified, the information in the tables in this free writing prospectus has been prepared on the basis of the following assumed characteristics of the mortgage loans and the following additional assumptions which collectively are the structuring assumptions:

·   the closing date for the Offered Certificates occurs on January 26, 2007;

·   distributions on the certificates are made on the 25^th day of each month, commencing in February 2007, in accordance with the priorities described in this free writing prospectus;

·   the mortgage loan prepayment rates with respect to the assumed mortgage loans are a multiple of the applicable prepayment assumption as stated in the table under the heading “Prepayment Scenarios” under “—Decrement Tables” below;

·   prepayments include 30 days’ interest on the related mortgage loan;

·   the optional termination is not exercised (except with respect to the weighted average life to call);

·   the Specified Subordinated Amount is initially as specified in this free writing prospectus and thereafter decreases in accordance with the provisions in this free writing prospectus;

·   with respect to each adjustable rate mortgage loan, (a) the interest rate for each mortgage loan is adjusted on its next rate Adjustment Date (and on subsequent Adjustment Dates, if necessary) to a rate equal to the Gross Margin plus the Loan Index (subject to the applicable periodic rate cap and minimum and maximum interest rate), (b) the Loan Index remains constant at 5.3900%, and (c) the scheduled monthly payment on the mortgage loans is adjusted to equal a fully amortizing payment (except, with respect to mortgage loans that are interest-only for a period of time, during that period of time, and balloon mortgage loans);

·   One-Month LIBOR remains constant at 5.3400%;

·   no delinquencies or defaults in the payment by mortgagors of principal of and interest on the mortgage loans are experienced;

·   no Swap Termination Payments are paid or received by the trust;

·   scheduled payments of interest and/or principal on the mortgage loans are received on the first day of each month, commencing in the calendar month following the month in which the closing date occurs, and are computed prior to giving effect to prepayments received on the last day of the prior month;

·   prepayments represent prepayments in full of individual mortgage loans and are received on the last day of each month, commencing in the calendar month in which the closing date occurs;

·   the initial Class Certificate Balance of each class of Offered Certificates is as set forth on the cover page of this free writing prospectus;

·   the mortgage loans accrue interest on the basis of a 360-day year consisting of twelve 30-day months;

·   interest accrues on each class of Offered Certificates at the applicable Pass-Through Rate set forth or described in this free writing prospectus; and

·   the assumed mortgage loans have the approximate initial characteristics described below:

Group	Type	Index Name	Original Interest Only Period (Months)	Cut-off Date Principal Balance ($)	Cut-off Date Gross Mortgage Rate (%)	Expense Fee Rate (%)	Original Amortization Term (Months)	Remaining Amortization Term (Months)	Stated Remaining Term (Months)	Gross Margin (%)	Next Rate Adjustment (Months)	Rate Adjustment Frequency (Months)	Gross Life Floor (%)	Gross Life Cap (%)	Current Periodic Rate Cap (%)	Next Periodic Rate Cap (%)
1	ARM	Six Month LIBOR	0	102,260,411.22	8.225	0.520	480	476	356	6.324	20	6	8.225	15.227	1.997	1.500
1	ARM	Six Month LIBOR	60	41,618,315.94	7.505	0.520	360	356	356	6.089	20	6	7.505	14.505	1.999	1.500
1	ARM	Six Month LIBOR	0	28,899,713.84	8.606	0.520	360	356	356	6.245	20	6	8.606	15.599	1.981	1.500
1	ARM	Six Month LIBOR	0	25,865,650.20	9.220	0.520	480	476	356	6.261	20	6	9.220	16.220	1.989	1.500
1	ARM	Six Month LIBOR	0	21,675,060.19	9.353	0.520	359	356	356	6.298	21	6	9.353	16.333	1.975	1.493
1	ARM	Six Month LIBOR	60	14,654,309.06	8.276	0.520	360	356	356	6.147	20	6	8.276	15.266	1.959	1.495
1	ARM	Six Month LIBOR	0	9,241,924.22	7.953	0.520	479	475	356	6.208	32	6	7.953	14.953	2.000	1.500
1	ARM	Six Month LIBOR	0	6,085,591.18	8.781	0.520	480	476	356	6.458	20	6	8.781	15.781	1.986	1.500
1	ARM	Six Month LIBOR	0	5,552,817.51	9.405	0.520	480	477	357	6.170	21	6	9.405	16.405	2.000	1.500
1	ARM	Six Month LIBOR	0	5,345,627.22	9.172	0.520	480	477	357	6.321	21	6	9.172	16.172	2.000	1.500
1	ARM	Six Month LIBOR	0	5,040,277.78	9.063	0.520	480	476	356	6.116	32	6	9.063	16.063	1.968	1.500
1	ARM	Six Month LIBOR	0	4,780,984.91	9.207	0.520	360	355	355	6.143	31	6	9.207	16.132	1.925	1.462
1	ARM	Six Month LIBOR	60	4,397,828.92	7.877	0.520	360	357	357	6.114	21	6	7.877	14.877	2.000	1.500
1	ARM	Six Month LIBOR	60	4,198,357.95	7.630	0.520	360	356	356	6.143	20	6	7.630	14.630	2.000	1.500
1	ARM	Six Month LIBOR	0	4,046,851.75	9.297	0.520	360	356	356	6.215	20	6	9.297	16.283	1.987	1.500
1	ARM	Six Month LIBOR	0	3,479,239.35	9.087	0.520	479	476	357	6.260	21	6	9.087	16.087	2.000	1.500
1	ARM	Six Month LIBOR	0	3,245,636.71	8.456	0.520	359	355	355	6.226	32	6	8.456	15.456	1.983	1.500
1	ARM	Six Month LIBOR	60	3,090,752.34	7.133	0.520	360	356	356	6.119	32	6	7.133	14.133	2.000	1.500
1	ARM	Six Month LIBOR	0	2,950,413.26	9.488	0.520	360	357	357	6.347	21	6	9.488	16.488	2.000	1.500
1	ARM	Six Month LIBOR	0	2,335,408.28	8.269	0.520	360	356	356	6.074	20	6	8.269	15.269	2.000	1.500
1	ARM	Six Month LIBOR	0	2,168,779.04	8.407	0.520	480	476	356	6.150	32	6	8.407	15.407	2.000	1.500
1	ARM	Six Month LIBOR	0	1,655,947.79	9.028	0.520	480	476	356	6.318	20	6	9.028	16.028	2.000	1.500
1	ARM	Six Month LIBOR	60	1,554,900.00	7.791	0.520	360	357	357	6.073	21	6	7.791	14.791	2.000	1.500
1	ARM	Six Month LIBOR	0	1,465,082.66	8.804	0.520	360	356	356	6.365	20	6	8.804	15.804	2.000	1.500
1	ARM	Six Month LIBOR	60	1,283,139.98	7.758	0.520	360	356	356	5.985	20	6	7.758	14.758	2.000	1.500
1	ARM	Six Month LIBOR	0	1,247,041.54	8.748	0.520	360	356	356	6.310	20	6	8.748	15.748	2.000	1.500
1	ARM	Six Month LIBOR	60	1,170,000.00	8.403	0.520	360	356	356	6.173	32	6	8.403	15.403	2.000	1.500
1	ARM	Six Month LIBOR	0	1,089,442.84	8.907	0.520	480	475	355	6.060	31	6	8.907	15.907	2.000	1.500
1	ARM	Six Month LIBOR	0	978,967.78	8.258	0.520	480	476	356	6.394	20	6	8.258	15.258	2.000	1.500
1	ARM	Six Month LIBOR	0	946,731.14	8.823	0.520	480	476	356	6.273	20	6	8.823	15.823	2.000	1.500
1	ARM	Six Month LIBOR	0	904,882.10	9.948	0.520	360	355	355	6.318	31	6	9.948	16.948	1.955	1.500
1	ARM	Six Month LIBOR	0	858,174.90	9.727	0.520	360	357	357	6.253	21	6	9.727	16.727	2.000	1.500
1	ARM	Six Month LIBOR	60	805,000.00	6.412	0.520	360	355	355	5.919	31	6	6.412	13.412	2.000	1.500
1	ARM	Six Month LIBOR	60	774,559.99	9.360	0.520	360	356	356	6.263	20	6	9.360	16.360	2.000	1.500
1	ARM	Six Month LIBOR	0	711,477.80	8.484	0.520	360	356	356	6.457	32	6	8.484	15.484	2.000	1.500
1	ARM	Six Month LIBOR	60	649,799.98	8.184	0.520	360	356	356	6.060	32	6	8.184	15.184	2.000	1.500
1	ARM	Six Month LIBOR	0	530,315.86	9.560	0.520	360	356	356	6.264	32	6	9.560	16.560	2.000	1.500
1	ARM	Six Month LIBOR	0	470,387.61	7.597	0.520	480	476	356	6.192	20	6	7.597	14.597	2.000	1.500
1	ARM	Six Month LIBOR	60	455,964.60	7.086	0.520	360	357	357	6.002	21	6	7.086	14.086	2.000	1.500
1	ARM	Six Month LIBOR	0	322,706.93	9.980	0.520	480	476	356	6.300	20	6	9.980	16.980	2.000	1.500
1	ARM	Six Month LIBOR	0	316,667.73	9.971	0.520	360	356	356	6.571	32	6	9.971	16.971	2.000	1.500
1	ARM	Six Month LIBOR	60	296,100.00	9.600	0.520	360	357	357	5.950	21	6	9.600	16.600	2.000	1.500
1	ARM	Six Month LIBOR	0	242,816.31	9.450	0.520	480	476	356	5.950	32	6	9.450	16.450	2.000	1.500
1	ARM	Six Month LIBOR	0	242,689.91	10.248	0.520	360	357	357	6.300	21	6	10.248	17.248	2.000	1.500
1	ARM	Six Month LIBOR	0	235,678.93	8.225	0.520	480	475	355	6.150	31	6	8.225	15.225	2.000	1.500
1	ARM	Six Month LIBOR	60	214,107.75	8.450	0.520	360	356	356	6.050	32	6	8.450	15.450	2.000	1.500
1	ARM	Six Month LIBOR	0	194,218.49	6.530	0.520	360	356	356	6.050	32	6	6.530	13.530	2.000	1.500
1	ARM	Six Month LIBOR	0	193,798.58	8.375	0.520	480	476	356	5.950	32	6	8.375	15.375	2.000	1.500
1	ARM	Six Month LIBOR	0	179,759.64	7.500	0.520	480	476	356	6.050	32	6	7.500	14.500	2.000	1.500
1	ARM	Six Month LIBOR	0	152,774.66	7.950	0.520	480	475	355	6.150	31	6	7.950	14.950	2.000	1.500
1	ARM	Six Month LIBOR	60	148,000.00	8.275	0.520	360	356	356	5.950	20	6	8.275	15.275	2.000	1.500
1	ARM	Six Month LIBOR	60	136,800.00	7.900	0.520	360	357	357	5.900	21	6	7.900	14.900	2.000	1.500
1	ARM	Six Month LIBOR	0	109,625.53	10.563	0.520	360	356	356	5.950	20	6	10.563	17.563	2.000	1.500
1	ARM	Six Month LIBOR	0	109,079.60	10.650	0.520	360	356	356	5.950	32	6	10.650	17.650	2.000	1.500
1	ARM	Six Month LIBOR	60	85,166.56	9.275	0.520	360	356	356	6.050	32	6	9.275	16.275	2.000	1.500
1	ARM	Six Month LIBOR	60	72,250.00	9.875	0.520	360	356	356	6.150	32	6	9.875	16.875	2.000	1.500
1	FRM	N/A	0	27,977,907.35	7.783	0.520	360	356	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	15,958,440.11	7.571	0.520	480	476	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	13,572,645.50	8.716	0.520	360	356	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	6,138,874.07	11.569	0.520	359	354	354	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	3,531,520.31	10.909	0.520	359	354	354	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	2,957,522.90	7.853	0.520	480	476	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	2,388,185.20	7.707	0.520	360	356	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	1,913,126.69	9.229	0.520	359	355	355	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	1,768,530.81	10.193	0.520	359	354	354	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	1,443,826.99	8.006	0.520	360	357	357	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	1,248,359.68	8.825	0.520	480	476	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	1,167,582.19	8.566	0.520	360	356	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	938,960.63	7.831	0.520	180	176	176	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	826,585.07	9.519	0.520	180	176	176	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	698,165.74	7.184	0.520	480	476	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	672,491.55	7.327	0.520	240	236	236	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	597,115.33	6.912	0.520	360	356	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	543,704.32	11.296	0.520	358	354	354	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	529,920.48	8.207	0.520	300	296	296	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	512,807.74	7.598	0.520	360	356	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	482,424.13	9.133	0.520	240	236	236	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	478,456.03	7.480	0.520	360	357	357	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	432,326.35	8.154	0.520	480	476	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	373,662.16	8.850	0.520	480	476	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	372,310.58	11.829	0.520	354	348	348	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	286,978.72	7.750	0.520	480	476	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	285,170.29	7.875	0.520	480	475	355	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	262,685.70	12.467	0.520	359	353	353	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	249,778.98	7.925	0.520	480	477	357	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	247,886.45	12.162	0.520	360	353	353	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	244,902.05	10.543	0.520	360	354	354	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	240,213.49	11.674	0.520	360	355	355	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	205,888.69	10.703	0.520	360	356	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	196,007.99	6.550	0.520	480	476	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	190,383.59	12.006	0.520	360	354	354	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	183,337.86	12.717	0.520	359	354	354	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	179,846.71	9.050	0.520	480	476	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	177,066.76	6.700	0.520	240	236	236	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	175,049.71	9.025	0.520	480	476	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	173,684.90	9.950	0.520	360	356	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	173,115.54	8.128	0.520	240	237	237	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	168,500.24	6.850	0.520	240	237	237	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	160,763.74	7.990	0.520	179	175	175	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	113,040.80	12.553	0.520	238	232	232	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	105,031.38	8.300	0.520	360	356	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	97,885.07	9.125	0.520	360	356	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	69,501.20	10.200	0.520	120	115	115	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	56,560.41	7.715	0.520	120	117	117	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	50,894.51	12.426	0.520	360	354	354	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	32,579.92	12.628	0.520	240	233	233	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	18,499.53	10.600	0.520	180	169	169	N/A	N/A	N/A	N/A	N/A	N/A	N/A
1	FRM	N/A	0	15,947.37	11.100	0.520	360	351	351	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	ARM	Six Month LIBOR	0	145,045,305.07	7.970	0.520	480	476	356	6.217	20	6	7.968	14.968	1.993	1.500
2	ARM	Six Month LIBOR	60	90,557,404.06	7.453	0.520	360	356	356	6.094	20	6	7.453	14.453	2.000	1.500
2	ARM	Six Month LIBOR	0	73,816,181.38	8.579	0.520	480	476	356	6.232	20	6	8.579	15.579	1.985	1.500
2	ARM	Six Month LIBOR	0	55,538,855.90	8.354	0.520	360	356	356	6.200	20	6	8.354	15.351	1.996	1.500
2	ARM	Six Month LIBOR	0	51,873,825.17	8.676	0.520	360	356	356	6.174	20	6	8.676	15.637	1.945	1.483
2	ARM	Six Month LIBOR	60	25,617,339.51	8.305	0.520	360	356	356	6.119	20	6	8.305	15.298	1.993	1.496
2	ARM	Six Month LIBOR	0	18,239,960.76	8.597	0.520	480	476	356	6.216	32	6	8.597	15.597	1.987	1.500
2	ARM	Six Month LIBOR	0	16,257,630.77	7.634	0.520	479	476	357	6.194	33	6	7.634	14.634	2.000	1.500
2	ARM	Six Month LIBOR	0	14,598,446.85	8.089	0.520	480	476	356	6.276	20	6	8.089	15.089	1.972	1.500
2	ARM	Six Month LIBOR	0	13,677,974.58	7.800	0.520	479	475	356	6.121	32	6	7.800	14.800	2.000	1.500
2	ARM	Six Month LIBOR	60	13,153,792.47	8.091	0.520	360	357	357	6.136	21	6	8.091	15.091	2.000	1.500
2	ARM	Six Month LIBOR	0	11,345,785.98	8.994	0.520	360	356	356	6.201	32	6	8.994	15.974	1.978	1.486
2	ARM	Six Month LIBOR	0	11,146,207.57	8.377	0.520	480	476	356	6.348	20	6	8.377	15.377	2.000	1.500
2	ARM	Six Month LIBOR	0	11,140,570.00	8.381	0.520	479	476	357	6.221	21	6	8.381	15.381	1.992	1.500
2	ARM	Six Month LIBOR	0	11,128,779.17	8.816	0.520	360	356	356	6.191	20	6	8.816	15.732	1.993	1.495
2	ARM	Six Month LIBOR	0	8,465,448.31	8.391	0.520	479	476	357	6.159	21	6	8.391	15.391	2.000	1.500
2	ARM	Six Month LIBOR	0	7,855,902.97	8.897	0.520	360	356	356	6.160	20	6	8.897	15.872	1.978	1.480
2	ARM	Six Month LIBOR	0	5,701,803.95	8.127	0.520	360	356	356	6.214	20	6	8.127	15.127	1.941	1.500
2	ARM	Six Month LIBOR	0	5,543,064.08	8.358	0.520	360	356	356	6.185	32	6	8.358	15.358	2.000	1.500
2	ARM	Six Month LIBOR	0	4,950,923.56	8.462	0.520	360	356	356	6.398	20	6	8.462	15.371	2.000	1.455
2	ARM	Six Month LIBOR	84	4,754,865.95	7.063	0.520	360	356	356	5.984	56	6	7.063	14.063	1.955	1.500
2	ARM	Six Month LIBOR	0	3,939,022.02	7.328	0.520	479	476	357	6.083	21	6	7.328	14.328	2.000	1.500
2	ARM	Six Month LIBOR	60	3,748,634.10	7.733	0.520	360	356	356	6.048	32	6	7.733	14.733	2.000	1.500
2	ARM	Six Month LIBOR	60	3,421,825.45	7.353	0.520	360	356	356	6.119	20	6	7.353	14.353	2.000	1.500
2	ARM	Six Month LIBOR	0	3,358,416.96	7.624	0.520	479	476	357	6.252	21	6	7.624	14.624	2.000	1.500
2	ARM	Six Month LIBOR	0	2,604,293.90	8.718	0.520	360	355	355	6.153	31	6	8.718	15.718	1.957	1.500
2	ARM	Six Month LIBOR	0	2,405,123.06	7.675	0.520	360	356	356	6.129	32	6	7.675	14.675	2.000	1.500
2	ARM	Six Month LIBOR	0	2,073,183.86	8.430	0.520	480	475	355	6.251	31	6	8.430	15.430	2.000	1.500
2	ARM	Six Month LIBOR	60	2,028,799.88	7.493	0.520	360	356	356	5.941	32	6	7.493	14.493	2.000	1.500
2	ARM	Six Month LIBOR	60	1,949,398.11	8.358	0.520	360	356	356	5.985	32	6	8.358	15.358	2.000	1.500
2	ARM	Six Month LIBOR	0	1,831,300.16	9.020	0.520	360	356	356	6.179	20	6	9.020	16.020	2.000	1.500
2	ARM	Six Month LIBOR	0	1,609,987.68	8.852	0.520	480	476	356	6.132	20	6	8.852	15.852	2.000	1.500
2	ARM	Six Month LIBOR	60	1,577,775.97	7.834	0.520	360	356	356	6.119	20	6	7.834	14.834	2.000	1.500
2	ARM	Six Month LIBOR	0	1,382,550.70	8.184	0.520	478	474	356	6.482	32	6	8.184	15.184	2.000	1.500
2	ARM	Six Month LIBOR	0	1,161,767.60	7.531	0.520	360	356	356	6.000	56	6	7.531	14.531	2.000	1.500
2	ARM	Six Month LIBOR	0	1,068,192.48	8.744	0.520	360	357	357	6.257	21	6	8.744	15.744	2.000	1.500
2	ARM	Six Month LIBOR	0	947,425.59	8.710	0.520	480	475	355	6.242	31	6	8.710	15.710	2.000	1.500
2	ARM	Six Month LIBOR	0	933,758.85	9.374	0.520	360	356	356	6.044	32	6	9.374	16.374	1.973	1.500
2	ARM	Six Month LIBOR	84	886,000.00	7.366	0.520	360	355	355	5.950	55	6	7.366	14.366	2.000	1.500
2	ARM	Six Month LIBOR	60	884,799.93	8.206	0.520	360	356	356	6.188	20	6	8.206	15.206	2.000	1.500
2	ARM	Six Month LIBOR	0	879,101.72	7.896	0.520	480	476	356	6.921	32	6	7.896	14.896	2.000	1.500
2	ARM	Six Month LIBOR	60	734,400.00	7.251	0.520	360	357	357	5.900	21	6	7.251	14.251	2.000	1.500
2	ARM	Six Month LIBOR	0	696,007.34	7.353	0.520	480	476	356	6.050	32	6	7.353	14.353	2.000	1.500
2	ARM	Six Month LIBOR	0	656,712.61	9.527	0.520	360	356	356	6.225	56	6	9.527	16.527	2.000	1.500
2	ARM	Six Month LIBOR	60	630,399.99	7.660	0.520	360	356	356	5.935	32	6	7.660	14.660	2.000	1.500
2	ARM	Six Month LIBOR	0	619,915.10	10.758	0.520	360	356	356	6.665	20	6	10.758	17.758	2.000	1.500
2	ARM	Six Month LIBOR	0	589,713.03	8.341	0.520	360	355	355	6.050	31	6	8.341	15.341	2.000	1.500
2	ARM	Six Month LIBOR	84	514,999.92	7.386	0.520	360	355	355	5.911	55	6	7.386	14.386	2.000	1.500
2	ARM	Six Month LIBOR	0	508,564.31	8.026	0.520	360	357	357	5.950	33	6	8.026	15.026	2.000	1.500
2	ARM	Six Month LIBOR	0	487,899.70	7.938	0.520	359	354	354	6.050	31	6	7.938	14.938	2.000	1.500
2	ARM	Six Month LIBOR	0	454,765.13	8.432	0.520	342	339	339	6.148	57	6	8.432	15.432	2.000	1.500
2	ARM	Six Month LIBOR	0	447,159.74	9.088	0.520	480	476	356	6.417	20	6	9.088	16.088	2.000	1.500
2	ARM	Six Month LIBOR	60	412,115.00	7.635	0.520	360	357	357	5.922	21	6	7.635	14.635	2.000	1.500
2	ARM	Six Month LIBOR	0	388,484.40	6.795	0.520	360	355	355	5.912	31	6	6.795	13.795	2.000	1.500
2	ARM	Six Month LIBOR	0	296,296.93	9.377	0.520	480	476	356	6.450	20	6	9.377	16.377	2.000	1.500
2	ARM	Six Month LIBOR	0	293,231.68	8.377	0.520	360	356	356	6.532	32	6	8.377	15.377	2.000	1.500
2	ARM	Six Month LIBOR	0	270,990.82	7.975	0.520	360	355	355	6.300	31	6	7.975	14.975	2.000	1.500
2	ARM	Six Month LIBOR	0	251,878.86	8.521	0.520	480	477	357	5.950	21	6	8.521	15.521	2.000	1.500
2	ARM	Six Month LIBOR	0	244,714.72	11.990	0.520	360	356	356	7.050	32	6	11.990	18.990	2.000	1.500
2	ARM	Six Month LIBOR	0	229,198.20	6.990	0.520	360	354	354	6.050	54	6	6.990	13.990	2.000	1.500
2	ARM	Six Month LIBOR	0	220,800.59	9.228	0.520	360	357	357	6.109	21	6	9.228	16.228	2.000	1.500
2	ARM	Six Month LIBOR	0	204,865.99	7.600	0.520	480	475	355	5.900	31	6	7.600	14.600	2.000	1.500
2	ARM	Six Month LIBOR	0	181,361.18	9.300	0.520	358	354	354	6.550	56	6	9.300	16.300	2.000	1.500
2	ARM	Six Month LIBOR	0	144,947.00	8.300	0.520	480	471	351	5.950	27	6	8.300	15.300	1.500	1.500
2	ARM	Six Month LIBOR	0	120,352.84	7.950	0.520	360	357	357	6.450	21	6	7.950	14.950	2.000	1.500
2	ARM	Six Month LIBOR	0	119,091.89	9.600	0.520	480	475	355	5.950	31	6	9.600	16.600	2.000	1.500
2	FRM	N/A	0	36,323,154.41	7.824	0.520	360	356	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	22,729,724.63	11.446	0.520	360	355	355	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	22,444,622.72	11.265	0.520	359	355	355	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	21,259,981.29	7.496	0.520	480	476	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	17,089,128.66	8.374	0.520	360	356	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	7,513,198.54	10.890	0.520	360	355	355	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	60	7,284,461.42	7.259	0.520	360	355	355	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	5,971,027.45	7.470	0.520	359	356	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	5,945,849.81	7.878	0.520	480	476	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	5,375,657.87	8.590	0.520	360	356	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	4,990,183.57	8.049	0.520	479	475	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	60	3,830,350.50	7.092	0.520	360	355	355	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	2,499,195.39	7.980	0.520	360	356	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	2,125,530.42	7.966	0.520	359	356	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	1,728,794.82	11.801	0.520	360	356	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	1,617,056.46	8.228	0.520	179	175	175	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	1,464,022.27	7.289	0.520	480	475	355	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	1,349,646.32	11.410	0.520	360	355	355	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	1,189,940.05	8.401	0.520	240	236	236	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	1,125,747.07	8.206	0.520	360	356	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	1,005,108.73	8.375	0.520	480	475	355	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	967,751.09	7.350	0.520	180	177	177	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	963,580.25	8.919	0.520	480	476	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	840,234.82	8.537	0.520	240	236	236	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	60	817,199.94	7.742	0.520	360	355	355	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	785,410.76	7.377	0.520	480	476	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	684,603.04	11.781	0.520	359	355	355	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	60	623,312.95	8.427	0.520	360	355	355	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	590,121.73	9.225	0.520	360	355	355	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	552,824.19	6.998	0.520	359	355	355	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	438,748.72	11.661	0.520	360	355	355	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	435,139.58	8.903	0.520	360	356	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	60	400,339.51	6.975	0.520	360	355	355	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	366,802.39	7.920	0.520	120	117	117	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	345,050.35	8.250	0.520	360	356	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	329,448.69	7.700	0.520	360	356	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	275,325.54	7.375	0.520	480	473	353	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	259,966.93	7.650	0.520	480	476	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	257,194.48	11.921	0.520	360	355	355	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	231,774.83	11.913	0.520	359	354	354	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	227,378.83	7.318	0.520	480	476	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	224,282.21	10.672	0.520	360	356	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	211,621.83	8.537	0.520	240	236	236	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	202,640.97	7.500	0.520	360	356	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	200,596.67	11.568	0.520	360	355	355	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	179,919.33	9.686	0.520	180	176	176	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	178,860.17	10.743	0.520	356	351	351	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	60	177,430.70	6.625	0.520	360	354	354	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	149,772.61	7.050	0.520	480	476	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	136,119.06	10.737	0.520	358	354	354	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	129,928.47	10.500	0.520	480	476	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	107,618.57	10.013	0.520	180	177	177	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	83,830.98	9.450	0.520	360	356	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	66,494.85	8.650	0.520	300	296	296	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	66,182.72	7.200	0.520	178	175	175	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	54,785.24	11.775	0.520	180	173	173	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	53,919.38	8.050	0.520	479	475	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	45,761.18	9.800	0.520	240	236	236	N/A	N/A	N/A	N/A	N/A	N/A	N/A
2	FRM	N/A	0	38,651.09	11.650	0.520	360	356	356	N/A	N/A	N/A	N/A	N/A	N/A	N/A

While it is assumed that each of the mortgage loans prepays at the specified constant percentages of the prepayment assumption, this is not likely to be the case. Moreover, discrepancies exist between the characteristics of the actual mortgage loans that will be delivered to the trustee and characteristics of the mortgage loans assumed in preparing the tables in this free writing prospectus.

Defaults

The yield to maturity of the Offered Certificates, and particularly the Class B and Class M certificates, will be sensitive to defaults on the mortgage loans. If a purchaser of an Offered Certificate calculates its anticipated yield based on an assumed rate of default and amount of losses that is lower than the default rate and amount of losses actually incurred, its actual yield to maturity will be lower than that so calculated. Holders of the Offered Certificates may not receive reimbursement for Applied Realized Loss Amounts in the months following the occurrence of those losses. In general, the earlier a loss occurs, the greater is the effect on an investor’s yield to maturity. There can be no assurance as to the delinquency, foreclosure or loss experience with respect to the mortgage loans. Because the mortgage loans were underwritten in accordance with standards less stringent than those generally acceptable to Fannie Mae and Freddie Mac with regard to a borrower’s credit standing and repayment ability, the risk of delinquencies with respect to, and losses on, the mortgage loans will be greater than that of mortgage loans underwritten in accordance with Fannie Mae and Freddie Mac standards.

Prepayment Considerations and Risks

The rate of principal payments on the Offered Certificates, the aggregate amount of distributions on the Offered Certificates and the yields to maturity of the Offered Certificates will be related to the rate and timing of payments of principal on the mortgage loans in the related loan group. The rate of principal payments on the mortgage loans will in turn be affected by the amortization schedules of the mortgage loans and by the rate of principal prepayments (including for this purpose prepayments resulting from refinancing, liquidations of the mortgage loans due to defaults, casualties or condemnations and repurchases by a selling party or purchases, pursuant to the optional clean-up call, by one or all of the servicers). Because certain of the mortgage loans contain Prepayment Premiums, the rate of principal payments may be less than the rate of principal payments for mortgage loans which did not have Prepayment Premiums. The mortgage loans are subject to the “due-on-sale” provisions included in the mortgage loans. See “The Mortgage Loan Pool” in this free writing prospectus.

Prepayments, liquidations and purchases of the mortgage loans (including any optional repurchase of the remaining mortgage loans in the trust fund in connection with the termination of the trust fund, in each case as described in this free writing prospectus) will result in distributions on the Offered Certificates of principal amounts which would otherwise be distributed over the remaining terms of the mortgage loans. Since the rate of payment of principal on the mortgage loans will depend on future events and a variety of other factors, no assurance can be given as to that rate or the rate of principal prepayments. The extent to which the yield to maturity of a class of Offered Certificates may vary from the anticipated yield will depend upon the degree to which that Offered Certificate is purchased at a discount or premium, and the degree to which the timing of payments on that Offered Certificate is sensitive to prepayments, liquidations and purchases of the mortgage loans. Further, an investor should consider the risk that, in the case of any Offered Certificate purchased at a discount, a slower than anticipated rate of principal payments (including prepayments) on the mortgage loans could result in an actual yield to that investor that is lower than the anticipated yield and, in the case of any Offered Certificate purchased at a premium, a faster than anticipated rate of principal payments on the mortgage loans could result in an actual yield to that investor that is lower than the anticipated yield.

The rate of principal payments (including prepayments) on pools of mortgage loans may vary significantly over time and may be influenced by a variety of economic, geographic, social and other factors, including changes in mortgagors’ housing needs, job transfers, unemployment, mortgagors’ net equity in the mortgaged properties and servicing decisions. In general, if prevailing interest rates were to fall significantly below the interest rates on the fixed rate mortgage loans, the mortgage loans could be subject to higher prepayment rates than if prevailing interest rates were to remain at or above the interest rates on the mortgage loans. Conversely, if prevailing interest rates were to rise significantly, the rate of prepayments on the fixed rate mortgage loans would generally be expected to decrease. No assurances can be given as to the rate of prepayments on the mortgage loans in stable or changing interest rate environments.

As is the case with fixed rate mortgage loans, the adjustable rate mortgage loans, or ARMs, may be subject to a greater rate of principal prepayments in a low interest rate environment. For example, if prevailing interest rates were to fall, mortgagors with ARMs may be inclined to refinance their ARMs with a fixed rate loan to “lock in” a lower interest rate. The existence of the applicable periodic rate cap and Maximum Rate also may affect the likelihood of prepayments resulting from refinancings. In addition, the delinquency and loss experience of the ARMs may differ from that on the fixed rate mortgage loans because the amount of the monthly payments on the ARMs are subject to adjustment on each Adjustment Date. In addition, all of the ARMs (the 2/28 Adjustable Rate Mortgage Loans, the 3/27 Adjustable Rate Mortgage Loans and the 5/25 Adjustable Rate Mortgage Loans) will not have their initial Adjustment Date until two years, three years and five years, respectively, after their origination. The prepayment experience of the 2/28 Adjustable Rate Mortgage Loans, the 3/27 Adjustable Rate Mortgage Loans and the 5/25 Adjustable Rate Mortgage Loans may differ from that of the other ARMs. The 2/28 Adjustable Rate Mortgage Loans, the 3/27 Adjustable Rate Mortgage Loans and the 5/25 Adjustable Rate Mortgage Loans may be subject to greater rates of prepayments as they approach their initial Adjustment Dates even if market interest rates are only slightly higher or lower than the interest rates on the 2/28 Adjustable Rate Mortgage Loans, the 3/27 Adjustable Rate Mortgage Loans and the 5/25 Adjustable Rate Mortgage Loans (as the case may be) as borrowers seek to avoid changes in their monthly payments.

The timing of changes in the rate of prepayments on the mortgage loans may significantly affect an investor’s actual yield to maturity, even if the average rate of principal payments is consistent with an investor’s expectation. In general, the earlier a prepayment of principal on the mortgage loans, the greater the effect on an investor’s yield to maturity. The effect on an investor’s yield as a result of principal payments occurring at a rate higher (or lower) than the rate anticipated by the investor during the period immediately following the issuance of the Offered Certificates may not be offset by a subsequent like decrease (or increase) in the rate of principal payments.

The Pass-Through Rate for each class of Offered Certificates will be adjusted by reference to One-Month LIBOR, subject to the effects of the applicable limitations described in this free writing prospectus.

The Pass-Through Rate for each class of Offered Certificates may be calculated by reference to the net interest rates of the mortgage loans, which are based on the Loan Index. If the mortgage loans bearing higher interest rates, either through higher margins or an increase in the Loan Index (and consequently, higher net interest rates), were to prepay, the weighted average net interest rate would be lower than otherwise would be the case. Changes in One-Month LIBOR may not correlate with changes in the Loan Index. It is possible that a decrease in the Loan Index, which would be expected to result in faster prepayments, could occur simultaneously with an increased level of One-Month LIBOR. If the sum of One-Month LIBOR plus the applicable fixed margin for a class or classes of Offered Certificates were to be higher than the Group I Loan Cap, the Group II Loan Cap and the WAC Cap, as applicable, the Pass Through Rate on the related Offered Certificates would be lower than otherwise would be the case. Although holders of the Offered Certificates are entitled to receive any Basis Risk CarryForward Amount from and to the extent of funds available in the Excess Reserve Fund Account and the Swap Account, there is no assurance that those funds will be available or sufficient for those purposes. The ratings of the Offered Certificates do not address the likelihood of the payment of any Basis Risk CarryForward Amount.

Overcollateralization Provisions

The operation of the overcollateralization provisions of the pooling and servicing agreement will affect the weighted average lives of the Offered Certificates and consequently the yields to maturity of those certificates. If at any time the Subordinated Amount is less than the Specified Subordinated Amount, Total Monthly Excess Spread and certain amounts available in the Swap Account will be applied as distributions of principal of the class or classes of certificates then entitled to distributions of principal, until the Subordinated Amount equals the Specified Subordinated Amount. This would have the effect of reducing the weighted average lives of those certificates. The actual Subordinated Amount may change from distribution date to distribution date producing uneven distributions of Total Monthly Excess Spread. There can be no assurance that the Subordinated Amount will never be less than the Specified Subordinated Amount.

Total Monthly Excess Spread generally is a function of the excess of interest collected or advanced on the mortgage loans over the interest required to pay interest on the Offered Certificates and expenses at the Expense Fee Rate, as well as Net Swap Payments and any Swap Termination Payment (other than a Defaulted Swap Termination Payment) to the Swap Provider. Mortgage loans with higher net interest rates will contribute more interest to the Total Monthly Excess Spread. Mortgage loans with higher net interest rates may prepay faster than mortgage loans with relatively lower net interest rates in response to a given change in market interest rates. Any disproportionate prepayments of mortgage loans with higher net interest rates may adversely affect the amount of Total Monthly Excess Spread available to make accelerated payments of principal of the Offered Certificates.

As a result of the interaction of the foregoing factors, the effect of the overcollateralization provisions on the weighted average lives of the Offered Certificates may vary significantly over time and from class to class.

Subordinated Certificates

Each class of Subordinated Certificates provides credit enhancement for certain other classes of Offered Certificates that have a higher payment priority, and each class of Subordinated Certificates may absorb losses on the mortgage loans. The weighted average lives of, and the yields to maturity on, the Subordinated Certificates, in order of their relative payment priorities (with the Class M-1 certificates having the highest priority, then the Class M-2 certificates, then the Class M-3 certificates, then the Class M-4 certificates, then the Class M-5 certificates, then the Class M-6 certificates, then the Class B-1 certificates, then the Class B-2 certificates, then the Class B-3 certificates and then the Class B-4 certificates) will be progressively more sensitive to the rate and timing of mortgagor defaults and the severity of ensuing losses on the mortgage loans. If the actual rate and severity of losses on the mortgage loans is higher than those assumed by a holder of a related Subordinated Certificate, the actual yield to maturity on such holder’s certificate may be lower than the yield expected by such holder based on that assumption. Realized Losses on the mortgage loans will reduce the Class Certificate Balance of the class of the related Subordinated Certificates then outstanding with the lowest relative payment priority if and to the extent that the aggregate Class Certificate Balances of all classes of certificates, following all distributions on a distribution date exceeds the aggregate Stated Principal Balance of the mortgage loans. As a result of this reduction of the Class Certificate Balance of a class of Subordinated Certificates, less interest will accrue on those classes than would otherwise be the case.

The Principal Distribution Amount to be made to the holders of the Offered Certificates includes the net proceeds in respect of principal received upon the liquidation of a related mortgage loan. If such net proceeds are less than the unpaid principal balance of the liquidated mortgage loan, the aggregate Stated Principal Balance of the mortgage loans will decline more than the aggregate Class Certificate Balances of the Offered Certificates, thus reducing the amount of the overcollateralization. If such difference is not covered by the amount of the overcollateralization or excess interest, after taking into account certain payments received or paid by the trust pursuant to the interest rate swap agreement, the class of Subordinated Certificates then outstanding with the lowest relative payment priority will bear such loss. In addition, the Subordinated Certificates will generally not be entitled to any principal distributions prior to the Stepdown Date or during the continuation of a Trigger Event (unless all of the certificates with a higher relative payment priority have been paid in full). Because a Trigger Event may be based on the delinquency, as opposed to the loss, experience on the mortgage loans, a holder of a Subordinated Certificate may not receive distributions of principal for an extended period of time, even if the rate, timing and severity of Realized Losses on the applicable mortgage loans is consistent with such holder’s expectations. Because of the disproportionate distribution of principal of the senior certificates, depending on the timing of Realized Losses, the Subordinated Certificates may bear a disproportionate percentage of the Realized Losses on the mortgage loans.

For all purposes, the Class B-4 certificates will have the lowest payment priority of any class of Subordinated Certificates.

Effect on Yields Due to Rapid Prepayments

Any net payment payable to the Swap Provider under the terms of the interest rate swap agreement will reduce amounts available for distribution to certificateholders, and may reduce the Pass-Through Rates on the Offered Certificates. If the rate of prepayments on the mortgage loans is faster than anticipated, the scheduled notional amount on which payments due under the interest rate swap agreement are calculated may exceed the aggregate scheduled principal balance of the mortgage loans, thereby increasing the relative proportion of interest collections on the loans that must be applied to make Net Swap Payments to the Swap Provider. The combination of a rapid rate of prepayment and low prevailing interest rates could adversely affect the yields on the Offered Certificates.

Weighted Average Lives of the Offered Certificates

The weighted average life of an Offered Certificate is determined by (a) multiplying the amount of the reduction, if any, of the Class Certificate Balance of the certificate on each distribution date by the number of years from the date of issuance to that distribution date, (b) summing the results and (c) dividing the sum by the aggregate amount of the reductions in Class Certificate Balance of the certificate referred to in clause (a).

For a discussion of the factors which may influence the rate of payments (including prepayments) of the mortgage loans, see “—Prepayment Considerations and Risks” above and “Yield and Prepayment Considerations” in the prospectus.

In general, the weighted average lives of the Offered Certificates will be shortened if the level of prepayments of principal of the mortgage loans increases. However, the weighted average lives of the Offered Certificates will depend upon a variety of other factors, including the timing of changes in the rate of principal payments and the priority sequence of distributions of principal of the classes of certificates. See “Description of the Certificates—Distributions of Interest and Principal” in this free writing prospectus.

The interaction of the foregoing factors may have different effects on various classes of Offered Certificates and the effects on any class may vary at different times during the life of that class. Accordingly, no assurance can be given as to the weighted average life of any class of Offered Certificates. Further, to the extent the prices of the Offered Certificates represent discounts or premiums to their respective original Class Certificate Balances, variability in the weighted average lives of those classes of Offered Certificates will result in variability in the related yields to maturity. For an example of how the weighted average lives of the classes of Offered Certificates may be affected at various constant percentages of the prepayment assumption, see “—Decrement Tables” below.

Decrement Tables

The following tables indicate the percentages of the initial Class Certificate Balances of the classes of Offered Certificates that would be outstanding after each of the distribution dates shown at various constant percentages of the applicable prepayment assumption and the corresponding weighted average lives of those classes. The tables have been prepared on the basis of the structuring assumptions. It is not likely that (i) all of the mortgage loans will have the characteristics assumed, (ii) all of the mortgage loans will prepay at the constant percentages of the applicable prepayment assumption specified in the tables or at any other constant rate or (iii) all of the mortgage loans will prepay at the same rate. Moreover, the diverse remaining terms to maturity and interest rates of the mortgage loans could produce slower or faster principal distributions than indicated in the tables at the specified constant percentages of the applicable prepayment assumption, even if the weighted average remaining term to maturity and weighted average interest rates of the mortgage loans are consistent with the remaining terms to maturity and interest rates of the mortgage loans specified in the structuring assumptions.

Prepayment Scenarios

	SCENARIO I	SCENARIO II	SCENARIO III	SCENARIO IV	SCENARIO V
Fixed rate mortgage loans (% of prepayment assumption)	0%	75%	100%	125%	150%
Adjustable rate mortgage loans (% of prepayment assumption)	0%	75%	100%	125%	150%

Percent of Initial Class Certificate Balance Outstanding⁽¹⁾

DISTRIBUTION DATE	Class A-1 PREPAYMENT SCENARIO															Class A-2a PREPAYMENT SCENARIO
	I			II			III			IV			V			I			II			III			IV			V
Initial Percentage		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%
January 2008		99			75			67			59			50			99			50			34			18			2
January 2009		99			54			41			29			18			98			8			0			0			0
January 2010		98			37			22			10			0			97			0			0			0			0
January 2011		98			29			20			10			0			96			0			0			0			0
January 2012		97			23			15			9			0			95			0			0			0			0
January 2013		96			18			11			6			0			93			0			0			0			0
January 2014		96			14			8			4			0			91			0			0			0			0
January 2015		95			11			6			3			0			89			0			0			0			0
January 2016		93			9			4			2			0			87			0			0			0			0
January 2017		92			7			3			1			0			85			0			0			0			0
January 2018		91			6			2			1			0			82			0			0			0			0
January 2019		89			5			2			0			0			79			0			0			0			0
January 2020		88			4			1			0			0			76			0			0			0			0
January 2021		86			3			1			0			0			72			0			0			0			0
January 2022		84			2			0			0			0			68			0			0			0			0
January 2023		82			2			0			0			0			64			0			0			0			0
January 2024		79			1			0			0			0			59			0			0			0			0
January 2025		77			1			0			0			0			53			0			0			0			0
January 2026		74			1			0			0			0			47			0			0			0			0
January 2027		70			1			0			0			0			41			0			0			0			0
January 2028		67			0			0			0			0			33			0			0			0			0
January 2029		63			0			0			0			0			25			0			0			0			0
January 2030		58			0			0			0			0			15			0			0			0			0
January 2031		53			0			0			0			0			5			0			0			0			0
January 2032		48			0			0			0			0			0			0			0			0			0
January 2033		41			0			0			0			0			0			0			0			0			0
January 2034		36			0			0			0			0			0			0			0			0			0
January 2035		31			0			0			0			0			0			0			0			0			0
January 2036		27			0			0			0			0			0			0			0			0			0
January 2037		0			0			0			0			0			0			0			0			0			0
Weighted Average Life to Maturity (years)(2)		22.65			3.54			2.56			1.85			1.19			17.02			1.08			0.80			0.64			0.52
Weighted Average Life to Call (years)(2)(3)		22.65			3.42			2.46			1.77			1.19			17.02			1.08			0.80			0.64			0.52

⁽¹⁾  Rounded to the nearest whole percentage.

⁽²⁾  The weighted average life of a certificate of any class is determined by (i) multiplying the net reduction, if any, of the Class Certificate Balance by the number of years from the date of issuance of the certificate to the related distribution date, (ii) adding the results, and (iii) dividing them by the aggregate of the net reductions of the Class Certificate Balance described in clause (i).

⁽³⁾  Calculation assumes the exercise of the 5% optional clean-up call on the earliest possible date.

Percent of Initial Class Certificate Balance Outstanding⁽¹⁾

DISTRIBUTION DATE	Class A-2b PREPAYMENT SCENARIO															Class A-2c PREPAYMENT SCENARIO
	I			II			III			IV			V			I			II			III			IV			V
Initial Percentage		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%
January 2008		100			100			100			100			100			100			100			100			100			100
January 2009		100			100			44			0			0			100			100			100			77			26
January 2010		100			19			0			0			0			100			100			43			0			0
January 2011		100			0			0			0			0			100			76			36			0			0
January 2012		100			0			0			0			0			100			48			9			0			0
January 2013		100			0			0			0			0			100			25			0			0			0
January 2014		100			0			0			0			0			100			7			0			0			0
January 2015		100			0			0			0			0			100			0			0			0			0
January 2016		100			0			0			0			0			100			0			0			0			0
January 2017		100			0			0			0			0			100			0			0			0			0
January 2018		100			0			0			0			0			100			0			0			0			0
January 2019		100			0			0			0			0			100			0			0			0			0
January 2020		100			0			0			0			0			100			0			0			0			0
January 2021		100			0			0			0			0			100			0			0			0			0
January 2022		100			0			0			0			0			100			0			0			0			0
January 2023		100			0			0			0			0			100			0			0			0			0
January 2024		100			0			0			0			0			100			0			0			0			0
January 2025		100			0			0			0			0			100			0			0			0			0
January 2026		100			0			0			0			0			100			0			0			0			0
January 2027		100			0			0			0			0			100			0			0			0			0
January 2028		100			0			0			0			0			100			0			0			0			0
January 2029		100			0			0			0			0			100			0			0			0			0
January 2030		100			0			0			0			0			100			0			0			0			0
January 2031		100			0			0			0			0			100			0			0			0			0
January 2032		80			0			0			0			0			100			0			0			0			0
January 2033		38			0			0			0			0			100			0			0			0			0
January 2034		0			0			0			0			0			99			0			0			0			0
January 2035		0			0			0			0			0			78			0			0			0			0
January 2036		0			0			0			0			0			54			0			0			0			0
January 2037		0			0			0			0			0			0			0			0			0			0
Weighted Average Life to Maturity (years)(2)		25.74			2.74			2.00			1.57			1.27			28.87			5.10			3.50			2.31			1.86
Weighted Average Life to Call (years)(2)(3)		25.74			2.74			2.00			1.57			1.27			28.87			5.10			3.50			2.31			1.86

⁽¹⁾Rounded to the nearest whole percentage.

⁽²⁾The weighted average life of a certificate of any class is determined by (i) multiplying the net reduction, if any, of the Class Certificate Balance by the number of years from the date of issuance of the certificate to the related distribution date, (ii) adding the results, and (iii) dividing them by the aggregate of the net reductions of the Class Certificate Balance described in clause (i).

⁽³⁾Calculation assumes the exercise of the 5% optional clean-up call on the earliest possible date.

Percent of Initial Class Certificate Balance Outstanding⁽¹⁾

DISTRIBUTION DATE	Class A-2d PREPAYMENT SCENARIO															Class M-1 PREPAYMENT SCENARIO
	I			II			III			IV			V			I			II			III			IV			V
Initial Percentage		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%
January 2008		100			100			100			100			100			100			100			100			100			100
January 2009		100			100			100			100			100			100			100			100			100			100
January 2010		100			100			100			74			0			100			100			100			100			89
January 2011		100			100			100			74			0			100			81			58			100			89
January 2012		100			100			100			72			0			100			65			42			27			89
January 2013		100			100			84			48			0			100			51			31			18			76
January 2014		100			100			61			32			0			100			41			22			12			46
January 2015		100			88			45			21			0			100			32			16			8			28
January 2016		100			70			33			14			0			100			26			12			5			14
January 2017		100			56			24			10			0			100			20			9			3			4
January 2018		100			44			17			6			0			100			16			6			1			0
January 2019		100			35			13			3			0			100			13			5			0			0
January 2020		100			28			9			0			0			100			10			3			0			0
January 2021		100			22			7			0			0			100			8			1			0			0
January 2022		100			17			4			0			0			100			6			0			0			0
January 2023		100			13			1			0			0			100			5			0			0			0
January 2024		100			11			0			0			0			100			4			0			0			0
January 2025		100			8			0			0			0			100			3			0			0			0
January 2026		100			6			0			0			0			100			1			0			0			0
January 2027		100			4			0			0			0			100			0			0			0			0
January 2028		100			2			0			0			0			100			0			0			0			0
January 2029		100			0			0			0			0			100			0			0			0			0
January 2030		100			0			0			0			0			100			0			0			0			0
January 2031		100			0			0			0			0			100			0			0			0			0
January 2032		100			0			0			0			0			100			0			0			0			0
January 2033		100			0			0			0			0			100			0			0			0			0
January 2034		100			0			0			0			0			97			0			0			0			0
January 2035		100			0			0			0			0			84			0			0			0			0
January 2036		100			0			0			0			0			71			0			0			0			0
January 2037		0			0			0			0			0			0			0			0			0			0
Weighted Average Life to Maturity (years)(2)		29.68			11.60			8.53			6.17			2.62			29.13			7.35			5.66			5.32			6.95
Weighted Average Life to Call (years)(2)(3)		29.66			10.64			7.79			5.59			2.62			29.13			7.04			5.42			5.13			5.65

⁽¹⁾Rounded to the nearest whole percentage.

⁽²⁾The weighted average life of a certificate of any class is determined by (i) multiplying the net reduction, if any, of the Class Certificate Balance by the number of years from the date of issuance of the certificate to the related distribution date, (ii) adding the results, and (iii) dividing them by the aggregate of the net reductions of the Class Certificate Balance described in clause (i).

⁽³⁾Calculation assumes the exercise of the 5% optional clean-up call on the earliest possible date.

Percent of Initial Class Certificate Balance Outstanding⁽¹⁾

DISTRIBUTION DATE	Class M-2 PREPAYMENT SCENARIO															Class M-3 PREPAYMENT SCENARIO
	I			II			III			IV			V			I			II			III			IV			V
Initial Percentage		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%
January 2008		100			100			100			100			100			100			100			100			100			100
January 2009		100			100			100			100			100			100			100			100			100			100
January 2010		100			100			100			100			100			100			100			100			100			100
January 2011		100			81			58			64			100			100			81			58			40			100
January 2012		100			65			42			27			48			100			65			42			27			16
January 2013		100			51			31			18			10			100			51			31			18			10
January 2014		100			41			22			12			6			100			41			22			12			6
January 2015		100			32			16			8			3			100			32			16			8			0
January 2016		100			26			12			5			0			100			26			12			5			0
January 2017		100			20			9			3			0			100			20			9			0			0
January 2018		100			16			6			0			0			100			16			6			0			0
January 2019		100			13			5			0			0			100			13			5			0			0
January 2020		100			10			3			0			0			100			10			0			0			0
January 2021		100			8			0			0			0			100			8			0			0			0
January 2022		100			6			0			0			0			100			6			0			0			0
January 2023		100			5			0			0			0			100			5			0			0			0
January 2024		100			4			0			0			0			100			2			0			0			0
January 2025		100			1			0			0			0			100			0			0			0			0
January 2026		100			0			0			0			0			100			0			0			0			0
January 2027		100			0			0			0			0			100			0			0			0			0
January 2028		100			0			0			0			0			100			0			0			0			0
January 2029		100			0			0			0			0			100			0			0			0			0
January 2030		100			0			0			0			0			100			0			0			0			0
January 2031		100			0			0			0			0			100			0			0			0			0
January 2032		100			0			0			0			0			100			0			0			0			0
January 2033		100			0			0			0			0			100			0			0			0			0
January 2034		97			0			0			0			0			97			0			0			0			0
January 2035		84			0			0			0			0			84			0			0			0			0
January 2036		71			0			0			0			0			71			0			0			0			0
January 2037		0			0			0			0			0			0			0			0			0			0
Weighted Average Life to Maturity (years)(2)		29.13			7.33			5.57			4.92			5.20			29.13			7.30			5.50			4.73			4.62
Weighted Average Life to Call (years)(2)(3)		29.13			7.04			5.35			4.75			5.07			29.13			7.04			5.31			4.58			4.50

⁽¹⁾Rounded to the nearest whole percentage.

⁽²⁾The weighted average life of a certificate of any class is determined by (i) multiplying the net reduction, if any, of the Class Certificate Balance by the number of years from the date of issuance of the certificate to the related distribution date, (ii) adding the results, and (iii) dividing them by the aggregate of the net reductions of the Class Certificate Balance described in clause (i).

⁽³⁾Calculation assumes the exercise of the 5% optional clean-up call on the earliest possible date.

Percent of Initial Class Certificate Balance Outstanding⁽¹⁾

DISTRIBUTION DATE	Class M-4 PREPAYMENT SCENARIO															Class M-5 PREPAYMENT SCENARIO
	I			II			III			IV			V			I			II			III			IV			V
Initial Percentage		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%
January 2008		100			100			100			100			100			100			100			100			100			100
January 2009		100			100			100			100			100			100			100			100			100			100
January 2010		100			100			100			100			100			100			100			100			100			100
January 2011		100			81			58			40			38			100			81			58			40			27
January 2012		100			65			42			27			16			100			65			42			27			16
January 2013		100			51			31			18			10			100			51			31			18			10
January 2014		100			41			22			12			6			100			41			22			12			5
January 2015		100			32			16			8			0			100			32			16			8			0
January 2016		100			26			12			5			0			100			26			12			2			0
January 2017		100			20			9			0			0			100			20			9			0			0
January 2018		100			16			6			0			0			100			16			6			0			0
January 2019		100			13			3			0			0			100			13			0			0			0
January 2020		100			10			0			0			0			100			10			0			0			0
January 2021		100			8			0			0			0			100			8			0			0			0
January 2022		100			6			0			0			0			100			6			0			0			0
January 2023		100			5			0			0			0			100			0			0			0			0
January 2024		100			0			0			0			0			100			0			0			0			0
January 2025		100			0			0			0			0			100			0			0			0			0
January 2026		100			0			0			0			0			100			0			0			0			0
January 2027		100			0			0			0			0			100			0			0			0			0
January 2028		100			0			0			0			0			100			0			0			0			0
January 2029		100			0			0			0			0			100			0			0			0			0
January 2030		100			0			0			0			0			100			0			0			0			0
January 2031		100			0			0			0			0			100			0			0			0			0
January 2032		100			0			0			0			0			100			0			0			0			0
January 2033		100			0			0			0			0			100			0			0			0			0
January 2034		97			0			0			0			0			97			0			0			0			0
January 2035		84			0			0			0			0			84			0			0			0			0
January 2036		71			0			0			0			0			71			0			0			0			0
January 2037		0			0			0			0			0			0			0			0			0			0
Weighted Average Life to Maturity (years)(2)		29.13			7.27			5.47			4.65			4.41			29.13			7.24			5.43			4.56			4.23
Weighted Average Life to Call (years)(2)(3)		29.13			7.04			5.29			4.51			4.30			29.13			7.04			5.28			4.45			4.14

⁽¹⁾Rounded to the nearest whole percentage.

⁽²⁾The weighted average life of a certificate of any class is determined by (i) multiplying the net reduction, if any, of the Class Certificate Balance by the number of years from the date of issuance of the certificate to the related distribution date, (ii) adding the results, and (iii) dividing them by the aggregate of the net reductions of the Class Certificate Balance described in clause (i).

⁽³⁾Calculation assumes the exercise of the 5% optional clean-up call on the earliest possible date.

Percent of Initial Class Certificate Balance Outstanding⁽¹⁾

DISTRIBUTION DATE	Class M-6 PREPAYMENT SCENARIO															Class B-1 PREPAYMENT SCENARIO
	I			II			III			IV			V			I			II			III			IV			V
Initial Percentage		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%
January 2008		100			100			100			100			100			100			100			100			100			100
January 2009		100			100			100			100			100			100			100			100			100			100
January 2010		100			100			100			100			100			100			100			100			100			100
January 2011		100			81			58			40			27			100			81			58			40			27
January 2012		100			65			42			27			16			100			65			42			27			16
January 2013		100			51			31			18			10			100			51			31			18			10
January 2014		100			41			22			12			0			100			41			22			12			0
January 2015		100			32			16			8			0			100			32			16			5			0
January 2016		100			26			12			0			0			100			26			12			0			0
January 2017		100			20			9			0			0			100			20			9			0			0
January 2018		100			16			3			0			0			100			16			0			0			0
January 2019		100			13			0			0			0			100			13			0			0			0
January 2020		100			10			0			0			0			100			10			0			0			0
January 2021		100			8			0			0			0			100			5			0			0			0
January 2022		100			2			0			0			0			100			0			0			0			0
January 2023		100			0			0			0			0			100			0			0			0			0
January 2024		100			0			0			0			0			100			0			0			0			0
January 2025		100			0			0			0			0			100			0			0			0			0
January 2026		100			0			0			0			0			100			0			0			0			0
January 2027		100			0			0			0			0			100			0			0			0			0
January 2028		100			0			0			0			0			100			0			0			0			0
January 2029		100			0			0			0			0			100			0			0			0			0
January 2030		100			0			0			0			0			100			0			0			0			0
January 2031		100			0			0			0			0			100			0			0			0			0
January 2032		100			0			0			0			0			100			0			0			0			0
January 2033		100			0			0			0			0			100			0			0			0			0
January 2034		97			0			0			0			0			97			0			0			0			0
January 2035		84			0			0			0			0			84			0			0			0			0
January 2036		71			0			0			0			0			71			0			0			0			0
January 2037		0			0			0			0			0			0			0			0			0			0
Weighted Average Life to Maturity (years)(2)		29.13			7.19			5.38			4.50			4.10			29.13			7.14			5.33			4.43			4.00
Weighted Average Life to Call (years)(2)(3)		29.13			7.04			5.27			4.40			4.03			29.13			7.04			5.26			4.37			3.96

⁽¹⁾Rounded to the nearest whole percentage.

⁽²⁾The weighted average life of a certificate of any class is determined by (i) multiplying the net reduction, if any, of the Class Certificate Balance by the number of years from the date of issuance of the certificate to the related distribution date, (ii) adding the results, and (iii) dividing them by the aggregate of the net reductions of the Class Certificate Balance described in clause (i).

⁽³⁾Calculation assumes the exercise of the 5% optional clean-up call on the earliest possible date.

Percent of Initial Class Certificate Balance Outstanding⁽¹⁾

DISTRIBUTION DATE	Class B-2 PREPAYMENT SCENARIO															Class B-3 PREPAYMENT SCENARIO
	I			II			III			IV			V			I			II			III			IV			V
Initial Percentage		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%
January 2008		100			100			100			100			100			100			100			100			100			100
January 2009		100			100			100			100			100			100			100			100			100			100
January 2010		100			100			100			100			100			100			100			100			100			100
January 2011		100			81			58			40			27			100			81			58			40			27
January 2012		100			65			42			27			16			100			65			42			27			16
January 2013		100			51			31			18			7			100			51			31			18			0
January 2014		100			41			22			12			0			100			41			22			7			0
January 2015		100			32			16			0			0			100			32			16			0			0
January 2016		100			26			12			0			0			100			26			7			0			0
January 2017		100			20			0			0			0			100			20			0			0			0
January 2018		100			16			0			0			0			100			16			0			0			0
January 2019		100			13			0			0			0			100			11			0			0			0
January 2020		100			10			0			0			0			100			0			0			0			0
January 2021		100			0			0			0			0			100			0			0			0			0
January 2022		100			0			0			0			0			100			0			0			0			0
January 2023		100			0			0			0			0			100			0			0			0			0
January 2024		100			0			0			0			0			100			0			0			0			0
January 2025		100			0			0			0			0			100			0			0			0			0
January 2026		100			0			0			0			0			100			0			0			0			0
January 2027		100			0			0			0			0			100			0			0			0			0
January 2028		100			0			0			0			0			100			0			0			0			0
January 2029		100			0			0			0			0			100			0			0			0			0
January 2030		100			0			0			0			0			100			0			0			0			0
January 2031		100			0			0			0			0			100			0			0			0			0
January 2032		100			0			0			0			0			100			0			0			0			0
January 2033		100			0			0			0			0			100			0			0			0			0
January 2034		97			0			0			0			0			97			0			0			0			0
January 2035		84			0			0			0			0			84			0			0			0			0
January 2036		71			0			0			0			0			71			0			0			0			0
January 2037		0			0			0			0			0			0			0			0			0			0
Weighted Average Life to Maturity (years)(2)		29.13			7.07			5.28			4.37			3.91			29.13			6.97			5.20			4.29			3.83
Weighted Average Life to Call (years)(2)(3)		29.13			7.04			5.26			4.35			3.90			29.13			6.97			5.20			4.29			3.83

⁽¹⁾Rounded to the nearest whole percentage.

⁽²⁾The weighted average life of a certificate of any class is determined by (i) multiplying the net reduction, if any, of the Class Certificate Balance by the number of years from the date of issuance of the certificate to the related distribution date, (ii) adding the results, and (iii) dividing them by the aggregate of the net reductions of the Class Certificate Balance described in clause (i).

⁽³⁾Calculation assumes the exercise of the 5% optional clean-up call on the earliest possible date.

Percent of Initial Class Certificate Balance Outstanding⁽¹⁾

DISTRIBUTION DATE	Class B-4 PREPAYMENT SCENARIO
	I			II			III			IV			V
Initial Percentage		100	%		100	%		100	%		100	%		100	%
January 2008		100			100			100			100			100
January 2009		100			100			100			100			100
January 2010		100			100			100			100			100
January 2011		100			81			58			40			27
January 2012		100			65			42			27			11
January 2013		100			51			31			18			0
January 2014		100			41			22			0			0
January 2015		100			32			13			0			0
January 2016		100			26			0			0			0
January 2017		100			20			0			0			0
January 2018		100			11			0			0			0
January 2019		100			0			0			0			0
January 2020		100			0			0			0			0
January 2021		100			0			0			0			0
January 2022		100			0			0			0			0
January 2023		100			0			0			0			0
January 2024		100			0			0			0			0
January 2025		100			0			0			0			0
January 2026		100			0			0			0			0
January 2027		100			0			0			0			0
January 2028		100			0			0			0			0
January 2029		100			0			0			0			0
January 2030		100			0			0			0			0
January 2031		100			0			0			0			0
January 2032		100			0			0			0			0
January 2033		100			0			0			0			0
January 2034		97			0			0			0			0
January 2035		84			0			0			0			0
January 2036		71			0			0			0			0
January 2037		0			0			0			0			0
Weighted Average Life to Maturity (years)(2)		29.13			6.81			5.07			4.18			3.72
Weighted Average Life to Call (years)(2)(3)		29.13			6.81			5.07			4.18			3.72

⁽¹⁾Rounded to the nearest whole percentage.

⁽²⁾The weighted average life of a certificate of any class is determined by (i) multiplying the net reduction, if any, of the Class Certificate Balance by the number of years from the date of issuance of the certificate to the related distribution date, (ii) adding the results, and (iii) dividing them by the aggregate of the net reductions of the Class Certificate Balance described in clause (i).

⁽³⁾Calculation assumes the exercise of the 5% optional clean-up call on the earliest possible date.

Hypothetical Available Funds and Supplemental Interest Rate Cap Table

Assuming that prepayments on the mortgage loans occur at 100% of the applicable fixed rate or adjustable rate prepayment assumption (i.e., Scenario III), that no losses are experienced with respect to the mortgage loans and that One-Month LIBOR and the Loan Index each remain constant at 20% and that the 5% optional clean-up call is not exercised, the following table indicates the Available Funds and Supplemental Interest Rate Cap that would result for indicated distribution dates under an assumed hypothetical scenario. It is highly unlikely, however, that prepayments on the mortgage loans will occur at a constant rate of 100% of the applicable prepayment assumption or at any other constant percentage. There is no assurance, therefore, of whether or to what extent the actual interest rates on the mortgage loans on any distribution date will conform to the corresponding rate set forth for that distribution date in the following table.

Schedule of Available Funds and

Supplemental Interest Rate Cap Rates (Cash Cap)⁽¹⁾⁽²⁾

Distribution Date

Class A-1 Cap (%) Actual/360

Class A-2a Cap (%) Actual/360

Class A-2b Cap (%) Actual/360

Class A-2c Cap (%) Actual/360

Class A-2d Cap (%) Actual/360

Class M-1 Cap (%) Actual/360

Class M-2 Cap (%) Actual/360

Class M-3 Cap (%) Actual/360

Class M-4 Cap (%) Actual/360

Class M-5 Cap (%) Actual/360

Class M-6 Cap (%) Actual/360

Class B-1 Cap (%) Actual/360

Class B-2 Cap (%) Actual/360

Class B-3 Cap (%) Actual/360

Class B-4 Cap (%) Actual/360

Closing Date

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

2/25/2007

3/25/2007

4/25/2007

5/25/2007

6/25/2007

7/25/2007

8/25/2007

9/25/2007

10/25/2007

11/25/2007

12/25/2007

1/25/2008

2/25/2008

3/25/2008

4/25/2008

5/25/2008

6/25/2008

7/25/2008

8/25/2008

9/25/2008

10/25/2008

11/25/2008

12/25/2008

1/25/2009

2/25/2009

3/25/2009

4/25/2009

5/25/2009

6/25/2009

7/25/2009

8/25/2009

9/25/2009

10/25/2009

11/25/2009

12/25/2009

1/25/2010

2/25/2010

3/25/2010

4/25/2010

5/25/2010

6/25/2010

7/25/2010

8/25/2010

9/25/2010

10/25/2010

11/25/2010

12/25/2010

1/25/2011

2/25/2011

3/25/2011

4/25/2011

5/25/2011

6/25/2011

7/25/2011

8/25/2011

9/25/2011

10/25/2011

11/25/2011

12/25/2011

1/25/2012

2/25/2012

3/25/2012

4/25/2012

5/25/2012

6/25/2012

7/25/2012

8/25/2012

9/25/2012

10/25/2012

11/25/2012

12/25/2012

1/25/2013

2/25/2013

3/25/2013

4/25/2013

5/25/2013

6/25/2013

7/25/2013

8/25/2013

9/25/2013

10/25/2013

11/25/2013

12/25/2013

1/25/2014

2/25/2014

3/25/2014

4/25/2014

5/25/2014

6/25/2014

7/25/2014

8/25/2014

9/25/2014

10/25/2014

11/25/2014

12/25/2014

1/25/2015

2/25/2015

3/25/2015

4/25/2015

5/25/2015

6/25/2015

7/25/2015

8/25/2015

9/25/2015

10/25/2015

11/25/2015

12/25/2015

1/25/2016

2/25/2016

3/25/2016

4/25/2016

5/25/2016

6/25/2016

7/25/2016

8/25/2016

9/25/2016

10/25/2016

11/25/2016

12/25/2016

1/25/2017

2/25/2017

3/25/2017

4/25/2017

5/25/2017

6/25/2017

7/25/2017

8/25/2017

9/25/2017

10/25/2017

11/25/2017

12/25/2017

1/25/2018

2/25/2018

3/25/2018

4/25/2018

5/25/2018

6/25/2018

7/25/2018

8/25/2018

9/25/2018

10/25/2018

11/25/2018

12/25/2018

1/25/2019

2/25/2019

3/25/2019

4/25/2019

5/25/2019

6/25/2019

7/25/2019

8/25/2019

9/25/2019

10/25/2019

11/25/2019

12/25/2019

1/25/2020

2/25/2020

3/25/2020

4/25/2020

5/25/2020

6/25/2020

7/25/2020

8/25/2020

9/25/2020

10/25/2020

11/25/2020

12/25/2020

1/25/2021

2/25/2021

3/25/2021

4/25/2021

5/25/2021

6/25/2021

7/25/2021

8/25/2021

9/25/2021

10/25/2021

11/25/2021

12/25/2021

1/25/2022

2/25/2022

3/25/2022

4/25/2022

5/25/2022

6/25/2022

7/25/2022

8/25/2022

9/25/2022

10/25/2022

11/25/2022

12/25/2022

1/25/2023

2/25/2023

3/25/2023

4/25/2023

5/25/2023

6/25/2023

7/25/2023

8/25/2023

9/25/2023

10/25/2023

11/25/2023

12/25/2023

1/25/2024

(1)  Annualized interest rate based on total interest paid to the applicable class of certificates including Accrued Certificate Interest, Unpaid Interest Amounts and Basis Risk CarryForward Amounts divided by the current Class Certificate Balance.

(2)  Assumes 100% of prepayment assumption, no losses, One-Month LIBOR of 20% and the Loan Index of 20% and that the optional clean-up call is not exercised.

Final Scheduled Distribution Date

The “Final Scheduled Distribution Date” for each class of Offered Certificates is the distribution date occurring in November 2036.

The Final Scheduled Distribution Dates for all classes have been calculated as the distribution date in the month following the month in which the latest maturity date of any mortgage loan occurs.

Since the rate of distributions in reduction of the Class Certificate Balance of each class of Offered Certificates will depend on the rate of payment (including prepayments) of the mortgage loans, the Class Certificate Balance of each class could be reduced to zero significantly earlier or later than the Final Scheduled Distribution Date. The rate of payments on the mortgage loans will depend on their particular characteristics, as well as on prevailing interest rates from time to time and other economic factors, and no assurance can be given as to the actual payment experience of the mortgage loans. See “—Prepayment Considerations and Risks” and “—Weighted Average Lives of the Offered Certificates” above in this free writing prospectus and “Yield and Prepayment Considerations” in the prospectus.

FEDERAL INCOME TAX CONSIDERATIONS

The discussion in this section and in the section “Material Federal Income Tax Consequences” in the prospectus is based upon laws, regulations, rulings and decisions now in effect, all of which are subject to change. The discussion below and in the prospectus does not purport to deal with all federal tax consequences applicable to all categories of investors, some of which may be subject to special rules. Investors may wish to consult their own tax advisors in determining the federal, state, local and any other tax consequences to them of the purchase, ownership and disposition of the Offered Certificates. References in this section and in the “ERISA Considerations”section of this free writing prospectus to the “Code”and “Sections”are to the Internal Revenue Code of 1986, as amended.

General

The pooling and servicing agreement provides that the trust (exclusive of the assets held in the Excess Reserve Fund Account, the Swap Account and certain other accounts specified in the pooling and servicing agreement) will comprise multiple REMICs organized in a tiered REMIC structure (each a “Trust REMIC”). Each class of Offered Certificates (exclusive of the right to receive Basis Risk CarryForward Amounts and the obligation to make payments to the Swap Account), the Class X and Class P certificates represents ownership of a regular interest in a Trust REMIC. The Class R and Class R-X certificates will represent ownership of the sole class of residual interests in each of the Trust REMICs. In addition, each class of Offered Certificates will represent a beneficial interest in the right to receive payments of Basis Risk CarryForward Amounts from the Excess Reserve Fund Account and the Swap Account and the obligation to make payments to the Swap Account. Elections will be made to treat each of the Trust REMICs as a REMIC for federal income tax purposes.

Upon the issuance of the Offered Certificates, Thacher Proffitt & Wood LLP will deliver its opinion to the effect that, assuming compliance with the pooling and servicing agreement, for federal income tax purposes, each Trust REMIC will qualify as a REMIC within the meaning of Section 860D of the Code.

Taxation of Regular Interests

A holder of a class of Offered Certificates will be treated for federal income tax purposes as owning an interest in the corresponding class of regular interests (each, a “Regular Interest”) in a Trust REMIC. In addition, the pooling and servicing agreement provides that each holder of an Offered Certificate will be treated as owning an interest in a limited recourse interest rate cap contract (each, a “Basis Risk Contract”), representing the right to receive Basis Risk CarryForward Amounts from the Excess Reserve Fund Account and the Swap Account and the obligation to make payments to the Swap Account. The Regular Interest component of an Offered Certificate generally will be entitled to receive interest and principal payments at the times and in the amounts equal to those made on the Offered Certificate to which it corresponds, except that (i) the maximum interest rate of that Regular Interest component will equal the lesser of the Group I Loan Cap or Group II Loan Cap, as applicable, or the WAC Cap, in each case computed for this purpose without regard to any Swap Termination Payment, (ii) Basis Risk CarryForward Amounts will be deemed to include the excess, if any, of the Group I Loan Cap or Group II Loan Cap, as applicable, or the WAC Cap over the maximum interest rate specified in clause (i), (iii)Basis Risk CarryForward Amounts will be payable from both the Excess Reserve Fund Account and the Swap Account, and (iv) any Swap Termination Payment (other than a Defaulted Swap Termination Payment) will be treated as being payable first from Net Monthly Excess Cash Flow and second from amounts distributed on the Regular Interests. As a result of the foregoing, the amount of distributions on the Regular Interest component of an Offered Certificate may be less than or may exceed the actual amount of distributions on the Offered Certificate.

A holder of an Offered Certificate must allocate its purchase price for the Offered Certificate between its components - the Regular Interest component and the Basis Risk Contract component. To the extent the Basis Risk Contract component has significant value, the Regular Interest component will be viewed as having been issued with a lesser premium or an additional amount of original issue discount (“OID”) (which could cause the total amount of OID to exceed a statutorily defined de minimis amount). See “MaterialFederal Income Tax Consequences—Taxation of Debt Securities—Interest and Acquisition Discount” in the prospectus.

Upon the sale, exchange, or other disposition of an Offered Certificate, the holder must allocate the amount realized between the components of the Offered Certificate based on the relative fair market values of those components at the time of sale. Assuming that an Offered Certificate is held as a “capital asset” within the meaning of Section 1221 of the Code, gain or loss on the disposition of an interest in the Basis Risk Contract component should be capital gain or loss and gain or loss on the Regular Interest component will be treated as described in the prospectus under “Material Federal Income Tax Consequences—Sale or Exchange.”

Interest on the Regular Interest component of an Offered Certificate must be included in income by a holder under the accrual method of accounting, regardless of the holder’s regular method of accounting. In addition, the Regular Interest components of the Offered Certificates could be considered to have been issued with OID. See “Material Federal Income Tax Consequences—Taxation of Debt Securities—Interest and Acquisition Discount” in the prospectus. The prepayment assumption that will be used in determining the accrual of any OID, market discount, or bond premium, if any, will be a rate equal to 100% of the applicable prepayment assumption. No representation is made that the mortgage loans will prepay at such a rate or at any other rate. OID must be included in income as it accrues on a constant yield method, regardless of whether the holder receives currently the cash attributable to such OID.

Status of the Offered Certificates

The Regular Interest components of the Offered Certificates will be treated as assets described in Section 7701(a)(19)(C) of the Code for a “domestic building and loan association,” and as “real estate assets” under Section 856(c)(5)(B) of the Code for a “real estate investment trust” (“REIT”), generally, in the same proportion that the assets of the trust, exclusive of the Excess Reserve Fund Account and the Swap Account, would be so treated. In addition, to the extent the Regular Interest component of an Offered Certificate represents real estate assets under Section 856(c)(5)(B) of the Code, the interest derived from that component would be interest on obligations secured by interests in real property for purposes of Section 856(c)(3)(B) of the Code for a REIT. The Basis Risk Contract components of the Offered Certificates will not, however, qualify as assets described in Section 7701(a)(19)(C) of the Code or as real estate assets under Section 856(c)(5)(B) of the Code.

The Basis Risk Contract Component

Each holder of an Offered Certificate will be treated for federal income tax purposes as having entered into a notional principal contract pursuant to its rights to receive payment with respect to the Basis Risk Contract component on the date it purchases its certificate. The Basis Risk Contract components are beneficially owned by the holders of the Offered Certificates in the portion of the trust fund, exclusive of the REMICs. The Internal Revenue Service (the “IRS”) has issued final regulations under Section 446 of the Code relating to notional principal contracts (the “Notional Principal Contract Regulations”).

As indicated above, holders of the Offered Certificates must allocate the price they pay for such certificates between the Regular Interest component and the Basis Risk Contract component based on their relative fair market values. To the extent the Basis Risk Contract component is determined to have a value on the closing date that is greater than zero, a portion of such purchase price will be allocable to such rights, and such portion will be treated as a cap premium (the “Cap Premium”) paid by holders of the Offered Certificates. A holder of an Offered Certificate will be required to amortize the Cap Premium under a level payment method as if the Cap Premium represented the present value of a series of equal payments made over the life of the Basis Risk Contract (adjusted to take into account decreases in notional principal amount), discounted at a rate equal to the rate used to determine the amount of the Cap Premium (or some other reasonable rate). Holders are urged to consult their tax advisors concerning the appropriate method of amortizing any Cap Premium. The Notional Principal Contract Regulations treat a nonperiodic payment made under a cap contract as a loan for federal income tax purposes if the payment is “significant.” It is not known whether any Cap Premium would be treated in part as a loan under the Notional Principal Contract Regulations.

Under the Notional Principal Contract Regulations (i) all taxpayers must recognize periodic payments with respect to a notional principal contract under the accrual method of accounting, and (ii) any periodic payments received under the applicable Basis Risk Contract must be netted against payments, if any, deemed made as a result of the Cap Premiums over the recipient’s taxable year, rather than accounted for on a gross basis. Net income or deduction with respect to net payments under a Basis Risk Contract for a taxable year should constitute ordinary income or ordinary deduction. The IRS could contend the amount is capital gain or loss, but such treatment is unlikely, at least in the absence of further regulations. Any regulations requiring capital gain or loss treatment presumably would apply only prospectively.

In addition, any amounts payable on a Regular Interest component in excess of the amount of payments on the Offered Certificates to which it relates as a result of certain Swap Termination Payments will be treated as having been received by the beneficial owners of such Offered Certificates and then paid by such owners to the Swap Account pursuant to the Basis Risk Contract, and such excess may be treated as a payment on a notional principal contract that is made by the beneficial owner during the applicable taxable year and that is taken into account in determining the beneficial owner’s net income or net deduction with respect to the Basis Risk Contract for such taxable year. Although not clear, net income or a net deduction with respect to the Basis Risk Contract should be treated as ordinary income or as an ordinary deduction. Alternatively, such payments by beneficial owners of the Offered Certificates may be treated as a guarantee of the obligation of the holder of the Class X certificates to make payments under the interest rate swap agreement.

Any amount of proceeds from the sale, redemption or retirement of an Offered Certificate that is considered to be allocated to the holder’s rights under the applicable Basis Risk Contract would be considered a “termination payment” under the Notional Principal Contract Regulations allocable to that Offered Certificate. A holder of such Offered Certificate will have gain or loss from such a termination of a Basis Risk Contract equal to (i) any termination payment it received or is deemed to have received minus (ii) the unamortized portion of any Cap Premium paid (or deemed paid) by the beneficial owner upon entering into or acquiring its interest in a Basis Risk Contract.

Gain or loss realized upon the termination of a Basis Risk Contract will generally be treated as capital gain or loss. Moreover, in the case of a bank or thrift institution, Section 582(c) of the Code would likely not apply to treat such gain or loss as ordinary.

A beneficial owner’s ability to recognize a net deduction with respect to the Basis Risk Contract component of an Offered Certificate or any such guarantee payment may be limited under Sections 67 and/or 68 of the Code in the case of (1) estates and trusts and (2) individuals owning an interest in such component directly or through a “pass-through entity” (other than in connection with such individual’s trade or business). Pass-through entities include partnerships, S corporations, grantor trusts and non-publicly offered regulated investment companies, but do not include estates, nongrantor trusts, cooperatives, real estate investment trusts and publicly offered regulated investment companies. Further, such a beneficial owner will not be able to recognize a net deduction with respect to the Basis Risk Contract component or any such guarantee payment in computing the beneficial owner’s alternative minimum tax liability. Because a beneficial owner of an Offered Certificate will be required to include in income the amount deemed to have been paid by such owner pursuant to the Basis Risk Contract or such guarantee but may not be able to deduct that amount from income, a beneficial owner of an Offered Certificate may have income that exceeds cash distributions on the Offered Certificate, in any period and over the term of the Offered Certificate. As a result, the Offered Certificates may not be a suitable investment for any taxpayer whose net deduction with respect to the Basis Risk Contract or guarantee would be subject to the limitations described above. Subject to the foregoing, if for any year the amount of that year’s amortized cost exceeds the sum of the periodic payments, such excess is allowable as an ordinary deduction.

No Withholding on Payments Payable to Trust by Swap Provider or Cap Provider

The pooling and servicing agreement will restrict any transfer of any Class X certificate unless the proposed transferee of such Class X certificate (1) provides to the trustee the appropriate tax certification forms that would eliminate any withholding or deduction for taxes from amounts payable by the Cap Provider and the Swap Provider pursuant to the interest rate cap agreement and the interest rate swap agreement, to the trustee and the supplemental interest trustee (i.e., IRS Form W-9 or IRS Form W-8BEN, W-8IMY, W-8EXP or W-8ECI, as applicable (or any successor form thereto), together with any applicable attachments) and (2) agrees to update such forms (i) upon expiration of any such form, (ii) as required under then applicable U.S. Treasury regulations and (iii) promptly upon learning that such form has become obsolete or incorrect, each as a condition to such transfer. Under the pooling and servicing agreement, upon receipt of any such tax certification form from a proposed transferee of any Class X certificate, the trustee will forward the tax certification form that is attributable to the interest rate cap agreement to the Cap Provider and the tax certification form that is attributable to the interest rate swap agreement to the supplemental interest trust trustee. The supplemental interest trust trustee will then forward such tax certification form provided to it to the Swap Provider. Each holder of a Class X certificate and each transferee thereof will be deemed to have consented to the forwarding of any such tax certification form it has provided and updated in accordance with these transfer restrictions. In addition, if any transfer of Class X certificates would cause the Excess Reserve Fund Account or the supplemental interest trust to be beneficially owned by two or more persons for federal income tax purposes, the pooling and servicing agreement will contain additional provisions to ensure that the Cap Provider and the Swap Provider receive the appropriate tax certification forms that would eliminate any withholding or deduction for taxes from amounts payable by the Cap Provider and the Swap Provider pursuant to the interest rate cap agreement and the interest rate swap agreement, to the trustee and the supplemental interest trustee (i.e., IRS Form W-9 or IRS Form W-8BEN, W-8IMY, W-8EXP or W-8ECI, as applicable (or any successor form thereto), together with any applicable attachments) and any updates thereto from the proposed multiple holders of the Class X certificates, the Excess Reserve Fund Account and/or the supplemental interest trust, as applicable. Any purported sales or transfers of any Class X certificate to a transferee which does not comply with the requirements of this paragraph will be deemed null and void under the pooling and servicing agreement. So long as each holder of Class X certificates complies with these restrictions and the Swap Provider and the Cap Provider receive the appropriate tax certification forms as described above, under current federal income tax law, there will be no withholding or deduction for taxes from any amounts payable by the Swap Provider or the Cap Provider pursuant to the interest rate cap agreement or the interest rate swap agreement to the trustee or the supplemental interest trustee.

In addition, pursuant to the pooling and servicing agreement, the trustee shall deliver or cause to be delivered the federal taxpayer identification number of the trust on an IRS Form W-9 of the trust to the Swap Provider and, if requested by the Swap Provider, an applicable IRS Form W-8IMY. Pursuant to the interest rate swap agreement, the Swap Provider will provide an IRS Form W-9 to the trust at the time the interest rate swap agreement is entered into and thereafter prior to the expiration or obsolescence of such form. Under current law, no U.S. federal withholding or backup withholding taxes will be required to be deducted or withheld from payments by the trust to the Swap Provider.

STATE AND LOCAL TAXES

The depositor makes no representations regarding the tax consequences of purchase, ownership or disposition of the Offered Certificates under the tax laws of any state or local jurisdiction. Investors considering an investment in the Offered Certificates may wish to consult their own tax advisors regarding these tax consequences.

ERISA CONSIDERATIONS

The Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and Section 4975 of the Code, impose requirements on employee benefit plans subject to Title I of ERISA, and on certain other retirement plans and arrangements, including individual retirement accounts and annuities and Keogh plans, as well as on collective investment funds, separate accounts and other entities in which such plans, accounts or arrangements are invested (collectively, the “Plans”) and on persons who bear certain relationships to such Plans. See“ERISA Considerations” in the prospectus.

The U.S. Department of Labor (the “DOL”) has granted to Morgan Stanley & Co. Incorporated, an underwriter, an administrative exemption (Prohibited Transaction Exemption (“PTE”) 90-24, Exemption Application No. D-8019, 55 Fed. Reg. 20548 (1990)) (the “Exemption”) from certain of the prohibited transaction rules of ERISA with respect to the initial purchase, the holding and the subsequent resale by Plans of certificates representing interests in asset-backed pass-through trusts that consist of certain receivables, loans and other obligations that meet the conditions and requirements of the Exemption. The receivables covered by the Exemption include secured residential, commercial, and home equity loans such as the mortgage loans in the trust fund. The Exemption was amended by PTE 2000-58, Exemption Application No. D-10829, 65 Fed. Reg. 67765 (2000) and PTE 2002-41, Exemption Application No. D-11077, 67 Fed. Reg. 54487 (2002) to extend exemptive relief to certificates, including Subordinated Certificates, rated in the four highest generic rating categories in certain designated transactions, provided the conditions of the Exemption are met. The Exemption will apply to the acquisition, holding and resale of the offered certificates (the “ERISA Eligible Certificates”) by a Plan, provided that specific conditions (certain of which are described below) are met.

Among the conditions which must be satisfied for the Exemption, as amended, to apply to the ERISA Eligible Certificates are the following:

(i)The acquisition of the ERISA Eligible Certificates by a Plan is on terms (including the price for the ERISA Eligible Certificates) that are at least as favorable to the Plan as they would be in an arm’s-length transaction with an unrelated party;

(ii)The ERISA Eligible Certificates acquired by the Plan have received a rating at the time of such acquisition that is one of the four highest generic rating categories from Moody’s or S&P;

(iii)The trustee is not an affiliate of any other member of the Restricted Group (as defined below), other than an underwriter;

(iv)The sum of all payments made to and retained by the underwriters in connection with the distribution of the ERISA Eligible Certificates represents not more than reasonable compensation for underwriting the ERISA Eligible Certificates. The sum of all payments made to and retained by the depositor pursuant to the sale of the ERISA Eligible Certificates to the trust fund represents not more than the fair market value of such mortgage loans. The sum of all payments made to and retained by the related servicer represents not more than reasonable compensation for such servicer’s services under the pooling and servicing agreement and reimbursement of such servicer’s reasonable expenses in connection with its services; and

(v)The Plan investing in the ERISA Eligible Certificates is an “accredited investor” as defined in Rule 501(a)(1) of Regulation D of the Securities and Exchange Commission under the Securities Act of 1933, as amended.

Moreover, the Exemption would provide relief from certain self-dealing/conflict of interest prohibited transactions that may arise when a Plan fiduciary causes a Plan to acquire certificates in a trust containing receivables on which the fiduciary (or its affiliate) is an obligor only if, among other requirements, (i) in the case of the acquisition of ERISA Eligible Certificates in connection with the initial issuance, at least 50% of each class of ERISA Eligible Certificates and at least 50% of the aggregate interests in the trust fund are acquired by persons independent of the Restricted Group (as defined below), (ii) the Plan’s investment in ERISA Eligible Certificates does not exceed 25% of each class of ERISA Eligible Certificates outstanding at the time of the acquisition, (iii) immediately after the acquisition, no more than 25% of the assets of any Plan for which the fiduciary has discretionary authority or renders investment advice are invested in certificates representing an interest in one or more trusts containing assets sold or serviced by the same entity, and (iv) the fiduciary or its affiliate is an obligor with respect to obligations representing no more than 5% of the fair market value of the obligations in the trust. This relief is not available to Plans sponsored by the depositor, any underwriter, the interest rate swap provider, the interest rate cap provider, the trustee, the servicers, any obligor with respect to mortgage loans included in the trust fund constituting more than five percent of the aggregate unamortized principal balance of the assets in the trust fund, or any affiliate of such parties (the “Restricted Group”).

As of the date of this free writing prospectus, there is no obligor with respect to mortgage loans included in the trust fund constituting more than 5% of the aggregate unamortized principal balance of the assets of the trust fund.

Each purchaser that is a Plan or that is investing on behalf of or with plan assets of a Plan in reliance on the Exemption will be deemed to represent that it qualifies as an accredited investor as defined in Rule 501(a)(1) of Regulation D of the Securities Act.

The rating of a certificate may change. If a class of certificates no longer has a rating of at least BBB- or its equivalent, then certificates of that class will no longer be eligible for relief under the Exemption, and consequently may not be purchased by or sold to a Plan (although a Plan that had purchased the certificates when it had a permitted rating would not be required by the Exemption to dispose of it).

An additional requirement for eligibility under the Exemption is that all of the mortgage loans must have a Loan-to-Value Ratio of not more than 100%, based on the outstanding principal balance of the loan and the fair market value of the mortgage property as of the closing date. It is possible that, if the fair market value of any of the mortgage loans has declined substantially since origination, this requirement may not be satisfied. This possibility is greater for the seasoned loans than it is for the other mortgage loans.

The ERISA Eligible Certificates may be purchased by a Plan so long as certain conditions are met. Prior to termination of a separate trust which holds the interest rate swap agreement (the “Supplemental Interest Trust”), a Plan which meets the requirements of an investor-based class exemption may purchase the ERISA Eligible Certificates.

The holder of an ERISA Eligible Certificate will be deemed to have acquired and be holding the ERISA Eligible Certificate without the right to receive payments from the Supplemental Interest Trust and, separately, the right to receive payments from the Supplemental Interest Trust. The Exemption is not applicable to the acquisition, holding and transfer of an interest in the Supplemental Interest Trust. In addition, while the Supplemental Interest Trust is in existence, it is possible that not all of the requirements necessary for the Exemption to apply to the acquisition, holding and transfer of ERISA Eligible Certificates will be satisfied. To the extent that the Exemption might not be available, an investor in the ERISA Eligible Certificates would have to rely on other exemptions that may apply to its purchase and holding of the ERISA Eligible Certificates.

Accordingly, no Plan or other person using assets of a Plan may acquire or hold an ERISA Eligible Certificate and the right to receive payments from the Supplemental Interest Trust unless (1) such Plan is an accredited investor within the meaning of the Exemption and (2) while the Supplemental Interest Trust is in existence, such acquisition and holding are eligible for the exemptive relief available under at least one of Department of Labor Prohibited Transaction Class Exemption 84-14 (for transactions by independent “qualified professional asset managers”), 91-38 (for transactions by bank collective investment funds), 90-1 (for transactions by insurance company pooled separate accounts), 95-60 (for transactions by insurance company general accounts) or 96-23 (for transactions effected by “in-house asset managers”) (collectively, the “Investor-Based Exemptions”).

Each beneficial owner of an ERISA Eligible Certificate, or any interest therein, shall be deemed to have represented, by virtue of its acquisition or holding of the ERISA Eligible Certificate, or interest therein, that either (i) it is not a Plan or (ii) (A) it is an accredited investor within the meaning of the Exemption and (B) for so long as the Supplemental Interest Trust is in existence, the acquisition and holding of such Certificate and the right to receive payments from the Supplemental Interest Trust are eligible for the exemptive relief available under at least one of the Investor-Based Exemptions

Plan fiduciaries should consult their legal counsel concerning the availability of, and scope of relief provided by, the Exemption and the enumerated class exemptions.

If any ERISA Eligible Certificate, or any interest therein, is acquired or held in violation of the provisions of this section, the next preceding permitted beneficial owner will be treated as the beneficial owner of that certificate, retroactive to the date of transfer to the purported beneficial owner. Any purported beneficial owner whose acquisition or holding of an ERISA Eligible Certificate, or interest therein, was effected in violation of the provisions of this section shall indemnify to the extent permitted by law and hold harmless the depositor, the trustee and either servicer from and against any and all liabilities, claims, costs or expenses incurred by such parties as a result of such acquisition or holding.

Employee benefit plans that are governmental plans (as defined in section 3(32) of ERISA) and certain church plans (as defined in section 3(33) of ERISA) are not subject to ERISA requirements. However, such plans may be subject to applicable provisions of other federal and state laws materially similar to the provisions of ERISA or the Code.

Prospective Plan investors should consult with their legal advisors concerning the impact of ERISA and the Exemption or any other exemption, and the potential consequences in their specific circumstances, prior to making an investment in the certificates. Moreover, each Plan fiduciary should determine whether under the general fiduciary standards of investment prudence and diversification, an investment in the offered certificates is appropriate for the Plan, taking into account the overall investment policy of the Plan and the composition of the Plan’s investment portfolio.

LEGAL INVESTMENT

None of the Offered Certificates will constitute “mortgage related securities” for purposes of the Secondary Mortgage Market Enhancement Act of 1984, as amended and, as a result, the appropriate characterization of the Offered Certificates under various legal investment restrictions, and the ability of investors subject to these restrictions to purchase the Offered Certificates, are subject to significant interpretive uncertainties.

No representations are made as to the proper characterization of the Offered Certificates for legal investment, financial institution regulatory, or other purposes, or as to the ability of particular investors to purchase the Offered Certificates under applicable legal investment restrictions. The uncertainties described above (and any unfavorable future determinations concerning the legal investment or financial institution regulatory characteristics of the Offered Certificates) may adversely affect the liquidity of the Offered Certificates.

All investors whose investment activities are subject to legal investment laws and regulations, regulatory capital requirements, or review by regulatory authorities should consult with their own legal advisors in determining whether and to what extent the Offered Certificates will constitute legal investments for them or are subject to investment, capital, or other restrictions.

See “Legal Investment” in the prospectus.

LEGAL MATTERS

The validity of the certificates and certain federal income tax matters will be passed upon for the depositor and the underwriters by Thacher Proffitt & Wood LLP, New York, New York.

REPORTS TO CERTIFICATEHOLDERS

The trustee will be required to prepare and make available to the certificateholders statements containing information with respect to principal and interest payments and the trust, as is described in this free writing prospectus. See “Description of the Certificates—Reports to Certificateholders” in this free writing prospectus. Copies of these statements will be filed with the SEC through its EDGAR system located at “http://www.sec.gov” under the name of “Morgan Stanley ABS Capital I Inc. Trust 2007-NC1” as an exhibit to the monthly distribution reports on Form 10-D for the certificates for so long as the trust is subject to the reporting requirement of the Securities Exchange Act of 1934, as amended. In addition, the servicers will be required to furnish to the trustee or the depositor, as applicable, the compliance statements, assessments of compliance and attestation reports detailed under “The Pooling and Servicing Agreement—Servicer Reports” in this free writing prospectus. Copies of these statements and reports will be filed with the SEC under the name of the trust as an exhibit to the trust’s annual statement on Form 10-K for the Offered Certificates.

RATINGS

In order to be issued, the Offered Certificates must be assigned ratings not lower than the following by S&P and Moody’s:

Class	S&P	Moody’s
A-1	AAA	Aaa
A-2a	AAA	Aaa
A-2b	AAA	Aaa
A-2c	AAA	Aaa
A-2d	AAA	Aaa
M-1	AA+	Aa1
M-2	AA	Aa2
M-3	AA-	Aa3
M-4	A+	A1
M-5	A	A2
M-6	A-	A3
B-1	BBB+	Baa1
B-2	BBB	Baa2
B-3	BBB-	Baa3
B-4	BB+	Baa3

A securities rating addresses the likelihood of the receipt by a certificateholder of distributions on the mortgage loans to which they are entitled by the Final Scheduled Distribution Date. The rating takes into consideration the characteristics of the mortgage loans and the structural, legal and tax aspects associated with the certificates. The ratings on the Offered Certificates do not, however, constitute statements regarding the likelihood or frequency of prepayments on the mortgage loans, the payment of the Basis Risk CarryForward Amount or the possibility that a holder of an Offered Certificate might realize a lower than anticipated yield. Explanations of the significance of such ratings may be obtained from Standard & Poor’s Ratings Services, 55 Water Street, New York, New York 10041 and Moody’s Investors Service, Inc., 99 Church Street, New York, New York 10007.

A security rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning rating organization. Each security rating should be evaluated independently of any other security rating. S&P and Moody’s will monitor the ratings assigned to the Offered Certificates while the Offered Certificates remain outstanding. In the event that the ratings initially assigned to any of the Offered Certificates by S&P or Moody’s are subsequently lowered for any reason, no person or entity is obligated to provide any additional support or credit enhancement with respect to such Offered Certificates.

GLOSSARY

The following terms have the meanings given below when used in this free writing prospectus.

“Accrued Certificate Interest” means, for each class of Offered Certificates on any distribution date, the amount of interest accrued during the related Interest Accrual Period on the related Class Certificate Balance immediately prior to such distribution date at the related Pass-Through Rate, as reduced by that class’s share of net prepayment interest shortfalls and any shortfalls resulting from the application of the Relief Act, as described in “Description of the Certificates—Distributions of Interest and Principal” in this free writing prospectus.

“Adjustment Date” has the meaning set forth in “The Mortgage Loan Pool—Adjustable Rate Mortgage Loans” in this free writing prospectus.

“Applied Realized Loss Amount” has the meaning set forth in “Description of the Certificates—Distributions of Interest and Principal” in this free writing prospectus.

“Available Funds” means, with respect to any distribution date, the sum of the following amounts, to the extent received by the trustee, with respect to the mortgage loans, net of amounts payable or reimbursable to the depositor, the servicers and the trustee: (i) the aggregate amount of monthly payments on the mortgage loans due on the related due date and received by the related servicer on or prior to the related Determination Date, after deduction of the aggregate servicing fee in respect of prior distribution dates and the other components of the Expense Fee Rate for that distribution date, together with any related P&I Advance; (ii) certain unscheduled payments in respect of the mortgage loans received by the related servicer during the related Prepayment Period, including prepayments, Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds, excluding Prepayment Premiums; (iii) Compensating Interest payments from the related servicer to the trustee, in respect of net prepayment interest shortfalls for that distribution date; (iv) the proceeds from repurchases of mortgage loans, and any Substitution Adjustment Amounts received in connection with substitutions for mortgage loans, with respect to that distribution date; and (v) all proceeds received with respect to any optional clean-up call. The holders of the Class P certificates will be entitled to all Prepayment Premiums received on the mortgage loans and such amounts will not be part of Available Funds or available for distribution to the holders of the Offered Certificates.

“Basic Principal Distribution Amount” means, with respect to any distribution date, the excess of (i) the Principal Remittance Amount for that distribution date over (ii) the Excess Subordinated Amount, if any, for that distribution date.

“Basis Risk CarryForward Amount” has the meaning set forth in “Description of the Certificates—Excess Reserve Fund Account” in this free writing prospectus.

“Basis Risk Contract” has the meaning set forth in “Federal Income Tax Considerations—Taxation of Regular Interests” in this free writing prospectus.

“Basis Risk Payment” has the meaning set forth in “Description of the Certificates—Excess Reserve Fund Account” in this free writing prospectus.

“Cap Provider” has the meaning set forth in “Interest Rate Swap Provider and Interest Rate Cap Provider” in this prospectus supplement.

“Class A” means, collectively, the Class A-1, Class A-2a, Class A-2b, Class A-2c and Class A-2d certificates.

“Class A Certificate Group” means either the Group I Class A Certificates or the Group II Class A Certificates, as applicable.

“Class A Principal Allocation Percentage” for any distribution date is the percentage equivalent of a fraction, determined as follows:

(1)with respect to the Group I Class A Certificates, a fraction, the numerator of which is the portion of the Principal Remittance Amount for that distribution date that is attributable to the principal received or advanced on the group I mortgage loans and the denominator of which is the Principal Remittance Amount for that distribution date; and

(2)with respect to the Group II Class A Certificates, a fraction, the numerator of which is the portion of the Principal Remittance Amount for that distribution date that is attributable to the principal received or advanced on the group II mortgage loans and the denominator of which is the Principal Remittance Amount for that distribution date.

“Class A Principal Distribution Amount” with respect to any distribution date is the excess of (A) the aggregate Class Certificate Balance of the Class A certificates immediately prior to that distribution date over (B) the lesser of (x) approximately 55.00% of the aggregate Stated Principal Balance of the mortgage loans for that distribution date and (y) the excess, if any, of the aggregate Stated Principal Balance of the mortgage loans for that distribution date over $6,250,040.

“Class B” means, collectively, the Class B-1, Class B-2, Class B-3 and Class B-4 certificates.

“Class B-1 Principal Distribution Amount” with respect to any distribution date is the excess of (i) the sum of (A) the aggregate Class Certificate Balances of the Class A certificates (after taking into account the distribution of the Class A Principal Distribution Amount for that distribution date), (B) the Class Certificate Balance of the Class M-1 certificates (after taking into account the distribution of the Class M-1 Principal Distribution Amount for that distribution date), (C) the Class Certificate Balance of the Class M-2 certificates (after taking into account the distribution of the Class M-2 Principal Distribution Amount for that distribution date), (D) the Class Certificate Balance of the Class M-3 certificates (after taking into account the distribution of the Class M-3 Principal Distribution Amount for that distribution date), (E) the Class Certificate Balance of the Class M-4 certificates (after taking into account the distribution of the Class M-4 Principal Distribution Amount for that distribution date), (F) the Class Certificate Balance of the Class M-5 certificates (after taking into account the distribution of the Class M-5 Principal Distribution Amount for that distribution date), (G) the Class Certificate Balance of the Class M-6 certificates (after taking into account the distribution of the Class M-6 Principal Distribution Amount for that distribution date), and (H) the Class Certificate Balance of the Class B-1 certificates immediately prior to that distribution date over (ii) the lesser of (A) approximately 88.60% of the aggregate Stated Principal Balance of the mortgage loans for that distribution date and (B) the excess, if any, of the aggregate Stated Principal Balance of the mortgage loans for that distribution date over $6,250,040.

“Class B-2 Principal Distribution Amount” with respect to any distribution date is the excess of (i) the sum of (A) the aggregate Class Certificate Balances of the Class A certificates (after taking into account the distribution of the Class A Principal Distribution Amount for that distribution date), (B) the Class Certificate Balance of the Class M-1 certificates (after taking into account the distribution of the Class M-1 Principal Distribution Amount for that distribution date), (C) the Class Certificate Balance of the Class M-2 certificates (after taking into account the distribution of the Class M-2 Principal Distribution Amount for that distribution date), (D) the Class Certificate Balance of the Class M-3 certificates (after taking into account the distribution of the Class M-3 Principal Distribution Amount for that distribution date), (E) the Class Certificate Balance of the Class M-4 certificates (after taking into account the distribution of the Class M-4 Principal Distribution Amount for that distribution date), (F) the Class Certificate Balance of the Class M-5 certificates (after taking into account the distribution of the Class M-5 Principal Distribution Amount for that distribution date), (G) the Class Certificate Balance of the Class M-6 certificates (after taking into account the distribution of the Class M-6 Principal Distribution Amount for that distribution date), (H) the Class Certificate Balance of the Class B-1 certificates (after taking into account the distribution of the Class B-1 Principal Distribution Amount for that distribution date), and (I) the Class Certificate Balance of the Class B-2 certificates immediately prior to that distribution date over (ii) the lesser of (A) approximately 90.10% of the aggregate Stated Principal Balance of the mortgage loans for that distribution date and (B) the excess, if any, of the aggregate Stated Principal Balance of the mortgage loans for that distribution date over $6,250,040.

“Class B-3 Principal Distribution Amount” with respect to any distribution date is the excess of (i) the sum of (A) the aggregate Class Certificate Balances of the Class A certificates (after taking into account the distribution of the Class A Principal Distribution Amount for that distribution date), (B) the Class Certificate Balance of the Class M-1 certificates (after taking into account the distribution of the Class M-1 Principal Distribution Amount for that distribution date), (C) the Class Certificate Balance of the Class M-2 certificates (after taking into account the distribution of the Class M-2 Principal Distribution Amount for that distribution date), (D) the Class Certificate Balance of the Class M-3 certificates (after taking into account the distribution of the Class M-3 Principal Distribution Amount for that distribution date), (E) the Class Certificate Balance of the Class M-4 certificates (after taking into account the distribution of the Class M-4 Principal Distribution Amount for that distribution date), (F) the Class Certificate Balance of the Class M-5 certificates (after taking into account the distribution of the Class M-5 Principal Distribution Amount for that distribution date), (G) the Class Certificate Balance of the Class M-6 certificates (after taking into account the distribution of the Class M-6 Principal Distribution Amount for that distribution date), (H) the Class Certificate Balance of the Class B-1 certificates (after taking into account the distribution of the Class B-1 Principal Distribution Amount for that distribution date), (I) the Class Certificate Balance of the Class B-2 certificates (after taking into account the distribution of the Class B-2 Principal Distribution Amount for that distribution date), and (J) the Class Certificate Balance of the Class B-3 certificates immediately prior to that distribution date over (ii) the lesser of (A) approximately 92.60% of the aggregate Stated Principal Balance of the mortgage loans for that distribution date and (B) the excess, if any, of the aggregate Stated Principal Balance of the mortgage loans for that distribution date over $6,250,040.

“Class B-4 Principal Distribution Amount” with respect to any distribution date is the excess of (i) the sum of (A) the aggregate Class Certificate Balances of the Class A certificates (after taking into account the distribution of the Class A Principal Distribution Amount for that distribution date), (B) the Class Certificate Balance of the Class M-1 certificates (after taking into account the distribution of the Class M-1 Principal Distribution Amount for that distribution date), (C) the Class Certificate Balance of the Class M-2 certificates (after taking into account the distribution of the Class M-2 Principal Distribution Amount for that distribution date), (D) the Class Certificate Balance of the Class M-3 certificates (after taking into account the distribution of the Class M-3 Principal Distribution Amount for that distribution date), (E) the Class Certificate Balance of the Class M-4 certificates (after taking into account the distribution of the Class M-4 Principal Distribution Amount for that distribution date), (F) the Class Certificate Balance of the Class M-5 certificates (after taking into account the distribution of the Class M-5 Principal Distribution Amount for that distribution date), (G) the Class Certificate Balance of the Class M-6 certificates (after taking into account the distribution of the Class M-6 Principal Distribution Amount for that distribution date), (H) the Class Certificate Balance of the Class B-1 certificates (after taking into account the distribution of the Class B-1 Principal Distribution Amount for that distribution date), (I) the Class Certificate Balance of the Class B-2 certificates (after taking into account the distribution of the Class B-2 Principal Distribution Amount for that distribution date), (J) the Class Certificate Balance of the Class B-3 certificates (after taking into account the distribution of the Class B-3 Principal Distribution Amount for that distribution date),and (J) the Class Certificate Balance of the Class B-4 certificates immediately prior to that distribution date over (ii) the lesser of (A) approximately 94.30% of the aggregate Stated Principal Balance of the mortgage loans for that distribution date and (B) the excess, if any, of the aggregate Stated Principal Balance of the mortgage loans for that distribution date over $6,250,040.

“Class Certificate Balance” means, with respect to any class of Offered Certificates as of any distribution date, the aggregate principal amount of that class upon initial issuance on the closing date reduced by the sum of (i) all amounts previously distributed to holders of certificates of that class as distributions of principal and (ii) in the case of any class of Class M or Class B certificates, the amount of any Applied Realized Loss Amounts previously allocated to that class of Class M or Class B certificates; provided, however, that immediately following the distribution date on which a Subsequent Recovery is distributed, the Class Certificate Balance of any class or classes of certificates that have been previously reduced by Applied Realized Loss Amounts will be increased, in order of seniority, by the amount of any Subsequent Recoveries distributed on that distribution date (up to the amount of the Unpaid Realized Loss Amount for such class or classes for that distribution date).

“Class M” means, collectively, the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5 and Class M-6 certificates.

“Class M-1 Enhancement Percentage” means, for any distribution date, the percentage obtained by dividing (x) the sum of (i) the aggregate Class Certificate Balances of the Class M and Class B certificates (other than the Class M-1 certificates) and (ii) the Subordinated Amount, in each case after taking into account the distributions of the related Principal Distribution Amount and any principal payments on those classes of certificates from the Swap Account on that distribution date, by (y) the aggregate Stated Principal Balance of the mortgage loans for that distribution date.

“Class M-1 Principal Distribution Amount” with respect to any distribution date is the excess of (i) the sum of (A) the aggregate Class Certificate Balances of the Class A certificates (after taking into account the distribution of the Class A Principal Distribution Amount for that distribution date) and (B) the Class Certificate Balance of the Class M-1 certificates immediately prior to that distribution date over (ii) the lesser of (A) approximately 63.00% of the aggregate Stated Principal Balance of the mortgage loans for that distribution date and (B) the excess, if any, of the aggregate Stated Principal Balance of the mortgage loans for that distribution date over $6,250,040.

“Class M-2 Principal Distribution Amount” with respect to any distribution date is the excess of (i) the sum of (A) the aggregate Class Certificate Balances of the Class A certificates (after taking into account the distribution of the Class A Principal Distribution Amount for that distribution date), (B) the Class Certificate Balance of the Class M-1 certificates (after taking into account the distribution of the Class M-1 Principal Distribution Amount for that distribution date) and (C) the Class Certificate Balance of the Class M-2 certificates immediately prior to that distribution date over (ii) the lesser of (A) approximately 72.30% of the aggregate Stated Principal Balance of the mortgage loans for that distribution date and (B) the excess, if any, of the aggregate Stated Principal Balance of the mortgage loans for that distribution date over $6,250,040.

“Class M-3 Principal Distribution Amount” with respect to any distribution date is the excess of (i) the sum of (A) the aggregate Class Certificate Balances of the Class A certificates (after taking into account the distribution of the Class A Principal Distribution Amount for that distribution date), (B) the Class Certificate Balance of the Class M-1 certificates (after taking into account the distribution of the Class M-1 Principal Distribution Amount for that distribution date), (C) the Class Certificate Balance of the Class M-2 certificates (after taking into account the distribution of the Class M-2 Principal Distribution Amount for that distribution date) and (D) the Class Certificate Balance of the Class M-3 certificates immediately prior to that distribution date over (ii) the lesser of (A) approximately 75.40% of the aggregate Stated Principal Balance of the mortgage loans for that distribution date and (B) the excess, if any, of the aggregate Stated Principal Balance of the mortgage loans for that distribution date over $6,250,040.

“Class M-4 Principal Distribution Amount” with respect to any distribution date is the excess of (i) the sum of (A) the aggregate Class Certificate Balances of the Class A certificates (after taking into account the distribution of the Class A Principal Distribution Amount for that distribution date), (B) the Class Certificate Balance of the Class M-1 certificates (after taking into account the distribution of the Class M-1 Principal Distribution Amount for that distribution date), (C) the Class Certificate Balance of the Class M-2 certificates (after taking into account the distribution of the Class M-2 Principal Distribution Amount for that distribution date), (D) the Class Certificate Balance of the Class M-3 certificates (after taking into account the distribution of the Class M-3 Principal Distribution Amount for that distribution date) and (E) the Class Certificate Balance of the Class M-4 certificates immediately prior to that distribution date over (ii) the lesser of (A) approximately 79.40% of the aggregate Stated Principal Balance of the mortgage loans for that distribution date and (B) the excess, if any, of the aggregate Stated Principal Balance of the mortgage loans for that distribution date over $6,250,040.

“Class M-5 Principal Distribution Amount” with respect to any distribution date is the excess of (i) the sum of (A) the aggregate Class Certificate Balances of the Class A certificates (after taking into account the distribution of the Class A Principal Distribution Amount for that distribution date), (B) the Class Certificate Balance of the Class M-1 certificates (after taking into account the distribution of the Class M-1 Principal Distribution Amount for that distribution date), (C) the Class Certificate Balance of the Class M-2 certificates (after taking into account the distribution of the Class M-2 Principal Distribution Amount for that distribution date), (D) the Class Certificate Balance of the Class M-3 certificates (after taking into account the distribution of the Class M-3 Principal Distribution Amount for that distribution date), (E) the Class Certificate Balance of the Class M-4 certificates (after taking into account the distribution of the Class M-4 Principal Distribution Amount for that distribution date) and (F) the Class Certificate Balance of the Class M-5 certificates immediately prior to that distribution date over (ii) the lesser of (A) approximately 83.20% of the aggregate Stated Principal Balance of the mortgage loans for that distribution date and (B) the excess, if any, of the aggregate Stated Principal Balance of the mortgage loans for that distribution date over $6,250,040.

“Class M-6 Principal Distribution Amount” with respect to any distribution date is the excess of (i) the sum of (A) the aggregate Class Certificate Balances of the Class A certificates (after taking into account the distribution of the Class A Principal Distribution Amount for that distribution date), (B) the Class Certificate Balance of the Class M-1 certificates (after taking into account the distribution of the Class M-1 Principal Distribution Amount for that distribution date), (C) the Class Certificate Balance of the Class M-2 certificates (after taking into account the distribution of the Class M-2 Principal Distribution Amount for that distribution date), (D) the Class Certificate Balance of the Class M-3 certificates (after taking into account the distribution of the Class M-3 Principal Distribution Amount for that distribution date), (E) the Class Certificate Balance of the Class M-4 certificates (after taking into account the distribution of the Class M-4 Principal Distribution Amount for that distribution date), (F) the Class Certificate Balance of the Class M-5 certificates (after taking into account the distribution of the Class M-5 Principal Distribution Amount for that distribution date) and (G) the Class Certificate Balance of the Class M-6 certificates immediately prior to that distribution date over (ii) the lesser of (A) approximately 85.40% of the aggregate Stated Principal Balance of the mortgage loans for that distribution date and (B) the excess, if any, of the aggregate Stated Principal Balance of the mortgage loans for that distribution date over $6,250,040.

“Code” has the meaning set forth in “Federal Income Tax Considerations” in this free writing prospectus.

“Compensating Interest” has the meaning set forth in “The Pooling and Servicing Agreement—Prepayment Interest Shortfalls” in this free writing prospectus.

“Condemnation Proceeds” means all awards or settlements in respect of a mortgaged property, whether permanent or temporary, partial or entire, by exercise of the power of eminent domain or condemnation.

“Countrywide Servicing” has the meaning set forth in “The Servicers” in this free writing prospectus.

“Credit Scores” has the meaning set forth in “The Mortgage Loan Pool—Credit Scores” in this free writing prospectus.

“Cumulative Loss Trigger Event” with respect to any distribution date means the circumstances in which the aggregate amount of Realized Losses incurred since the cut-off date through the last day of the related Prepayment Period divided by the aggregate Stated Principal Balance of the mortgage loans as of the cut-off date exceeds the applicable cumulative loss percentages described below with respect to such distribution date:

Distribution Date Occurring In	Cumulative Loss Percentage
February 2009 through January 2010	1.400% for the first month, plus an additional 1/12th of 1.700% for each month thereafter (e.g., 2.250% in August 2009)
February 2010 through January 2011	3.100% for the first month, plus an additional 1/12th of 1.700% for each month thereafter (e.g., 3.950% in August 2010)
February 2011 through January 2012	4.800% for the first month, plus an additional 1/12th of 1.400% for each month thereafter (e.g., 5.500% in August 2011)
February 2012 through January 2013	6.200% for the first month, plus an additional 1/12th of 0.750% for each month thereafter (e.g., 6.575% in August 2012)
February 2013 through January 2014	6.950% for the first month, plus an additional 1/12th of 0.050% for each month thereafter (e.g., 6.975% in August 2013)
February 2014 and thereafter	7.000%

“DBNTC” has the meaning set forth in “The Trustee” in this free writing prospectus.

“Defaulted Swap Termination Payment” has the meaning set forth in “Description of the Certificates—Interest Rate Swap Agreement” in this free writing prospectus.

“Delinquency Trigger Event” means (1) with respect to any distribution date until the aggregate Class Certificate Balance of the Class A certificates has been reduced to zero, the circumstances in which the quotient (expressed as a percentage) of (x) the rolling three-month average of the aggregate Stated Principal Balance of mortgage loans that are 60 days or more Delinquent (including mortgage loans in foreclosure and mortgage loans related to REO property) and (y) the aggregate Stated Principal Balance of the mortgage loans, as of the last day of the related Due Period, equals or exceeds (z) 35.55% of the prior period’s Senior Enhancement Percentage and (2) with respect to any distribution date on or after the distribution date on which the aggregate Class Certificate Balance of the Class A certificates has been reduced to zero, the circumstances in which the quotient (expressed as a percentage) of (x) the rolling three-month average of the aggregate Stated Principal Balance of mortgage loans that are 60 days or more Delinquent (including mortgage loans in foreclosure and mortgage loans related to REO property) and (y) the aggregate Stated Principal Balance of the mortgage loans, as of the last day of the related Due Period, equals or exceeds (z) 43.24% of the prior period’s Class M-1 Enhancement Percentage.

“Delinquent,” with respect to any mortgage loan, means any monthly payment due on a due date that is not made by the close of business on the next scheduled due date for that mortgage loan.

“Determination Date” means, with respect to each distribution date, the 18th day (or if that day is not a business day, the immediately preceding business day) in the case of Countrywide Servicing, and the 15th day (or if that day is not a business day, the immediately preceding business day) in the case of Saxon, of the calendar month in which that distribution date occurs.

“DOL” has the meaning set forth in “ERISA Considerations” in this free writing prospectus.

“Due Period” means, with respect to any distribution date, the period commencing on the second day of the calendar month preceding the month in which that distribution date occurs and ending on the first day of the calendar month in which that distribution date occurs.

“ERISA” has the meaning set forth in “ERISA Considerations” in this free writing prospectus.

“Excess Reserve Fund Account” has the meaning set forth in “Description of the Certificates—Excess Reserve Fund Account” in this free writing prospectus.

“Excess Subordinated Amount” is described in “Description of the Certificates—Overcollateralization Provisions” in this free writing prospectus.

“Exemption” has the meaning set forth in “ERISA Considerations” in this free writing prospectus.

“Expense Fee Rate” means, with respect to any mortgage loan, a per annum rate equal to the sum of the servicing fee rate and the trustee fee rate. The Expense Fee Rate is not expected to exceed 0.52%. See “Description of the Certificates—Administration Fees”and “The Pooling and Servicing Agreement—Servicing and Trustee Fees and Other Compensation and Payment of Expenses” in this free writing prospectus.

“Extra Principal Distribution Amount” means, as of any distribution date, the lesser of (x) the related Total Monthly Excess Spread for that distribution date and (y) the related Subordination Deficiency for that distribution date.

“Final Scheduled Distribution Date” has the meaning set forth in “Prepayment and Yield Considerations—Final Scheduled Distribution Date” in this free writing prospectus.

“First Tier Downgrade Termination Event” has the meaning set forth in “Description of the Certificates—Interest Rate Swap Agreement” in this free writing prospectus.

“First Tier Required Swap Counterparty Rating” means, with respect to a counterparty or entity guaranteeing the obligations of such counterparty, (x) either (i) if such counterparty or entity has only a long-term senior, unsecured debt obligation rating, credit rating or other similar rating (as the case may be, the “Long-Term Rating”) by Moody’s, a Long-Term Rating of at least “A1” by Moody’s or (ii) if such counterparty or entity has both a Long-Term Rating and a short-term senior, unsecured debt obligation rating, credit rating or other similar rating (as the case may be, the “Short-Term Rating”) by Moody’s, a Long-Term Rating of at least “A2” by Moody’s and a Short-Term Rating of at least “P-1” by Moody’s and (y) (i) a Short-Term Rating of at least “A-1” by S&P or (ii) if such counterparty or entity does not have a Short-Term Rating by S&P, a Long-Term Rating of at least “A+” by S&P.

“Gross Margin” has the meaning set forth in “The Mortgage Loan Pool—Adjustable Rate Mortgage Loans” in this free writing prospectus.

“Group I Class A Certificates” means the Class A-1 certificates.

“Group I Loan Cap” has the meaning set forth in “Description of the Certificates—Distributions of Interest and Principal” in this free writing prospectus.

“Group II Class A Certificates” means the Class A-2a, Class A-2b, Class A-2c and Class A-2d certificates, collectively.

“Group II Loan Cap” has the meaning set forth in “Description of the Certificates—Distributions of Interest and Principal” in this free writing prospectus.

“Initial Cap” has the meaning set forth in “The Mortgage Loan Pool—Adjustable Rate Mortgage Loans” in this free writing prospectus.

“Insurance Proceeds” means, with respect to each mortgage loan, proceeds of insurance policies insuring the mortgage loan or the related mortgaged property.

“Interest Accrual Period” means, for any distribution date, the period commencing on the immediately preceding distribution date (or, for the initial distribution date, the closing date) and ending on the day immediately preceding the current distribution date.

“Interest Rate Cap Payment” has the meaning set forth in “Description of the Certificates—Interest Rate Cap Agreement” in this prospectus supplement.

“Interest Remittance Amount” means, with respect to any distribution date and the mortgage loans in a loan group, that portion of Available Funds attributable to interest received or advanced on the mortgage loans in that loan group, net of any Net Swap Payments and any Swap Termination Payments, other than Defaulted Swap Termination Payments, payable to the Swap Provider from Available Funds with respect to such distribution date.

“Investor-Based Exemptions” has the meaning set forth in “ERISA Considerations” in this free writing prospectus.

“IRS” means the Internal Revenue Service.

“ISDA Credit Support” has the meaning set forth in “Description of the Certificates—Interest Rate Swap Agreement” in this free writing prospectus.

“LIBOR Determination Date” means, with respect to any Interest Accrual Period for the Offered Certificates, the second London business day preceding the commencement of that Interest Accrual Period. For purposes of determining One-Month LIBOR, a “London business day” is any day on which dealings in deposits of United States dollars are transacted in the London interbank market.

“Liquidation Proceeds” means any cash received in connection with the liquidation of a defaulted mortgage loan, whether through a trustee’s sale, foreclosure sale or otherwise, including any Subsequent Recoveries.

“Loan Index” has the meaning set forth in “The Mortgage Loan Pool—The Index” in this free writing prospectus.

“Maximum Rate” has the meaning set forth in “The Mortgage Loan Pool—Adjustable Rate Mortgage Loans” in this free writing prospectus.

“Minimum Rate” has the meaning set forth in “The Mortgage Loan Pool—Adjustable Rate Mortgage Loans” in this free writing prospectus.

“Moody’s” means Moody’s Investors Service, Inc.

“MSCS” means Morgan Stanley Capital Services Inc.

“MSMC” means Morgan Stanley Mortgage Capital Inc.

“MSSA” means Morgan Stanley Securitized Assets LLC.

“NC Capital” has the meaning set forth in “The Mortgage Loan Pool—Underwriting Guidelines” in this free writing prospectus.

“Net Interest Margin Securities” has the meaning set forth in “The Pooling and Servicing Agreement—Termination; Optional Clean-up Call” in this free writing prospectus.

“Net Monthly Excess Cash Flow” has the meaning set forth in “Description of the Certificates—Overcollateralization Provisions” in this free writing prospectus.

“Net Swap Payment” has the meaning set forth in “Description of the Certificates—Interest Rate Swap Agreement” in this free writing prospectus.

“Net Swap Receipt” has the meaning set forth in “Description of the Certificates—Interest Rate Swap Agreement” in this free writing prospectus.

“New Century” has the meaning set forth in “The Mortgage Loan Pool—Underwriting Guidelines” in this free writing prospectus.

“New Century Underwriting Guidelines” has the meaning set forth in “The Mortgage Loan Pool—Underwriting Guidelines—NC Capital Corporation—Underwriting Standards” in this free writing prospectus.

“Offered Certificates” has the meaning set forth in “Description of the Certificates” in this free writing prospectus.

“OID” has the meaning set forth in “Federal Income Tax Considerations” in this free writing prospectus.

“One-Month LIBOR” means, as of any LIBOR Determination Date, the London interbank offered rate for one-month United States dollar deposits which appears in the Telerate Page 3750 as of 11:00 a.m., London time, on that date. If the rate does not appear on Telerate Page 3750, the rate for that day will be determined on the basis of the rates at which deposits in United States dollars are offered by the Reference Banks at approximately 11:00 a.m. (London time), on that day to prime banks in the London interbank market. The trustee will be required to request the principal London office of each of the Reference Banks to provide a quotation of its rate. If at least two quotations are provided, the rate for that day will be the arithmetic mean of the quotations (rounded upwards if necessary to the nearest whole multiple of 1/16%). If fewer than two quotations are provided as requested, the rate for that day will be the arithmetic mean of the rates quoted by major banks in New York City, selected by the trustee, after consultation with the depositor, at approximately 11:00 a.m. (New York City time) on that day for loans in United States dollars to leading European banks.

“Original Seller Agreement” has the meaning set forth in “Description of the Certificates—Assignment of the Mortgage Loans” in this free writing prospectus.

“P&I Advances” means advances made by each servicer (including the trustee as successor servicer or any other successor servicer) on each Servicer Remittance Date with respect to delinquent payments of interest and/or principal on the mortgage loans, less the servicing fee.

“Pass-Through Rate” has the meaning set forth in “Description of Certificates—Distributions of Interest and Principal” in this free writing prospectus.

“Periodic Cap” has the meaning set forth in “The Mortgage Loan Pool—Adjustable Rate Mortgage Loans” in this free writing prospectus.

“Plan” has the meaning set forth in “ERISA Considerations” in this free writing prospectus.

“Prepayment Interest Excesses” has the meaning set forth in “The Pooling and Servicing Agreement—Prepayment Interest Shortfalls” in this free writing prospectus.

“Prepayment Period” means, with respect to any distribution date the period commencing on the 16th day of the month preceding the month in which such distribution date occurs (or in the case of the first distribution date, commencing on the cut-off date) and ending on the 15th day of the month in which that distribution date occurs.

“Prepayment Premium” has the meaning set forth in “The Mortgage Loan Pool—Prepayment Premiums” in this free writing prospectus.

“Principal Distribution Amount” has the meaning set forth in “Description of the Certificates—Distributions of Interest and Principal” in this free writing prospectus.

“Principal Remittance Amount” means, with respect to any distribution date, to the extent of funds available for distribution as described in this free writing prospectus, the amount equal to the sum of the following amounts (without duplication) with respect to the related Due Period: (i) each scheduled payment of principal on a mortgage loan due during the related Due Period and received by the related servicer on or prior to the related Determination Date or advanced by the related servicer for the related Servicer Remittance Date; (ii) all full and partial principal prepayments received during the related Prepayment Period; (iii) all net Liquidation Proceeds, Condemnation Proceeds and Insurance Proceeds on the mortgage loans allocable to principal and received during the related Prepayment Period; (iv) the portion allocable to principal of proceeds of repurchases of mortgage loans with respect to that distribution date; (v) all Substitution Adjustment Amounts allocable to principal received in connection with the substitution of any mortgage loan as of that distribution date; and (vi) the allocable portion of the proceeds received with respect to any optional clean-up call (to the extent they relate to principal).

“PTE” has the meaning set forth in “ERISA Considerations” in this free writing prospectus.

“Rating Agency Condition” means, with respect to any action to which a Rating Agency Condition applies, that each rating agency shall have been given ten days (or such shorter period as is acceptable to each rating agency) prior notice of that action and that each of the rating agencies shall have notified the trustee, the servicers, the depositor and the trust in writing that such action will not result in a reduction, qualification or withdrawal of the then current rating of the certificates that it maintains.

“Realized Loss” is the excess of the scheduled principal balance of a defaulted mortgage loan over the net liquidation proceeds with respect thereto that are allocated to principal.

“Record Date” means, with respect to the Offered Certificates, the business day immediately preceding the related distribution date, unless the Offered Certificates are issued in definitive form, in which case the Record Date will be the last business day of the calendar month immediately preceding the related distribution date.

“Reference Banks” means leading banks selected by the trustee, after consultation with the depositor, and engaged in transactions in Eurodollar deposits in the international Eurocurrency market.

“Regular Interest” has the meaning set forth in “Federal Income Tax Considerations—Taxation of Regular Interests” in this free writing prospectus.

“Regulation AB” has the meaning set forth in “Description of the Certificates—Interest Rate Swap Agreement” in this free writing prospectus.

“Relief Act” means the Servicemembers Civil Relief Act and any similar state statutes.

“Replacement Swap Provider Payment” has the meaning set forth in “Description of the Certificates—Swap Account” in this free writing prospectus.

“Restricted Group” has the meaning set forth in “ERISA Considerations” in this free writing prospectus.

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.

“Saxon” has the meaning set forth in “The Servicers” in this free writing prospectus.

“Second Tier Downgrade Termination Event”has the meaning set forth in “Description of the Certificates—Interest Rate Swap Agreement” in this free writing prospectus.

“Second Tier Required Swap Counterparty Rating”means, with respect to a counterparty or entity guaranteeing the obligations of such counterparty, (x) either (i) if such counterparty or entity has only a Long-Term Rating by Moody’s, a Long-Term Rating of at least “A3” by Moody’s or (ii) if such counterparty or entity has both a Long-Term Rating and a Short-Term Rating by Moody’s, a Long-Term Rating of at least “A3” by Moody’s and a Short-Term Rating of at least “P-2” by Moody’s and (y) a Short-Term Rating of at least “A-3” by S&P and a Long-Term Rating of at least “BBB-” by S&P.

“Senior Enhancement Percentage” means, for any distribution date, the percentage obtained by dividing (x) the sum of (i) the aggregate Class Certificate Balances of the Class M and Class B certificates and (ii) the Subordinated Amount, in each case after taking into account the distributions of the related Principal Distribution Amount and any principal payments on those classes of certificates from the Swap Account on that distribution date, by (y) the aggregate Stated Principal Balance of the mortgage loans for that distribution date.

“Senior Specified Enhancement Percentage” on any date of determination is approximately 45.00%.

“Servicer Remittance Date” will be the second business day immediately preceding each distribution date with respect to Countrywide Servicing, and the 21st day (or if such day is a Saturday, then it shall be the first business day immediately preceding that day, or if such day is a Sunday or otherwise not a business day, then it shall be the immediately following business day) of the month of each related distribution date with respect to Saxon.

“SMMEA” means the Secondary Mortgage Market Enhancement Act of 1984, as amended.

“Specified Subordinated Amount” means, prior to the Stepdown Date, an amount equal to 2.85% of the aggregate Stated Principal Balance of the mortgage loans as of the cut-off date. On and after the Stepdown Date, an amount equal to 5.70% of the aggregate Stated Principal Balance of the mortgage loans for that distribution date, subject, until the Class Certificate Balance of each class of Offered Certificates has been reduced to zero, to a minimum amount equal to 0.50% of the aggregate Stated Principal Balance of the mortgage loans as of the cut-off date; provided, however, that if, on any distribution date, a Trigger Event exists, the Specified Subordinated Amount will not be reduced to the applicable percentage of the then aggregate Stated Principal Balance of the mortgage loans, but instead will remain the same as the prior period’s Specified Subordinated Amount until the distribution date on which a Trigger Event no longer exists. When the Class Certificate Balance of each class of Offered Certificates has been reduced to zero, the Specified Subordinated Amount will thereafter equal zero.

“Stated Principal Balance” means, as to any mortgage loan and as of any date of determination, (i) the principal balance of the mortgage loan at the cut-off date after giving effect to payments of principal due on or before such date (whether or not received), minus (ii) all amounts previously remitted to the trustee with respect to the related mortgage loan representing payments or recoveries of principal, including advances in respect of scheduled payments of principal. For purposes of any distribution date, the Stated Principal Balance of any mortgage loan will give effect to any scheduled payments of principal received by the related servicer on or prior to the related Determination Date or advanced by the related servicer for the related Servicer Remittance Date and any unscheduled principal payments and other unscheduled principal collections received during the related Prepayment Period, and the Stated Principal Balance of any mortgage loan that has prepaid in full or has been liquidated during the related Prepayment Period will be zero.

“Stepdown Date” means the later to occur of (i) the earlier to occur of (a) the distribution date in February 2010 and (b) the distribution date following the distribution date on which the aggregate Class Certificate Balances of the Class A certificates have been reduced to zero and (ii) the first distribution date on which the Senior Enhancement Percentage (calculated for this purpose only after taking into account payments of principal applied to reduce the Stated Principal Balance of the mortgage loans for that distribution date but prior to any allocation of the Principal Distribution Amount and principal payments from the Swap Account to the certificates on that distribution date) is greater than or equal to the Senior Specified Enhancement Percentage.

“Subordinated Amount” is described in “Description of the Certificates—Overcollateralization Provisions” in this free writing prospectus.

“Subordinated Certificates” means any of the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3 or Class B-4 certificates.

“Subordination Deficiency” has the meaning set forth in “Description of the Certificates—Overcollateralization Provisions” in this free writing prospectus.

“Subordination Reduction Amount” is described in “Description of the Certificates—Overcollateralization Provisions” in this free writing prospectus.

“Subsequent Recovery” has the meaning set forth in “Description of the Certificates—Distributions of Interest and Principal” in this free writing prospectus.

“Substitute Mortgage Loan” means a mortgage loan substituted by NC Capital for a mortgage loan that is in breach of NC Capital representations and warranties regarding the mortgage loans or with respect to which a document defect exists, which must, on the date of such substitution (i) have a principal balance, after deduction of the principal portion of the scheduled payment due in the month of substitution, not in excess of, and not more than 10% less than, the outstanding principal balance of the mortgage loan in breach; (ii) be accruing interest at a rate no lower than and not more than 1% per annum higher than, that of the mortgage loan in breach; (iii) have a loan-to-value ratio no higher than that of the mortgage loan in breach; (iv) have a remaining term to maturity no greater than (and not more than one year less than that of) the mortgage loan in breach; and (v) comply with each representation and warranty made by NC Capital.

“Substitution Adjustment Amount” has the meaning set forth in “Description of the Certificates—Representations and Warranties Relating to the Mortgage Loans” in this free writing prospectus.

“Substitution Event” has the meaning set forth in “Description of the Certificates—Interest Rate Swap Agreement” in this free writing prospectus.

“Swap Account” has the meaning set forth in “Description of the Certificates—Swap Account” in this free writing prospectus.

“Swap Payment Allocation” has the meaning set forth in “Description of the Certificates—Swap Account” in this free writing prospectus.

“Swap Payment Rate” has the meaning set forth in “Description of the Certificates—Distributions of Interest and Principal” in this free writing prospectus.

“Swap Provider” has the meaning set forth in “Interest Rate Swap Provider and Interest Rate Cap Provider” in this free writing prospectus.

“Swap Termination Payment” has the meaning set forth in “Description of the Certificates—Interest Rate Swap Agreement” in this free writing prospectus.

“Telerate Page 3750” means the display page currently so designated on the Bridge Telerate Service (or any other page as may replace that page on that service for the purpose of displaying comparable rates or prices).

“Total Monthly Excess Spread” as to any distribution date equals the excess, if any, of (x) the interest on the mortgage loans received by the servicers on or prior to the related Determination Date (exclusive of Prepayment Interest Excesses) or advanced by the servicers for the related Servicer Remittance Date, net of the aggregate servicing fee and the expenses used to determine the Expense Fee Rate, over (y) the sum of (a) the amounts paid to the classes of certificates pursuant to clause (i) in the ninth full paragraph of “Description of the Certificates—Distributions of Interest and Principal” in this free writing prospectus, (b) any Net Swap Payments to the Swap Provider and (c) any Swap Termination Payment (other than a Defaulted Swap Termination Payment) payable to the Swap Provider from Available Funds.

“Trigger Event” means either a Cumulative Loss Trigger Event or a Delinquency Trigger Event.

“Trust REMIC” has the meaning set forth in “Federal Income Tax Considerations—General” in this free writing prospectus.

“Unpaid Interest Amount” for any class of certificates and any distribution date will equal the sum of (a) the portion of Accrued Certificate Interest from distribution dates prior to the current distribution date remaining unpaid immediately prior to the current distribution date, and (b) interest on the amount in clause (a) above at the applicable Pass-Through Rate (to the extent permitted by applicable law).

“Unpaid Realized Loss Amount” means, with respect to any class of Class M or Class B certificates and as to any distribution date, the excess of (i) Applied Realized Loss Amounts with respect to that class over (ii) the sum of (a) all distributions in reduction of Applied Realized Loss Amounts on all previous distribution dates, and (b) the amount by which the Class Certificate Balance of such class has been increased due to the distribution of any Subsequent Recoveries on all previous distribution dates. Any amounts distributed to a class of Subordinated Certificates in respect of any Unpaid Realized Loss Amount will not be applied to reduce the Class Certificate Balance of that class.

“WAC Cap” has the meaning set forth in “Description of the Certificates—Distributions of Interest and Principal” in this free writing prospectus.

ANNEX I

CERTAIN U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS

A holder that is not a “United States person” (a “U.S. person”) within the meaning of Section 7701(a)(30) of the Internal Revenue Code (a “non-U.S. holder”) holding a book-entry certificate through Clearstream, société anonyme, Euroclear or DTC may be subject to U.S. withholding tax unless such holder provides certain documentation to the issuer of such holder’s book-entry certificate, the paying agent or any other entity required to withhold tax (any of the foregoing, a “U.S. withholding agent”) establishing an exemption from withholding. A non-U.S. holder may be subject to withholding unless each U.S. withholding agent receives:

1.from a non-U.S. holder that is classified as a corporation for U.S. federal income tax purposes or is an individual, and is eligible for the benefits of the portfolio interest exemption or an exemption (or reduced rate) based on a treaty, a duly completed and executed IRS Form W-8BEN (or any successor form);

2.from a non-U.S. holder that is eligible for an exemption on the basis that the holder’s income from the Offered Certificate is effectively connected to its U.S. trade or business, a duly completed and executed IRS Form W-8ECI (or any successor form);

3.from a non-U.S. holder that is classified as a partnership for U.S. federal income tax purposes, a duly completed and executed IRS Form W-8IMY (or any successor form) with all supporting documentation (as specified in the U.S. Treasury Regulations) required to substantiate exemptions from withholding on behalf of its partners; certain partnerships may enter into agreements with the IRS providing for different documentation requirements and it is recommended that such partnerships consult their tax advisors with respect to these certification rules;

4.from a non-U.S. holder that is an intermediary (i.e., a person acting as a custodian, a broker, nominee or otherwise as an agent for the beneficial owner of an Offered Certificate):

(a)if the intermediary is a “qualified intermediary” within the meaning of section 1.1441-1(e)(5)(ii) of the U.S. Treasury Regulations (a “qualified intermediary”), a duly completed and executed IRS Form W-8IMY (or any successor or substitute form)—

(i)stating the name, permanent residence address and qualified intermediary employer identification number of the qualified intermediary and the country under the laws of which the qualified intermediary is created, incorporated or governed,

(ii)certifying that the qualified intermediary has provided, or will provide, a withholding statement as required under section 1.1441-1(e)(5)(v) of the U.S. Treasury Regulations,

(iii)certifying that, with respect to accounts it identifies on its withholding statement, the qualified intermediary is not acting for its own account but is acting as a qualified intermediary, and

(iv)providing any other information, certifications, or statements that may be required by the IRS Form W-8IMY or accompanying instructions in addition to, or in lieu of, the information and certifications described in section 1.1441-1(e)(3)(ii) or 1.1441-1(e)(5)(v) of the U.S. Treasury Regulations; or

(b)if the intermediary is not a qualified intermediary (a “nonqualified intermediary”), a duly completed and executed IRS Form W-8IMY (or any successor or substitute form)—

(i)stating the name and permanent residence address of the nonqualified intermediary and the country under the laws of which the nonqualified intermediary is created, incorporated or governed,

(ii)certifying that the nonqualified intermediary is not acting for its own account,

(iii)certifying that the nonqualified intermediary has provided, or will provide, a withholding statement that is associated with the appropriate IRS Forms W-8 and W-9 required to substantiate exemptions from withholding on behalf of such nonqualified intermediary’s beneficial owners, and

(iv)providing any other information, certifications or statements that may be required by the IRS Form W-8IMY or accompanying instructions in addition to, or in lieu of, the information, certifications, and statements described in section 1.1441-1(e)(3)(iii) or (iv) of the U.S. Treasury Regulations; or

5.from a non-U.S. holder that is a trust, depending on whether the trust is classified for U.S. federal income tax purposes as the beneficial owner of the Offered Certificate, either an IRS Form W-8BEN or W-8IMY; any non-U.S. holder that is a trust should consult its tax advisors to determine which of these forms it should provide.

All non-U.S. holders will be required to update the above-listed forms and any supporting documentation in accordance with the requirements under the U.S. Treasury Regulations. These forms generally remain in effect for a period starting on the date the form is signed and ending on the last day of the third succeeding calendar year, unless a change in circumstances makes any information on the form incorrect. Under certain circumstances, an IRS Form W-8BEN, if furnished with a taxpayer identification number, remains in effect until the status of the beneficial owner changes, or a change in circumstances makes any information on the form incorrect.

In addition, all holders, including holders that are U.S. persons, holding book-entry certificates through Clearstream, société anonyme, Euroclear or DTC may be subject to backup withholding unless the holder—

(i)provides the appropriate IRS Form W-8 (or any successor or substitute form), duly completed and executed, if the holder is a non-U.S. holder;

(ii)provides a duly completed and executed IRS Form W-9, if the holder is a U.S. person; or

(iii)can be treated as an “exempt recipient” within the meaning of section 1.6049-4(c)(1)(ii) of the U.S. Treasury Regulations (e.g., a corporation or a financial institution such as a bank).

This summary does not deal with all of the aspects of U.S. federal income tax withholding or backup withholding that may be relevant to investors that are non-U.S. holders. Such holders are advised to consult their own tax advisors for specific tax advice concerning their holding and disposing of book-entry certificates.

ANNEX II

INTEREST RATE SWAP SCHEDULE

Distribution Dates	Notional Amount ($)	Multiplier
January 25, 2008	77,167,175.55	10
February 25, 2008	73,917,347.83	10
March 25, 2008	70,804,122.71	10
April 25, 2008	67,823,121.65	10
May 25, 2008	64,968,685.98	10
June 25, 2008	62,235,400.80	10
July 25, 2008	59,618,084.44	10
August 25, 2008	57,111,778.39	10
September 25, 2008	54,702,313.97	10
October 25, 2008	43,185,242.21	10
November 25, 2008	40,589,845.01	10
December 25, 2008	38,914,734.43	10
January 25, 2009	37,309,449.71	10
February 25, 2009	35,771,052.24	10
March 25, 2009	34,287,170.38	10
April 25, 2009	23,524,938.40	10
May 25, 2009	21,766,545.41	10
June 25, 2009	20,904,374.65	10
July 25, 2009	20,076,746.07	10
August 25, 2009	19,277,274.74	10
September 25, 2009	18,336,623.70	10
October 25, 2009	11,665,531.93	10
November 25, 2009	10,692,872.63	10
December 25, 2009	10,303,290.73	10
January 25, 2010	9,927,946.81	10
February 25, 2010	9,561,275.99	10
March 25, 2010	9,037,993.55	10
April 25, 2010	8,089,689.50	10
May 25, 2010	7,726,417.63	10
June 25, 2010	7,452,001.05	10
July 25, 2010	7,187,298.78	10
August 25, 2010	6,929,096.74	10
September 25, 2010	6,583,068.67	10
October 25, 2010	5,996,077.08	10
November 25, 2010	5,744,564.57	10
December 25, 2010	5,544,686.28	10
January 25, 2011	5,351,693.25	10
February 25, 2011	5,165,350.83	10
March 25, 2011	4,985,432.28	10
April 25, 2011	4,811,718.50	10
May 25, 2011	4,643,997.75	10
June 25, 2011	4,482,065.46	10
July 25, 2011	4,325,723.92	10
August 25, 2011	4,173,921.65	10
September 25, 2011	4,019,999.98	10
October 25, 2011	3,868,572.55	10
November 25, 2011	3,732,465.30	10
December 25, 2011	3,602,050.78	10
January 25, 2012	3,476,144.50	10
February 25, 2012	3,353,721.71	10
March 25, 2012	3,228,056.20	10
April 25, 2012	3,104,123.79	10
May 25, 2012	2,994,660.60	10
June 25, 2012	2,889,975.03	10
July 25, 2012	2,788,908.01	10
August 25, 2012	2,690,840.08	10
September 25, 2012	2,591,891.89	10
October 25, 2012	2,494,884.18	10
November 25, 2012	2,407,040.66	10
December 25, 2012	2,322,800.48	10
January 25, 2013	2,241,474.37	10
February 25, 2013 and thereafter	-	-

ANNEX III

INTEREST RATE CAP SCHEDULE

Distribution Dates	Notional Amount ($)	Multiplier
February 25, 2007	120,000,764.32	10
March 25, 2007	115,491,029.43	10
April 25, 2007	111,122,782.50	10
May 25, 2007	106,888,765.93	10
June 25, 2007	102,782,321.68	10
July 25, 2007	98,797,372.59	10
August 25, 2007	94,928,406.05	10
September 25, 2007	91,170,445.47	10
October 25, 2007	87,519,034.58	10
November 25, 2007	83,970,207.54	10
December 25, 2007	80,520,482.29	10
January 25, 2008 and thereafter	-	-

ANNEX IV

MORTGAGE LOAN TABLES

Aggregate Mortgage Loans

Product Types

Product Types	Number of Mortgage Loans		Aggregate Cut-off Date Principal Balance ($)		% of Mortgage Pool by Aggregate Cut-off Date Principal Balance			Weighted Average Gross Interest Rate (%)			Weighted Average Remaining Term (months)		Weighted Average Combined Original LTV (%)			Weighted Average FICO Score
Fixed - 10 Year		5	$	492,864		0.04	%		8.218	%		116		76.17	%		656
Fixed - 15 Year		56		4,938,122		0.40			8.315			176		64.50			617
Fixed - 20 Year		48		4,106,777		0.33			8.361			236		74.12			610
Fixed - 25 Year		6		596,415		0.05			8.257			296		76.34			608
Fixed - 30 Year		1,993		195,630,649		15.65			9.249			356		84.99			638
Balloon - 30/40		269		60,551,738		4.84			7.700			356		76.62			642
ARM - 2 Year/6 Month Balloon 30/40		1,728		427,078,999		34.17			8.305			356		80.06			611
ARM - 3 Year/6 Month Balloon 30/40		280		73,167,992		5.85			8.148			356		80.43			629
ARM - 2 Year/6 Month		1,170		204,740,714		16.38			8.684			356		81.02			609
ARM - 3 Year/6 Month		210		36,408,888		2.91			8.748			356		80.24			611
ARM - 5 Year/6 Month		12		2,683,805		0.21			8.246			356		82.98			638
Interest Only Fixed - 30 Year - 60 mo. IO term		41		13,133,095		1.05			7.278			355		80.14			653
Interest Only ARM - 2 Year/6 Month - 60 mo. IO term		629		205,877,729		16.47			7.701			356		81.74			649
Interest Only ARM - 3 Year/6 Month - 60 mo. IO term		48		14,444,309		1.16			7.683			356		79.58			650
Interest Only ARM - 5 Year/6 Month - 84 mo. IO term		19		6,155,866		0.49			7.134			355		78.56			664
Total/Weighted Average/ % of Mortgage Loan Pool:		6,514	$	1,250,007,962		100.00	%		8.366	%		355		81.04	%		625

Range of Gross Interest Rates

Range of Gross Interest Rates (%)	Number of Mortgage Loans		Aggregate Cut-off Date Principal Balance ($)		% of Mortgage Pool by Aggregate Cut-off Date Principal Balance			Weighted Average Gross Interest Rate (%)			Weighted Average Remaining Term (months)		Weighted Average Combined Original LTV (%)			Weighted Average FICO Score
5.000-5.999		34	$	11,647,088		0.93	%		5.772	%		356		78.80	%		662
6.000-6.999		579		168,342,837		13.47			6.691			354		77.25			651
7.000-7.999		1,534		394,634,712		31.57			7.571			355		78.95			637
8.000-8.999		1,671		347,487,380		27.80			8.507			356		80.54			619
9.000-9.999		1,165		192,744,040		15.42			9.484			355		83.20			595
10.000-10.999		625		74,521,492		5.96			10.438			354		86.14			601
11.000-11.999		537		40,628,608		3.25			11.457			355		93.74			628
12.000-12.999		321		17,950,523		1.44			12.305			355		98.63			629
13.000-13.999		43		1,872,761		0.15			13.356			350		95.71			613
14.000-14.999		5		178,521		0.01			14.222			354		100.00			598
Total/Weighted Average/ % of Mortgage Loan Pool:		6,514	$	1,250,007,962		100.00	%		8.366	%		355		81.04	%		625

Minimum: 5.575%

Maximum: 14.700%

Weighted Average: 8.366%

Range of Cut-off Date Principal Balances

Range of Cut-off Date Principal Balances ($)	Number of Mortgage Loans		Aggregate Cut-off Date Principal Balance ($)		% of Mortgage Pool by Aggregate Cut-off Date Principal Balance			Weighted Average Gross Interest Rate (%)			Weighted Average Remaining Term (months)		Weighted Average Combined Original LTV (%)			Weighted Average FICO Score
1-25,000		204	$	4,250,916		0.34	%		11.361	%		349		99.88	%		622
25,001-50,000		476		18,475,079		1.48			10.965			352		95.17			636
50,001-75,000		672		42,150,040		3.37			10.097			346		86.13			622
75,001-100,000		706		61,840,562		4.95			9.411			350		82.02			615
100,001-125,000		638		72,025,211		5.76			9.120			353		81.71			617
125,001-150,000		522		71,869,312		5.75			8.774			355		80.07			614
150,001-175,000		428		69,392,775		5.55			8.615			354		79.49			612
175,001-200,000		430		80,748,319		6.46			8.462			355		78.77			615
200,001-225,000		376		79,990,401		6.40			8.280			356		78.54			603
225,001-250,000		297		70,490,322		5.64			8.160			356		78.88			613
250,001-275,000		264		69,161,668		5.53			8.224			356		80.50			624
275,001-300,000		248		71,272,003		5.70			8.096			356		80.10			620
300,001-325,000		192		60,083,233		4.81			8.098			356		80.70			631
325,001-350,000		135		45,655,491		3.65			8.112			356		81.73			627
350,001-375,000		150		54,086,266		4.33			7.898			356		81.17			625
375,001-400,000		135		52,366,027		4.19			7.885			356		80.29			640
400,001-425,000		117		48,333,985		3.87			7.725			356		81.67			629
425,001-450,000		110		48,147,980		3.85			7.730			356		82.00			636
450,001-475,000		62		28,695,538		2.30			7.557			356		79.05			631
475,001-500,000		101		49,357,592		3.95			7.937			356		79.65			643
500,001-750,000		236		138,813,305		11.10			7.884			355		82.68			651
750,001-1,000,000		15		12,801,937		1.02			7.937			356		80.40			632
Total/Weighted Average/ % of Mortgage Loan Pool:		6,514	$	1,250,007,962		100.00	%		8.366	%		355		81.04	%		625

Minimum: $14,901

Maximum: $970,000

Average: $191,896

Stated Original Term

Stated Original Term (months)	Number of Mortgage Loans		Aggregate Cut-off Date Principal Balance ($)		% of Mortgage Pool by Aggregate Cut-off Date Principal Balance			Weighted Average Gross Interest Rate (%)			Weighted Average Remaining Term (months)		Weighted Average Combined Original LTV (%)			Weighted Average FICO Score
120		5	$	492,864		0.04	%		8.218	%		116		76.17	%		656
180		56		4,938,122		0.40			8.315			176		64.50			617
240		48		4,106,777		0.33			8.361			236		74.12			610
300		6		596,415		0.05			8.257			296		76.34			608
360		6,399		1,239,873,783		99.19			8.366			356		81.13			625
Total/Weighted Average/ % of Mortgage Loan Pool:		6,514	$	1,250,007,962		100.00	%		8.366	%		355		81.04	%		625

Minimum: 120 months

Maximum: 360 months

Weighted Average: 359 months

Range of Stated Remaining Terms

Range of Stated Remaining Terms (months)	Number of Mortgage Loans		Aggregate Cut-off Date Principal Balance ($)		% of Mortgage Pool by Aggregate Cut-off Date Principal Balance			Weighted Average Gross Interest Rate (%)			Weighted Average Remaining Term (months)		Weighted Average Combined Original LTV (%)			Weighted Average FICO Score
109-120		5	$	492,864		0.04	%		8.218	%		116		76.17	%		656
169-180		56		4,938,122		0.40			8.315			176		64.50			617
229-240		48		4,106,777		0.33			8.361			236		74.12			610
289-300		6		596,415		0.05			8.257			296		76.34			608
337-348		1		20,220		0.00			8.160			347		100.00			575
349-360		6,398		1,239,853,563		99.19			8.366			356		81.13			625
Total/Weighted Average/ % of Mortgage Loan Pool:		6,514	$	1,250,007,962		100.00	%		8.366	%		355		81.04	%		625

Minimum: 115 months

Maximum: 357 months

Weighted Average: 355 months

Range of Combined Original LTV Ratios

Range of Combined Original LTV Ratios (%)	Number of Mortgage Loans		Aggregate Cut-off Date Principal Balance ($)		% of Mortgage Pool by Aggregate Cut-off Date Principal Balance			Weighted Average Gross Interest Rate (%)			Weighted Average Remaining Term (months)		Weighted Average Combined Original LTV (%)			Weighted Average FICO Score
Less than or equal to 10.00		1	$	49,880		0.00	%		8.600	%		356		7.69	%		683
10.01-15.00		1		49,926		0.00			7.125			356		11.06			744
15.01-20.00		6		589,494		0.05			8.521			307		19.27			595
20.01-25.00		10		964,085		0.08			8.682			356		23.80			591
25.01-30.00		13		1,522,862		0.12			7.723			346		27.71			630
30.01-35.00		18		3,019,297		0.24			7.946			316		32.97			626
35.01-40.00		37		4,783,549		0.38			8.127			346		37.70			604
40.01-45.00		45		7,518,444		0.60			7.798			355		42.62			603
45.01-50.00		68		11,804,982		0.94			8.002			352		47.76			593
50.01-55.00		94		15,625,523		1.25			7.857			352		52.81			592
55.01-60.00		138		26,948,941		2.16			7.756			356		58.14			602
60.01-65.00		198		42,077,356		3.37			7.946			353		63.27			593
65.01-70.00		260		55,974,044		4.48			8.210			355		68.84			587
70.01-75.00		435		90,777,230		7.26			8.250			354		74.00			590
75.01-80.00		1,979		459,784,355		36.78			7.981			355		79.77			641
80.01-85.00		688		155,384,854		12.43			8.361			356		84.35			599
85.01-90.00		934		213,331,782		17.07			8.547			356		89.67			627
90.01-95.00		367		84,667,093		6.77			8.336			355		94.56			652
95.01-100.00		1,222		75,134,266		6.01			11.223			355		99.95			655
Total/Weighted Average/ % of Mortgage Loan Pool:		6,514	$	1,250,007,962		100.00	%		8.366	%		355		81.04	%		625

Minimum: 7.69%

Maximum: 100.00%

Weighted Average: 81.04%

Range of Gross Margins

Range of Gross Margins (%)	Number of Mortgage Loans		Aggregate Cut-off Date Principal Balance ($)		% of Mortgage Pool by Aggregate Cut-off Date Principal Balance			Weighted Average Gross Interest Rate (%)			Weighted Average Remaining Term (months)		Weighted Average Combined Original LTV (%)			Weighted Average FICO Score
Fixed Rate Loans		2,418	$	279,449,661		22.36	%		8.787	%		350		82.40	%		639
4.501-5.000		4		364,613		0.03			9.334			356		70.05			594
5.001-5.500		13		2,415,472		0.19			8.885			356		78.23			621
5.501-6.000		824		208,186,604		16.65			7.881			356		81.61			637
6.001-6.500		2,752		649,587,148		51.97			8.221			356		81.19			624
6.501-7.000		348		79,470,281		6.36			8.906			356		77.95			585
7.001-7.500		143		28,146,221		2.25			9.442			356		69.60			554
7.501-8.000		12		2,387,962		0.19			9.493			356		71.74			543
Total/Weighted Average/ % of Mortgage Loan Pool:		6,514	$	1,250,007,962		100.00	%		8.366	%		355		81.04	%		625

Non-Zero Minimum: 5.000%

Maximum: 7.675%

Non-Zero Weighted Average: 6.203%

Range of Minimum Mortgage Rates

Range of Minimum Mortgage Rates (%)	Number of Mortgage Loans		Aggregate Cut-off Date Principal Balance ($)		% of Mortgage Pool by Aggregate Cut-off Date Principal Balance			Weighted Average Gross Interest Rate (%)			Weighted Average Remaining Term (months)		Weighted Average Combined Original LTV (%)			Weighted Average FICO Score
Fixed Rate Loans		2,418	$	279,449,661		22.36	%		8.787	%		350		82.40	%		639
5.501-6.000		37		12,548,265		1.00			5.789			356		78.90			659
6.001-6.500		86		27,746,653		2.22			6.311			356		77.82			659
6.501-7.000		283		88,049,226		7.04			6.826			356		79.01			641
7.001-7.500		443		128,660,027		10.29			7.306			356		79.54			638
7.501-8.000		753		198,248,723		15.86			7.779			356		80.18			634
8.001-8.500		611		149,941,482		12.00			8.287			356		80.01			625
8.501-9.000		669		146,200,682		11.70			8.774			356		81.42			611
9.001-9.500		445		85,480,148		6.84			9.274			356		82.52			598
9.501-10.000		392		75,411,979		6.03			9.765			356		83.44			584
10.001 -10.500		199		34,086,481		2.73			10.263			356		83.31			584
10.501-11.000		106		14,660,440		1.17			10.744			356		82.76			584
11.001-11.500		45		6,679,435		0.53			11.214			356		78.23			555
11.501-12.000		18		1,908,648		0.15			11.760			356		77.48			559
12.001-12.500		5		607,109		0.05			12.187			355		73.26			517
12.501-13.000		2		121,122		0.01			12.678			356		58.79			509
13.501-14.000		2		207,881		0.02			13.845			357		65.00			524
Total/Weighted Average/ % of Mortgage Loan Pool:		6,514	$	1,250,007,962		100.00	%		8.366	%		355		81.04	%		625

Non-Zero Minimum: 5.575%

Maximum: 13.950%

Non-Zero Weighted Average: 8.244%

Range of Maximum Mortgage Rates

Range of Maximum Mortgage Rates (%)	Number of Mortgage Loans		Aggregate Cut-off Date Principal Balance ($)		% of Mortgage Pool by Aggregate Cut-off Date Principal Balance			Weighted Average Gross Interest Rate (%)			Weighted Average Remaining Term (months)		Weighted Average Combined Original LTV (%)			Weighted Average FICO Score
Fixed Rate Loans		2,418	$	279,449,661		22.36	%		8.787	%		350		82.40	%		639
12.501-13.000		38		12,783,581		1.02			5.811			356		78.73			658
13.001-13.500		87		27,892,313		2.23			6.316			356		77.89			659
13.501-14.000		287		89,554,781		7.16			6.843			356		79.08			641
14.001-14.500		447		129,289,147		10.34			7.312			356		79.51			638
14.501-15.000		753		197,184,662		15.77			7.783			356		80.15			634
15.001-15.500		612		150,282,670		12.02			8.295			356		80.06			624
15.501-16.000		665		145,722,751		11.66			8.777			356		81.46			612
16.001-16.500		440		84,503,680		6.76			9.275			356		82.51			599
16.501-17.000		391		75,213,101		6.02			9.762			356		83.43			584
17.001-17.500		199		34,034,576		2.72			10.265			356		83.23			584
17.501-18.000		106		14,660,440		1.17			10.744			356		82.76			584
18.001-18.500		45		6,666,133		0.53			11.225			356		78.42			555
18.501-19.000		18		1,908,648		0.15			11.760			356		77.48			559
19.001-19.500		4		532,816		0.04			12.207			355		72.33			517
19.501-20.000		2		121,122		0.01			12.678			356		58.79			509
20.501-21.000		2		207,881		0.02			13.845			357		65.00			524
Total/Weighted Average/ % of Mortgage Loan Pool:		6,514	$	1,250,007,962		100.00	%		8.366	%		355		81.04	%		625

Non-Zero Minimum: 12.575%

Maximum: 20.950%

Non-Zero Weighted Average: 15.239%

Initial Periodic Cap

Initial Periodic Cap (%)	Number of Mortgage Loans		Aggregate Cut-off Date Principal Balance ($)		% of Mortgage Pool by Aggregate Cut-off Date Principal Balance			Weighted Average Gross Interest Rate (%)			Weighted Average Remaining Term (months)		Weighted Average Combined Original LTV (%)			Weighted Average FICO Score
Fixed Rate Loans		2,418	$	279,449,661		22.36	%		8.787	%		350		82.40	%		639
1.000		19		3,099,694		0.25			8.711			356		81.91			608
1.500		68		14,710,789		1.18			8.740			353		81.96			617
2.000		4,009		952,747,818		76.22			8.235			356		80.62			621
Total/Weighted Average/ % of Mortgage Loan Pool:		6,514	$	1,250,007,962		100.00	%		8.366	%		355		81.04	%		625

Non-Zero Minimum: 1.000%

Maximum: 2.000%

Non-Zero Weighted Average: 1.989%

Subsequent Periodic Cap

Subsequent Periodic Cap (%)	Number of Mortgage Loans		Aggregate Cut-off Date Principal Balance ($)		% of Mortgage Pool by Aggregate Cut-off Date Principal Balance			Weighted Average Gross Interest Rate (%)			Weighted Average Remaining Term (months)		Weighted Average Combined Original LTV (%)			Weighted Average FICO Score
Fixed Rate Loans		2,418	$	279,449,661		22.36	%		8.787	%		350		82.40	%		639
1.000		23		3,926,313		0.31			8.955			356		84.63			598
1.500		4,073		966,631,988		77.33			8.242			356		80.63			621
Total/Weighted Average/ % of Mortgage Loan Pool:		6,514	$	1,250,007,962		100.00	%		8.366	%		355		81.04	%		625

Non-Zero Minimum: 1.000%

Maximum: 1.500%

Non-Zero Weighted Average: 1.498%

Months to Next Rate Adjustment

Months to Next Rate Adjustment (months)	Number of Mortgage Loans		Aggregate Cut-off Date Principal Balance ($)		% of Mortgage Pool by Aggregate Cut-off Date Principal Balance			Weighted Average Gross Interest Rate (%)			Weighted Average Remaining Term (months)		Weighted Average Combined Original LTV (%)			Weighted Average FICO Score
Fixed Rate Loans		2,418	$	279,449,661		22.36	%		8.787	%		350		82.40	%		639
14		4		1,029,707		0.08			8.578			350		81.36			694
15		5		832,357		0.07			8.543			351		73.14			589
16		11		2,339,135		0.19			8.889			352		83.31			616
17		33		7,442,220		0.60			8.615			353		79.83			609
18		57		10,990,907		0.88			8.886			354		81.98			605
19		109		27,100,229		2.17			8.587			355		84.04			607
20		1,566		389,216,870		31.14			8.163			356		80.52			623
21		1,742		398,746,017		31.90			8.281			357		80.64			619
25		1		53,616		0.00			8.350			349		88.52			639
27		1		144,947		0.01			8.300			351		76.47			575
29		3		933,882		0.07			8.841			353		80.86			676
30		54		12,432,918		0.99			8.373			354		85.62			611
31		112		23,511,943		1.88			8.398			355		83.45			628
32		235		54,958,672		4.40			8.242			356		78.69			621
33		132		31,985,212		2.56			8.167			357		78.59			638
51		1		102,400		0.01			7.400			351		80.00			614
52		1		324,314		0.03			7.150			352		72.97			635
54		4		846,997		0.07			6.868			354		78.86			639
55		5		1,941,967		0.16			7.014			355		87.42			679
56		13		3,578,130		0.29			7.799			356		78.02			650
57		7		2,045,862		0.16			7.637			357		77.58			655
Total/Weighted Average/ % of Mortgage Loan Pool:		6,514	$	1,250,007,962		100.00	%		8.366	%		355		81.04	%		625

Non-Zero Minimum: 14 months

Maximum: 57 months

Non-Zero Weighted Average: 22 months

Geographic Distribution of Mortgaged Properties

Geographic Distribution of Mortgaged Properties	Number of Mortgage Loans		Aggregate Cut-off Date Principal Balance ($)		% of Mortgage Pool by Aggregate Cut-off Date Principal Balance			Weighted Average Gross Interest Rate (%)			Weighted Average Remaining Term (months)		Weighted Average Combined Original LTV (%)			Weighted Average FICO Score
California		1,395	$	410,133,065		32.81	%		8.057	%		356		80.33	%		637
Florida		729		124,872,734		9.99			8.500			356		79.06			617
New York		297		84,685,871		6.77			8.027			356		79.77			644
Texas		585		62,144,290		4.97			8.686			345		81.22			615
New Jersey		251		60,053,032		4.80			8.516			356		79.47			622
Arizona		254		46,480,487		3.72			8.247			355		81.31			619
Maryland		177		39,610,098		3.17			8.280			356		80.36			609
Illinois		222		36,175,765		2.89			8.494			355		81.73			620
Washington		151		31,232,053		2.50			8.298			356		82.81			610
Georgia		207		28,769,992		2.30			8.962			353		84.29			618
Virginia		139		28,264,572		2.26			8.623			355		80.18			594
Massachusetts		114		26,189,029		2.10			8.674			356		83.63			630
Nevada		132		24,807,507		1.98			8.437			356		81.35			624
Hawaii		80		24,763,337		1.98			7.597			355		80.08			657
Pennsylvania		195		21,411,431		1.71			8.717			354		81.50			610
Other		1,586		200,414,699		16.03			8.833			355		83.69			611
Total/Weighted Average/ % of Mortgage Loan Pool:		6,514	$	1,250,007,962		100.00	%		8.366	%		355		81.04	%		625

Number of States/District of Columbia Represented: 51

Occupancy

Occupancy	Number of Mortgage Loans		Aggregate Cut-off Date Principal Balance ($)		% of Mortgage Pool by Aggregate Cut-off Date Principal Balance			Weighted Average Gross Interest Rate (%)			Weighted Average Remaining Term (months)		Weighted Average Combined Original LTV (%)			Weighted Average FICO Score
Primary		5,815	$	1,133,535,839		90.68	%		8.294	%		355		80.87	%		622
Investment		464		81,598,015		6.53			9.192			356		82.57			652
Second Home		235		34,874,108		2.79			8.766			356		82.92			669
Total/Weighted Average/ % of Mortgage Loan Pool:		6,514	$	1,250,007,962		100.00	%		8.366	%		355		81.04	%		625

Property Type

Property Type	Number of Mortgage Loans		Aggregate Cut-off Date Principal Balance ($)		% of Mortgage Pool by Aggregate Cut-off Date Principal Balance			Weighted Average Gross Interest Rate (%)			Weighted Average Remaining Term (months)		Weighted Average Combined Original LTV (%)			Weighted Average FICO Score
Single Family Residence		4,862	$	911,845,734		72.95	%		8.349	%		355		81.01	%		622
Planned Unit Development		876		170,217,342		13.62			8.386			355		81.94			624
2-4 Family		371		98,399,882		7.87			8.360			355		80.26			647
Condominium		405		69,545,003		5.56			8.543			355		80.26			639
Total/Weighted Average/ % of Mortgage Loan Pool:		6,514	$	1,250,007,962		100.00	%		8.366	%		355		81.04	%		625

Loan Purpose

Loan Purpose	Number of Mortgage Loans		Aggregate Cut-off Date Principal Balance ($)		% of Mortgage Pool by Aggregate Cut-off Date Principal Balance			Weighted Average Gross Interest Rate (%)			Weighted Average Remaining Term (months)		Weighted Average Combined Original LTV (%)			Weighted Average FICO Score
Refinance-Cashout		3,156	$	659,502,741		52.76	%		8.238	%		354		78.30	%		605
Purchase		2,758		466,351,166		37.31			8.634			356		84.78			654
Refinance-Rate Term		600		124,154,054		9.93			8.037			354		81.48			621
Total/Weighted Average/ % of Mortgage Loan Pool:		6,514	$	1,250,007,962		100.00	%		8.366	%		355		81.04	%		625

Documentation Level

Documentation Level	Number of Mortgage Loans		Aggregate Cut-off Date Principal Balance ($)		% of Mortgage Pool by Aggregate Cut-off Date Principal Balance			Weighted Average Gross Interest Rate (%)			Weighted Average Remaining Term (months)		Weighted Average Combined Original LTV (%)			Weighted Average FICO Score
Full Documentation		3,995	$	704,304,408		56.34	%		8.071	%		355		80.65	%		612
Stated Documentation		2,442		529,960,233		42.40			8.758			356		81.51			643
Limited Documentation		77		15,743,321		1.26			8.333			355		82.46			621
Total/Weighted Average/ % of Mortgage Loan Pool:		6,514	$	1,250,007,962		100.00	%		8.366	%		355		81.04	%		625

Range of Credit Scores

Range of Credit Scores	Number of Mortgage Loans		Aggregate Cut-off Date Principal Balance ($)		% of Mortgage Pool by Aggregate Cut-off Date Principal Balance			Weighted Average Gross Interest Rate (%)			Weighted Average Remaining Term (months)		Weighted Average Combined Original LTV (%)			Weighted Average FICO Score
500-524		397	$	67,993,814		5.44	%		9.429	%		355		74.13	%		513
525-549		400		71,193,312		5.70			8.913			355		75.31			537
550-574		595		117,460,390		9.40			8.748			355		77.98			561
575-599		737		139,117,171		11.13			8.441			355		78.79			588
600-624		1,235		218,202,502		17.46			8.249			355		81.82			612
625-649		1,218		231,250,505		18.50			8.165			355		82.90			637
650-674		898		173,310,918		13.86			8.289			355		83.76			661
675-699		459		98,140,949		7.85			8.116			354		82.76			685
700-724		261		62,521,190		5.00			7.858			355		83.94			711
725-749		160		35,135,234		2.81			8.016			355		82.96			735
750-774		103		22,827,872		1.83			8.199			354		84.41			760
775-799		41		10,871,468		0.87			7.652			356		80.32			783
800 +		10		1,982,636		0.16			7.749			356		75.63			803
Total/Weighted Average/ % of Mortgage Loan Pool:		6,514	$	1,250,007,962		100.00	%		8.366	%		355		81.04	%		625

Non-Zero Minimum: 500

Maximum: 816

Non-Zero Weighted Average: 625

Original Prepayment Penalty Term

Original Prepayment Penalty Term (months)	Number of Mortgage Loans		Aggregate Cut-off Date Principal Balance ($)		% of Mortgage Pool by Aggregate Cut-off Date Principal Balance			Weighted Average Gross Interest Rate (%)			Weighted Average Remaining Term (months)		Weighted Average Combined Original LTV (%)			Weighted Average FICO Score
0		1,946	$	328,355,391		26.27	%		8.934	%		354		81.87	%		622
12		329		100,502,705		8.04			8.153			356		80.50			644
24		3,008		612,318,986		48.99			8.218			356		81.56			621
36		1,231		208,830,880		16.71			8.008			353		78.45			632
Total/Weighted Average/ % of Mortgage Loan Pool:		6,514	$	1,250,007,962		100.00	%		8.366	%		355		81.04	%		625

Non-Zero Minimum: 12 months

Maximum: 36 months

Non-Zero Weighted Average: 25 months

Lien Position

Lien Position	Number of Mortgage Loans		Aggregate Cut-off Date Principal Balance ($)		% of Mortgage Pool by Aggregate Cut-off Date Principal Balance			Weighted Average Gross Interest Rate (%)			Weighted Average Remaining Term (months)		Weighted Average Combined Original LTV (%)			Weighted Average FICO Score
1st Lien		5,287	$	1,177,505,567		94.20	%		8.185	%		355		79.87	%		623
2nd Lien		1,227		72,502,395		5.80			11.303			355		99.90			656
Total/Weighted Average/ % of Mortgage Loan Pool:		6,514	$	1,250,007,962		100.00	%		8.366	%		355		81.04	%		625

Original Interest Only Term

Original Interest Only Term (months)	Number of Mortgage Loans		Aggregate Cut-off Date Principal Balance ($)		% of Mortgage Pool by Aggregate Cut-off Date Principal Balance			Weighted Average Gross Interest Rate (%)			Weighted Average Remaining Term (months)		Weighted Average Combined Original LTV (%)			Weighted Average FICO Score
0		5,777	$	1,010,396,963		80.83	%		8.533	%		355		80.94	%		619
60		718		233,455,133		18.68			7.676			356		81.52			649
84		19		6,155,866		0.49			7.134			355		78.56			664
Total/Weighted Average/ % of Mortgage Loan Pool:		6,514	$	1,250,007,962		100.00	%		8.366	%		355		81.04	%		625

Product Types

Product Types	Number of Mortgage Loans		Aggregate Cut-off Date Principal Balance ($)		% of Mortgage Pool by Aggregate Cut-off Date Principal Balance			Weighted Average Gross Interest Rate (%)			Weighted Average Remaining Term (months)		Weighted Average Combined Original LTV (%)			Weighted Average FICO Score
Fixed - 10 Year		2	$	126,062.00		0.03	%		9.085	%		116		81.54	%		621
Fixed - 15 Year		24		1,944,809.00		0.47			8.588			176		64.57			604
Fixed - 20 Year		22		1,819,219.00		0.44			8.197			236		73.60			627
Fixed - 25 Year		5		529,920.00		0.13			8.207			296		74.75			612
Fixed - 30 Year		716		64,425,334.00		15.58			8.788			356		79.62			628
Balloon - 30/40		115		23,041,309.00		5.57			7.719			356		74.32			642
ARM - 2 Year/6 Month Balloon 30/40		669		152,964,078.00		36.98			8.525			356		78.70			607
ARM - 3 Year/6 Month Balloon 30/40		80		18,545,252.00		4.48			8.387			356		76.87			624
ARM - 2 Year/6 Month		391		63,830,062.00		15.43			8.964			356		80.18			622
ARM - 3 Year/6 Month		60		10,793,263.00		2.61			9.002			356		80.19			621
Interest Only ARM - 2 Year/6 Month - 60 mo. IO term		289		69,518,276.00		16.81			7.739			356		81.96			637
Interest Only ARM - 3 Year/6 Month - 60 mo. IO term		26		6,087,077.00		1.47			7.503			356		76.30			642
Total/Weighted Average/ % of Mortgage Loan Pool:		2,399	$	413,624,662.00		100.00	%		8.447	%		355		79.20	%		621

Range of Gross Interest Rates

Range of Gross Interest Rates (%)	Number of Mortgage Loans		Aggregate Cut-off Date Principal Balance ($)		% of Mortgage Pool by Aggregate Cut-off Date Principal Balance			Weighted Average Gross Interest Rate (%)			Weighted Average Remaining Term (months)		Weighted Average Combined Original LTV (%)			Weighted Average FICO Score
5.000-5.999		11	$	3,607,797.00		0.87	%		5.818	%		356		75.75	%		659
6.000-6.999		216		54,579,611.00		13.20			6.656			354		73.44			647
7.000-7.999		515		112,949,971.00		27.31			7.584			354		75.92			629
8.000-8.999		637		119,359,765.00		28.86			8.528			355		80.08			621
9.000-9.999		453		75,873,388.00		18.34			9.507			355		82.50			603
10.000-10.999		264		30,880,943.00		7.47			10.414			353		85.24			605
11.000-11.999		160		11,583,888.00		2.80			11.395			353		85.24			584
12.000-12.999		121		4,021,808.00		0.97			12.326			352		98.73			611
13.000-13.999		19		699,374.00		0.17			13.526			350		89.42			588
14.000-14.999		3		68,117.00		0.02			14.345			353		100.00			588
Total/Weighted Average/ % of Mortgage Loan Pool:		2,399	$	413,624,662.00		100.00	%		8.447	%		355		79.20	%		621

Minimum: 5.625%

Maximum: 14.700%

Weighted Average: 8.447%

Range of Cut-off Date Principal Balances

Range of Cut-off Date Principal Balances ($)	Number of Mortgage Loans		Aggregate Cut-off Date Principal Balance ($)		% of Mortgage Pool by Aggregate Cut-off Date Principal Balance			Weighted Average Gross Interest Rate (%)			Weighted Average Remaining Term (months)		Weighted Average Combined Original LTV (%)			Weighted Average FICO Score
1-25,000		144	$	2,997,741.00		0.72	%		11.288	%		347		99.83	%		623
25,001-50,000		179		6,746,228.00		1.63			11.081			353		96.48			630
50,001-75,000		204		12,666,820.00		3.06			10.120			342		83.20			620
75,001-100,000		245		21,487,593.00		5.19			9.058			347		78.12			617
100,001-125,000		218		24,572,585.00		5.94			8.739			354		78.86			622
125,001-150,000		200		27,640,160.00		6.68			8.589			356		76.98			618
150,001-175,000		168		27,337,962.00		6.61			8.606			353		77.35			622
175,001-200,000		185		34,847,696.00		8.42			8.578			355		76.89			621
200,001-225,000		140		29,815,320.00		7.21			8.371			356		76.55			606
225,001-250,000		118		28,003,537.00		6.77			8.126			356		77.01			617
250,001-275,000		110		28,771,429.00		6.96			8.251			355		79.12			626
275,001-300,000		126		36,243,897.00		8.76			8.276			356		78.72			616
300,001-325,000		82		25,720,053.00		6.22			8.243			356		79.52			628
325,001-350,000		59		19,956,782.00		4.82			8.206			356		81.82			633
350,001-375,000		87		31,370,562.00		7.58			7.910			356		79.97			619
375,001-400,000		67		26,027,933.00		6.29			7.812			356		78.84			625
400,001-425,000		42		17,201,093.00		4.16			8.043			356		82.44			626
425,001-450,000		6		2,647,157.00		0.64			7.896			355		81.39			611
450,001-475,000		6		2,804,575.00		0.68			7.138			356		75.68			624
475,001-500,000		4		1,957,415.00		0.47			8.332			356		78.87			612
500,001-750,000		9		4,808,122.00		1.16			8.046			356		85.57			670
Total/Weighted Average/ % of Mortgage Loan Pool:		2,399	$	413,624,662.00		100.00	%		8.447	%		355		79.20	%		621

Minimum: $14,901

Maximum: $588,602

Average: $172,415

Stated Original Term

Stated Original Term (months)	Number of Mortgage Loans		Aggregate Cut-off Date Principal Balance ($)		% of Mortgage Pool by Aggregate Cut-off Date Principal Balance			Weighted Average Gross Interest Rate (%)			Weighted Average Remaining Term (months)		Weighted Average Combined Original LTV (%)			Weighted Average FICO Score
120		2	$	126,062.00		0.03	%		9.085	%		116		81.54	%		621
180		24		1,944,809.00		0.47			8.588			176		64.57			604
240		22		1,819,219.00		0.44			8.197			236		73.60			627
300		5		529,920.00		0.13			8.207			296		74.75			612
360		2,346		409,204,652.00		98.93			8.447			356		79.30			621
Total/Weighted Average/ % of Mortgage Loan Pool:		2,399	$	413,624,662.00		100.00	%		8.447	%		355		79.20	%		621

Minimum: 120 months

Maximum: 360 months

Weighted Average: 358 months

Range of Stated Remaining Terms

Range of Stated Remaining Terms (months)	Number of Mortgage Loans		Aggregate Cut-off Date Principal Balance ($)		% of Mortgage Pool by Aggregate Cut-off Date Principal Balance			Weighted Average Gross Interest Rate (%)			Weighted Average Remaining Term (months)		Weighted Average Combined Original LTV (%)			Weighted Average FICO Score
109-120		2	$	126,062.00		0.03	%		9.085	%		116		81.54	%		621
169-180		24		1,944,809.00		0.47			8.588			176		64.57			604
229-240		22		1,819,219.00		0.44			8.197			236		73.60			627
289-300		5		529,920.00		0.13			8.207			296		74.75			612
337-348		1		20,220.00		0.00			8.160			347		100.00			575
349-360		2,345		409,184,431.00		98.93			8.447			356		79.30			621
Total/Weighted Average/ % of Mortgage Loan Pool:		2,399	$	413,624,662.00		100.00	%		8.447	%		355		79.20	%		621

Minimum: 115 months

Maximum: 357 months

Weighted Average: 355 months

Range of Combined Original LTV Ratios

Range of Combined Original LTV Ratios (%)	Number of Mortgage Loans		Aggregate Cut-off Date Principal Balance ($)		% of Mortgage Pool by Aggregate Cut-off Date Principal Balance			Weighted Average Gross Interest Rate (%)			Weighted Average Remaining Term (months)		Weighted Average Combined Original LTV (%)			Weighted Average FICO Score
15.01-20.00		6	$	589,494.00		0.14	%		8.521	%		307		19.27	%		595
20.01-25.00		4		532,541.00		0.13			8.944			356		24.67			588
25.01-30.00		9		1,186,507.00		0.29			7.483			348		27.68			647
30.01-35.00		8		1,315,114.00		0.32			8.143			356		33.73			630
35.01-40.00		14		2,066,049.00		0.50			7.485			337		37.72			622
40.01-45.00		23		4,360,896.00		1.05			7.785			356		42.46			613
45.01-50.00		39		7,001,747.00		1.69			7.908			352		47.39			593
50.01-55.00		45		7,365,007.00