10-K 1 ace06he1_10k-2006.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark one) /X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2006 OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 333-123741-17 ACE Securities Corp. Home Equity Loan Trust, Series 2006-HE1 (exact name of issuing entity as specified in its charter) ACE Securities Corp. (exact name of the depositor (as registrant on behalf of the issuing entity) as specified in its charter) DB Structured Products, Inc. (exact name of the sponsor as specified in its charter) Delaware 06-1442101 (State or other jurisdiction of Depositor incorporation or organization) (I.R.S. Employer Identification No.) ACE Securities Corp. 6525 Morrison Boulevard Suite 318 Charlotte, NC 28211 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (704) 365-0569 Securities registered pursuant to Section 12(b) of the Act: NONE. Securities registered pursuant to Section 12(g) of the Act: NONE. This report omits to disclose the Attestation Report of Fremont Investment & Loan required by Rule 15d-18 of the Securities Exchange Act of 1934, as amended. Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ___ No X Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ___ No X Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ___ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K ( 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Not applicable. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer ___ Accelerated filer ___ Non-accelerated filer X Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ___ No X State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter. Not applicable. Documents Incorporated by Reference List hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated: (1)Any annual report to security holders; (2) Any proxy or information statement; and (3)Any prospectus filed pursuant to Rule 424(b) or (c) under the Securities Act of 1933. The listed documents should be clearly described for identification purposes (e.g., annual report to security holders for fiscal year ended December 24, 1980). Not applicable. PART I Item 1. Business. Omitted. Item 1A. Risk Factors. Omitted. Item 1B. Unresolved Staff Comments. None. Item 2. Properties. Omitted. Item 3. Legal Proceedings. Omitted. Item 4. Submission of Matters to a Vote of Security Holders. Omitted. PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Omitted. Item 6. Selected Financial Data. Omitted. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. Omitted. Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Omitted. Item 8. Financial Statements and Supplementary Data. Omitted. Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. Omitted. Item 9A. Controls and Procedures. Omitted. Item 9A(T). Controls and Procedures. Omitted. Item 9B. Other Information. None. PART III Item 10. Directors, Executive Officers and Corporate Governance. Omitted. Item 11. Executive Compensation. Omitted. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. Omitted. Item 13. Certain Relationships and Related Transactions, and Director Independence. Omitted. Item 14. Principal Accounting Fees and Services. Omitted. ADDITIONAL DISCLOSURE ITEMS PURSUANT TO GENERAL INSTRUCTION J Item 1112(b) of Regulation AB, Significant Obligor Financial Information. None. Item 1114(b)(2) of Regulation AB, Credit Enhancement and Other Support, except for certain Derivative Instruments (Information regarding Significant Enhancement Providers Financial Information). CIFG Assurance North America, Inc., insurer of the Class A-1B2 Certificates. Financial Statements December 31, 2006, 2005 and 2004 (page) CIFG Assurance North America, Inc. Table of Contents Report of Independent Auditors 2 Balance Sheets as of December 31, 2006 and 2005 3 Statements of Operations for the years ended December 31, 2006, 4 2005 and 2004 Statements of Changes in Shareholders Equity and Comprehensive (Loss) Income for the years ended December 31, 2006, 2005 and 2004 5 Statements of Cash Flows for the years ended December 31, 2006, 6 2005 and 2004 Notes to Financial Statements 7-26 (page) (logo) PRICEWATERHOUSECOOPERS PricewaterhouseCoopers LLP PricewaterhouseCoopers Center 300 Madison Avenue New York NY 10017 Telephone (646) 471 3000 Facsimile (813) 286 6000 Report of Independent Auditors To Board of Directors and Shareholder of CIFG Assurance North America, Inc: In our opinion, the accompanying balance sheets and the related statements of operations, changes in shareholder's equity and comprehensive income (loss), and cash flows present fairly, in all material respects, the financial position of CIFG Assurance North America, Inc. (the "Company") at December 31, 2006 and 2005, and the results of its operations and its cash flows for each of the three years then ended in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. /s/ PricewaterhouseCoopers LLP New York, New York March 27, 2007 -2- (page) CIFG Assurance North America, Inc. Balance Sheets ($ In '000s, except per share amount)
As of December 31, 2006 2005 Assets Investments Fixed income securities available-for-sale, at fair value (amortized cost of $135,985 and $134,387) $ 134,403 $ 132,924 Short-term investments, at cost 39,588 24,652 Total Investments 173,991 157,576 Cash 1,068 3,388 Premiums receivable 11,436 7,515 Receivable for securities sold --- 4,000 Investment income due and accrued 1,748 1,497 Prepaid reinsurance premiums 183,761 141,827 Reinsurance recoverable on unpaid loss and loss adjustment expense reserves 4,670 2,777 Derivative assets 10 4 Intangible asset - licenses acquired in acquisition 8,331 8,331 Current income taxes recoverable 42 --- Total assets $ 385,057 $ 326,915 Liabilities and Shareholder's Equity Liabilities Deferred premium revenues $ 218,714 $ 165,846 Loss and loss adjustment expense reserves 5,530 3,306 Deferred ceding commissions, net 18,373 13,267 Ceded reinsurance balances payable 6,463 12,949 Deferred fee income 1,233 413 Ceding commission payable 141 138 Current income taxes payable --- 88 Derivative liabilities 49 57 Balances due to affiliates 10,606 6,798 Other liabilities 2,051 1,961 Total liabilities 263,160 204,823 Shareholder's Equity Common stock (par value $4,191.49 per share authorized, issued and outstanding shares 4,700) 19,700 19,700 Additional paid-in-capital 122,850 122,850 Accumulated deficit (19,072) (18,995) Accumulated other comprehensive loss (net of deferred income (benefit) taxes of $0, in 2006 and 2005) (1,581) (1,463) Total shareholder's equity 121,897 122,092 Total liabilities and shareholder's equity $ 385,057 $ 326,915
The accompanying notes are an integral part of these financial statements. -3- (page) CIFG Assurance North America, Inc. Statements of Operations ($ In '000s)
Years Ended December 31, 2006 2005 2004 Revenues Gross premiums written $ 101,665 $ 94,256 $ 55,146 Ceded premiums written (84,163) (83,958) (48,747) Net premiums written 17,502 10,298 6,399 Change in net deferred premium revenue (10,925) (5,546) (2,588) Net premiums earned (net of ceded earned premiums of $42,322 in 2006, $27,267 in 2005 and $18,529 in 2004) 6,577 4,752 3,811 Net investment income 6,677 4,098 2,273 Net realized investment (losses) gains (5) (4) 10 Net realized and unrealized gains (losses) on credit derivatives 14 (32) (5) Other income 217 47 53 Total revenues 13,480 8,861 6,142 Expenses Losses and loss adjustment expenses, net 331 236 199 Amortization of deferred ceding commissions (8,794) (3,158) (2,042) Amortization of deferred acquisition costs 6,744 3,641 2,635 Operating expenses 14,892 11,826 10,822 Total expenses 13,173 12,545 11,614 Income (loss) before income taxes 307 (3,684) (5,472) Provision for income taxes 384 148 --- Net Loss $ (77) $ (3,832) $ (5,472)
The accompanying notes are an integral part of these financial statements. -4- (page) CIFG Assurance North America, Inc. Statements of Changes in Shareholder's Equity and Comprehensive (Loss) Income ($ In '000s, except per share amounts)
Years Ended December 31, 2006 2005 2004 Common Shares Shares at beginning of period 4,700 4,700 4,700 Shares as of December 31 4,700 4,700 4,700 Common Stock Balance at beginning of period $ 19,700 $ 19,700 $ 19,700 Balance as of December 31 19,700 19,700 19,700 Additional paid-in capital Balance at beginning of period 122,850 122,850 112,850 Capital contribution --- --- 10,000 Balance as of December 31 122,850 122,850 122,850 Accumulated deficit Balance at beginning of period (18,995) (15,163) (9,691) Net loss (77) $ (77) (3,832) $ (3,832) (5,472) $ (5,472) Balance as of December 31 (19,072) (18,995) (15,163) Accumulated other comprehensive (loss) income Balance at beginning of period (1,463) (53) 530 Net change in unrealized (depreciation) of AFS securities, net of deferred tax expense (benefit) expense of $0 in 2006, $28 in 2005, $(313) in 2004 (118) (1,410) (583) Other comprehensive loss (118) (118) (1,410) (1,410) (583) (583) Total comprehensive loss $ (195) $ (5,242) $ (6,055) Balance as of December 31 (1,581) (1,463) (53) Total Shareholder's Equity $ 121,897 $ 122,092 $ 127,334 2006 2005 2004 Disclosure of reclassification amounts Unrealized (depreciation) arising during the period, net of taxes $ (114) $ (1,407) $ (590) Less: reclassification adjustment for net (losses) and gains included in net income, net of taxes (4) (3) 7 Net unrealized (depreciation) of securities, $ (118) $ (1,410) $ (583) net of taxes
The accompanying notes are an integral part of these financial statements. -5- (page) CIFG Assurance North America, Inc. Statements of Cash Flows ($ In '000s)
Years ended December 31, 2006 2005 2004 Cash flows from operating activities Net Loss $ (77) $ (3,832) $ (5,472) Adjustments to reconcile net loss to net cash provided (used) by operating activities: Amortization of bond premium, net 283 (5) 700 Net realized losses (gains) on sale of investments 5 4 (10) Increase in loss and loss adjustment reserves, net of reinsurance 331 236 199 Increase in deferred premium revenues 52,868 62,273 31,425 Increase in prepaid reinsurance premiums (41,934) (56,722) (28,975) Decrease in deferred acquisition costs, net --- --- 1,184 (Increase) in premiums receivable (3,767) (2,484) (947) (Decrease) increase in ceded reinsurance balances payable (6,515) 6,966 (12,766) Increase (decrease) in ceding commissions payable 3 (107) (372) Increase in investment income due and accrued (251) (878) (37) Increase in balances due to affiliates 3,808 1,115 344 (Decrease) Increase in current income taxes payable (130) 88 --- Net realized and unrealized (gains) losses on credit (14) 32 5 derivatives, net Increase in deferred ceding commissions, net 5,106 11,216 2,051 Other, net 645 1,689 844 Total adjustments to net loss 10,438 23,423 (6,355) Net cash provided (used) by operating activities 10,361 19,591 (11,827) Cash flows from investing activities (Purchase) of fixed income securities (38,299) (92,022) (49,454) (Purchase) sale of short-term investments, net (14,936) 43,236 21,902 Proceeds from the sale of fixed income securities 55 180 3,760 Proceeds from the maturity of fixed income securities 40,417 26,098 31,819 Net cash (used) provided by investing activities (12,763) (22,508) 8,027 Cash flows from financing activities Capital contributions --- --- 10,000 Net cash provided by financing activities --- --- 10,000 Effect of exchange rates on cash 82 (263) (155) (Decrease) increase in cash (2,320) (3,180) 6,045 Cash at beginning of the year 3,388 6,568 523 Cash at the end of the year $ 1,068 $ 3,388 $ 6,568 Supplemental disclosures of cash flow information Federal Income Taxes paid $ 294 $ 60 $ ---
The accompanying notes are an integral part of these financial statements. -6- (page) CIFG Assurance North America, Inc. Notes to Financial Statements December 31, 2006, 2005 and 2004 (Dollar Amounts in Thousands) 1. Business and Organization CIFG Assurance North America, Inc., ("CIFG NA" or the "Company") was incorporated on April 11, 2002 in the State of New York. On May 24, 2002 the New York State Insurance Department (NYSID) granted the Company a license to conduct surety, credit, residual value and financial guaranty insurance. As of December 31, 2006, CIFG NA was licensed to transact financial guaranty insurance in 45 states and the U.S. Virgin Islands, District of Columbia and the Commonwealth of Puerto Rico. In prior years, the shares of CIFG NA were transferred by CIFG NA's direct parent, CIFG Services, Inc. ("CIFG Services") to a voting trust to comply with certain U.S. state restrictions regarding the ownership or control of U.S. insurance companies by a foreign government or any agency or instrumentality thereof. Under the terms of the Voting Trust Agreement, 80% of the trustees must be directors or officers of CIFG Services, or Caisse Nationale des Caisses d'Epargne ("CNCE"), an indirect parent of CIFG Holding. Although the shares are legally owned by the voting trustees in accordance with the Voting Trust Agreement, CIFG Services retains the economic benefits of the shares of CIFG NA. CIFG Services is a management company that was incorporated in the state of Delaware during 2001. CIFG Services is a wholly-owned subsidiary of CIFG Guaranty, a reinsurance company that was registered in France by Registre du Commerce et des Societes on March 30, 2001. CIFG Guaranty is a wholly-owned subsidiary of CIFG Holding, a French corporation that acts as a holding company for the CIFG group of companies. CIFG Guaranty owns 100% of the outstanding shares of CIFG Services and CIFG Europe. CIFG Europe is a French licensed insurance company authorized to write financial guaranty business throughout 20 member states of the European Union. On November 17, 2006, Banque Federale des Banques Populaires ("BFBP") and CNCE combined certain of their operations, through Natexis Banques Populaires ("Natexis). CNCE contributed CIFG Holding and its subsidiaries, as well as other assets, to Natexis, which was simultaneously renamed "Natixis". As of December 31, 2006, CNCE and BFBP each owned 34.44% of Natixis, with 8.76% owned by Caisse des Depots et Consignations ("CDC") (via CDC Finance Holding) and 22.36 % was owned by public float and institutional shareholders. Until November 17, 2006, CIFG Holding was wholly-owned by CNCE. In the ordinary course of business, the Company issues financial guaranty contracts in respect of certain obligations of certain variable interest entities (VIEs). Specifically, CIFG NA has issued contracts in respect of certain obligations of multiple distinct New York State business trusts, collectively known as the New Generation Funding Trusts. The financial guaranty contracts generally provide credit protection to investors who have entered into credit derivative transactions with the respective VIEs. Other than the transactions described above, the VIEs own no assets and have no outstanding debt and, by virtue of the credit support provided by the financial guaranty contracts, CIFG NA is considered to be the primary beneficiary of these VIEs. Accordingly, these VIEs are consolidated. Each of CIFG Guaranty, CIFG Europe and CIFG NA has received an insurer financial strength rating of "AAA" from Fitch Ratings, an insurer financial strength rating of "Aaa" from Moodys Investors Services Inc., and an insurer financial strength and financial enhancement ratings of -7- (page) "AAA" from Standard and Poor's Rating Services ("S&P"), the highest rating assigned by each rating agency. 2. Significant Accounting Policies The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP), which for insurance and reinsurance companies differ in certain respects from the accounting practices prescribed or permitted by NYSID. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant accounting policies are as follows: Investments The Company's investment portfolio is accounted for on a trade-date basis. Investments in fixed income securities that are considered available-for-sale ("AFS") are carried at fair value, with unrealized gains and losses, net of deferred taxes, reflected in Other Comprehensive Income ("OCI"). Short-term investments are stated at amortized cost, which approximates fair value. Unrealized gains and losses are calculated using amortized cost as the basis. AFS investments denominated in currencies other than the U.S. dollar are accounted for at their U.S. dollar equivalent using exchange rates in effect at the balance sheet date. Changes in values due to currency fluctuations are recorded as unrealized gains or losses on AFS securities, net of deferred taxes, in OCI. For purposes of computing amortized cost, premiums and discounts are accounted for using the effective yield method over the remaining terms of securities acquired. For premium on bonds that do not have call features, such premiums are amortized over the remaining terms of the securities. The Company's process for identifying declines in the fair value of investments that are other than temporary involves consideration of multiple factors. These factors include current economic conditions, market prices, issuer-specific developments, the time period during which there has been a significant decline in value and the Company's intent and ability to hold the investment for a sufficient period of time for the value to recover. If the Company's analysis of these factors results in the determination that the decline is other-than temporary, CIFG NA writes down the carrying value of the investment to fair value and records a realized loss. As of December 31, 2006 and 2005, there were no declines in fair value deemed to be other than temporary. Realized gains and losses on the sale of investments are determined on the basis of first in, first out ("FIFO"). Investment income is recorded when earned. Deferred Acquisition Costs (DAC) and Deferred Ceding Commissions Certain costs incurred, primarily related to and varying with the production of new financial guaranty business, excluding financial guaranty contracts accounted for as derivatives, have -8- (page) been deferred (DAC). These costs include direct and indirect expenses related to underwriting and contract origination expenses, rating agency fees and premium taxes. The Company receives ceding commissions under its ceded reinsurance contracts as compensation for acquisition costs incurred. Ceding commissions are deferred. The Company considers deferred premium revenue and the present value of future premiums due to the Company under installment contracts when determining the recoverability of DAC. DAC and deferred ceding commissions are amortized into the income statement over the periods in proportion to the earnings of the related premiums. Deferred ceding commissions are presented in the balance sheet net of DAC. Premium Revenue Recognition Premiums received at the inception of the policy, or otherwise "up-front" premiums, are earned pro-rata over the period of the underlying risk in proportion to the amount of risk outstanding over the expected period of coverage. The amount of risk outstanding is equal to the sum of the par amount of the debt insured. Installment premiums written are recognized ratably over each installment period. If a guaranteed issue is retired early, the remaining deferred premium will be earned, and any related unamortized DAC and deferred ceding commissions will be recognized immediately. Deferred premium revenue and prepaid reinsurance premiums represent the portion of gross and ceded premium written, respectively, which has been allocated to the unexpired underlying risk. Losses and Loss Adjustment Expense Reserves Loss and loss adjustment reserves are established for financial guaranty contracts subject to SFAS 60 - "Accounting and Reporting by Insurance Enterprises" ("FAS 60"). The reserve for losses and loss adjustment expenses consists of active credit reserves and case basis loss and loss adjustment expense reserves. The development of active credit reserves is based upon estimates of the expected levels of debt service payment defaults on currently guaranteed issues that are not presently or imminently in default, and by reference to financial guaranty industry historical loss experience. The determination of the reserve is primarily based on an analysis of expected losses as a percentage of expected premium on the outstanding insured portfolio, pursuant to which, active credit reserves are provided on a periodic basis as a function of regular financial guaranty premiums earned to date. The Company monitors active credit reserves on an ongoing basis and adjusts these reserves based on actual loss experience, considering the changes in the mix of business and economic conditions. Case basis loss reserves will be recorded when it is probable that a loss has been incurred and the amount of such loss can be reasonably estimated. When losses occur, case basis loss reserves will be established in an amount that is sufficient to cover the present value of the anticipated defaulted debt service payments over the expected period of default and estimated expenses associated with settling the claims, less estimated recoveries under salvage or subrogation rights. The active credit reserve is available to be applied against future case basis loss reserves and any related adjustments. As of December 31, 2006 and 2005, there were no case basis loss reserves recorded. The Company's loss reserving policy, described above, is based on guidance provided in FAS 60, SFAS 5 - "Accounting for Contingencies", and analogies to Emerging Issues Task Force -9- (page) (EITF) 85-20, "Recognition of Fees for Guaranteeing a Loan." FAS 60 requires that, for short-duration contracts, a liability for unpaid claim costs relating to insurance contracts, including estimates of costs relating to incurred but not reported claims, be accrued when insured events occur. Additionally, SFAS 5 requires that a loss be recognized where it is probable that one or more future events will occur confirming that a liability has been incurred at the date of the financial statements and the amount of loss can be reasonably estimated. Management believes that the Company's reserves are adequate to cover the ultimate net cost of claims. However, because the reserves are based on management's judgment and estimates, there can be no assurance that the ultimate liability will not exceed such estimates. Income Taxes The Company is included in the consolidated U.S. tax return of CIFG Services. The tax provision for CIFG NA is determined on a stand-alone-basis. Deferred income taxes are provided with respect to the temporary differences between the tax bases of assets and liabilities and the reported amounts in the financial statements that will result in deductible or taxable amounts in future years when the reported amount of the asset or liability is recovered or settled. Such temporary differences relate principally to premium revenue recognition, deferred acquisition costs, deferred ceding commissions, net operating losses, and unrealized appreciation or depreciation of investments. A valuation allowance is established when it is more likely than not (a likelihood of more than 50 percent) that some portion or the entire deferred tax asset will not be realized. Reinsurance In the normal course of business, the Company seeks to reduce its financial guaranty exposure by reinsuring certain levels of risk with other insurance enterprises or reinsurers. Reinsurance premiums ceded and related commissions recorded are deferred and recognized in earnings on a pro-rata basis over the period the related financial guaranty coverage is provided. Intangible Assets In prior years, the Company's acquisition of Western Continental Insurance Company ("WCIC") resulted in an intangible asset for the fair value of the insurance licenses acquired, which is carried in the balance sheet. The Company has determined that the licenses have an indefinite life and, therefore, are not being amortized. The recoverability of the carrying value of the intangible asset is evaluated annually based on a review of forecasted discounted cash flows and by referencing other available information. As of December 31, 2006 and 2005, there were no adjustments to the carrying value of the intangible asset. Derivative Contracts The Company has issued insurance policies that do not qualify for the financial guaranty scope exception under FAS 133 and 149. These contracts are recorded at fair value which is determined using models developed by the Company. The models include various assumptions such as an expected loss projection. The valuation results from these models could differ materially from amounts that might actually be realized in the market. The Company believes that the most meaningful income statement presentation of derivative revenues is to reflect them as premiums written when installments are received, as premium earned over the installment period, with changes in fair value recorded as "net realized and -10- (page) unrealized gains (losses) on credit derivatives." Derivative assets and liabilities are presented on a gross basis in the balance sheet. Variable Interest Entities (VIEs) From time to time, the Company guarantees payment obligations of counterparties, including VIEs that may enter into credit default swaps ("CDS") with third parties. The Company provides financial guarantees covering certain obligations of these entities at market rates and consolidates those VIEs where the Company is determined to be the primary beneficiary. Foreign currency translation Functional currencies are generally the currencies of the local operating environment. CIFG NA's functional currency is the U.S. dollar. CIFG NA's financial statements include balances denominated in currencies other than the U.S. dollar which are converted to the U.S. dollar at exchange rates in effect at the balance sheet dates with income statement accounts converted using daily exchange rates which are averaged on a year-to-date basis. Foreign currency transaction gains and losses, as well as gains and losses arising from the re-valuation of assets (excluding AFS investments) and liabilities denominated in non-functional currencies are reflected in net income. Recent Accounting Developments In February 2006, the Financial Accounting Standards Board (the "FASB") issued SFAS No. 155, "Accounting for Certain Hybrid Financial Instruments" ("FAS 155"), which amends SFAS No. 133, "Accounting for Derivative Instruments and Hedging" ("FAS 133") and SFAS No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities." FAS 155 permits an election for hybrid instruments that contain an embedded derivative that otherwise would require bifurcation to irrevocably be accounted for at fair value, with changes in fair value recognized in the statement of operations and comprehensive income. The fair value election may be applied on an instrument-by-instrument basis. FAS 155 also eliminates a restriction on qualifying special purpose entities from holding passive derivative instruments. FAS 155 is effective for all financial instruments acquired or issued after December 15, 2006. The FASB's Derivative Implementation Group ("DIG") issued DIG Issue B40 - "Embedded Derivatives: Application of Paragraph 13(b) to Securitized Interests in Prepayable Financial Assets" ("DIG B40") in December of 2006. DIG B40 provides a scope exception on performing embedded derivative tests required under FAS 133 related to rate of returns for certain securitized interests. DIG B40 is required to be applied upon adoption of FAS 155. The Company is in the process of evaluating the impact of FAS 155 and DIG B40 on its financial statements. In June 2006, the FASB issued FASB Interpretation ("FIN") No. 48, "Accounting for Uncertainty in Income Taxes", an interpretation of SFAS No. 109, "Accounting for Income Taxes" ("FAS 109"). FIN 48 requires that the Company determine whether a tax position is more likely than not to be sustained under examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. If a tax position does not meet the more likely than not threshold, the benefit is not recognized in the financial statements. If the Company determines that a position meets the recognition threshold, the position is measured to determine the amount of the benefit that may be recognized in the financial statements based on criteria set forth in the pronouncement. FIN 48 also provides guidance on derecognition, classification of -11- (page) interest and penalties, accounting in interim periods and disclosure. FIN 48 is applicable for fiscal years beginning after December 15, 2006. The Company is in the process of evaluating the impact of FIN 48 on its financial statements. The FASB issued FAS No. 157, "Fair Value Measurement" ("FAS 157") in September 2006. This pronouncement defines fair value, establishes a framework for measuring fair value and enhances the footnote disclosures pertaining to fair value. Fair values are evaluated using a hierarchy (Levels 1, 2, & 3), which is based on the level of inputs used for the valuation. The input levels range from quotable market prices to unobservable inputs such as an entity's own internal data. The disclosure requirements vary amongst the fair value hierarchy levels. FAS 157 is applicable to financial statements issued for fiscal years beginning after November 15, 2007 and for interim periods within those fiscal years. The Company is in the process of evaluating the impact of FAS 157 on its financial statements. On February 15, 2007 the FASB issued SFAS No. 159 - "The Fair Value Option for Financial Assets and Financial Liabilities including an amendment of FASB No. 115" ("FAS 159"), which provides companies with an option to report selected financial assets and liabilities at fair value. The objective of this pronouncement is to reduce both complexity in accounting for financial instruments and the volatility in earnings caused by measuring related assets and liabilities differently. FAS 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities. FAS 159 is applicable for fiscal years beginning after November 15, 2007. The Company is in the process of evaluating the impact of FAS 159 on its financial statements. Due to the diversity of accounting practices in the financial guaranty industry, the FASB undertook a project in 2005 to consider the accounting model for financial guaranty insurers. An exposure draft is expected in 2007. The current accounting model used by the Company may change significantly. Until the FASB issues specific guidance, the Company intends to continue to apply its existing accounting policies. It is not possible to predict the impact that the FASBs project may have on the Company's accounting practices. 3. Related Parties Administrative Services and Property Agreement The Company participates in a Management Services Agreement with CIFG Services, which has been approved by the NYSID. Under this agreement CIFG Services provides the Company with management services, including office space and furniture and equipment used by the Company. Under the terms of this agreement, operating expenses are allocated based on the requirements of Regulation 30 of the NYSID. In 2006, 2005 and 2004, expenses charged by CIFG Services to the Company under this agreement were $33.5, $23.5, and $21.3 million, respectively. Facultative Reinsurance Agreements CIFG Guaranty participates in a Master Facultative Reinsurance Agreement ("Agreement") with CIFG NA. Under the terms of this Agreement, CIFG Guaranty has the option to reinsure up to 90% of CIFG NAs acceptable risks. CIFG Guaranty pays a ceding commission on premiums ceded under the terms of this Agreement. Premiums ceded by CIFG NA and assumed by CIFG -12- (page) Guaranty under this facultative reinsurance agreement were $84.2, $84.0, and $48.7 million for 2006, 2005 and 2004, respectively. As of December 31, 2006 and 2005, CIFG Guaranty pledged to CIFG NA U.S. dollar denominated investments with a fair value of $273.0 and $168.2 million respectively, to support its reinsurance coverage in accordance with New York State insurance regulatory requirements. The assets pledged are maintained in a secured trust on behalf of CIFG NA, for its sole use and benefit in accordance with New York State insurance regulation 11NYCRR 126. Financial Guarantees In the normal course of business, CIFG NA enters into certain financial guaranty contracts with affiliates on terms that management believes are on an arms-length basis. The affiliates involved are Credit Foncier ("Foncier") and IXIS Corporate & Investment Bank ("IXIS CIB"). Gross premiums written on policies closed with IXIS CIB during 2006, 2005 and 2004 were $2.8 million, $608 thousand and $207 thousand, respectively. Gross premiums written on policies with Foncier during 2006, 2005 and 2004 were nil, $8.9 million and $4.5 million, respectively. Capital Maintenance Agreement The Company has entered into an irrevocable keep-well capital maintenance agreement with CIFG Guaranty. The agreement requires CIFG Guaranty to contribute capital to the Company if at any time the capital of the Company falls below $80 million, so as to maintain minimum capital at that level. Tax Sharing Agreement The Company files a consolidated Federal income tax return with CIFG Services, and files separate-company state and local income tax returns. The method of allocation between the companies in the consolidated Federal income tax return is subject to a tax allocation agreement approved by the Board of Directors of CIFG NA and the NYSID. Pursuant to this tax allocation agreement between the companies, total Federal income tax expense is determined on a separate company basis. Members with losses record tax benefits to the extent such losses are recognizable on a separate company basis. Inter-company tax balances are settled on a periodic basis, no less than annually. 4. Deferred Acquisition Costs and (Deferred Ceding Commissions) Acquisition costs and ceding commissions are deferred and amortized in proportion to the related premium revenue to be recognized in future periods. The commission income and acquisition costs deferred and related amortization are as follows:
As of December 31, 2006 2005 Deferred ceding commissions, net, beginning of period $ (13,267) $ (2,051) Current year costs: Deferred acquisition costs 16,419 12,715 Deferred ceding commissions (23,575) (23,448) Net (7,156) (10,733) Net amortization during the period 2,050 (483) Deferred ceding commissions, net, end of period $ (18,373) $ (13,267)
-13- (page) During the fourth quarter of 2006 the Company conducted its annual DAC study, which encompassed both a review of deferrable costs and the amortization pattern of DAC and deferred ceding commissions. In addition, the Company enhanced its policy systems in 2006, allowing it to update its exposure with more current policy information received from external parties. These modifications have resulted in a change in accounting estimate for DAC, the effect of which has been reflected on a prospective basis in these financial statements in accordance with SFAS No. 154 - "Accounting Changes and Error Corrections, a replacement of APB No. 20 and FASB Statement No. 3". Approximately $1.5 million is included in the "amortization of deferred acquisition costs" as a charge to the income statement. 5. Investments The Company's investment objective is to optimize after-tax returns while emphasizing the preservation of capital through the maintenance of high-quality investments with adequate liquidity. The weighted-average credit quality of the fixed income portfolio, which excludes short-term investments, was AAA with no investment rated below BBB as rated by S&P. Short-term investments consist of United States government obligations (61%) and money market instruments (39%). The following tables set forth the amortized cost and fair value of the fixed income securities and short-term investments included in the investment portfolio of CIFG NA:
December 31, 2006 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value United States government obligations $ 68,453 $ 8 $ (897) $ 67,564 State and municipal obligations 16,642 --- (452) 16,190 US Agencies 43,027 3 (347) 42,683 Corporate obligations 4,118 --- (26) 4,092 Non- US * 3,744 130 --- 3,874 Short term 39,588 --- --- 39,588 Total $ 175,572 $ 141 $ (1,722) $ 173,991 December 31, 2005 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value United States government obligations $ 99,307 $ 27 $ (1,050) $ 98,284 State and municipal obligations 15,682 21 (246) 15,457 US Agencies 14,070 46 (241) 13,875 Corporate obligations 4,144 4 --- 4,148 Non- US * 1,184 --- (24) 1,160 Short term 24,652 --- --- 24,652 Total $ 159,039 $ 98 $ (1,561) $ 157,576 * Principally euro-denominated debt securities issued by European governments and European municipalities.
Fixed income investments carried at fair value of approximately of $9.1 and $9.2 million as of December 31, 2006 and 2005, respectively, were on deposit with various regulatory authorities to comply with insurance laws. -14- (page) The Company maintains a portion of its cash and investments under a custody agreement with one financial institution that the Company considers of high quality. The following table sets forth the distribution by contractual maturity of investments at amortized cost and fair value at December 31, 2006 and 2005. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations.
December 31, 2006 2005 Amortized Fair Value Amortized Fair Value Cost Cost Due in one year or less $ 73,829 $ 73,730 $ 61,110 $ 60,986 Due after one year through five years 76,219 75,086 75,725 74,594 Due after five years through ten years 22,484 22,337 19,164 19,072 Due over ten years 3,040 2,838 3,040 2,924 Total $ 175,572 $ 173,991 $ 159,039 $ 157,576
As of December 31, 2006 and 2005 no single issuer, excluding U.S. government obligations, exceeds 10% of shareholder's equity. The following investment table presents the Company's gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2006 and 2005:
Greater than 12 months Less than 12 months Total Fair Unrealized Fair Unrealized Fair Unrealized 2006 Value Losses Value Losses Value Losses United States government obligations $ 58,263 $ (879) $ 8,578 $ (18) $ 66,841 $ (897) State and municipal obligations 15,166 (442) 1,023 (10) 16,189 (452) US Agencies 10,250 (237) 28,974 (110) 39,224 (347) Corporate obligations --- --- 4,093 (26) 4,093 (26) Non-US * --- --- --- --- --- --- Total temporarily impaired fixed income securities $ 83,679 $ (1,558) $ 42,668 $ (164) $ 126,347 $ (1,722) Greater than 12 months Less than 12 months Total Fair Unrealized Fair Unrealized Fair Unrealized 2005 Value Losses Value Losses Value Losses United States government obligations $ 46,792 $ (559) $ 42,714 $ (491) $ 89,506 $ (1,050) State and municipal obligations --- --- 9,197 (246) 9,197 (246) US Agencies --- --- 10,377 (241) 10,377 (241) Corporate obligations --- --- --- --- --- --- Non-US * --- --- 1,160 (24) 1,160 (24) Total temporarily impaired fixed income securities $ 46,792 $ (559) $ 63,448 $ (1,002) $ 110,240 $ (1,561) * Principally euro-denominated debt securities issued by European governments and European municipalities.
-15- (page) The unrealized losses in the Company's investment portfolio were caused by increases in interest rates. The Company evaluated the credit rating of these securities and noted no significant credit deterioration. Since the decline in market value is related to changes in interest rates and not credit quality, and the Company has the intent and ability to hold the investments until the value recovers, the Company does not consider these investments to be other than temporarily impaired as of December 31, 2006 and 2005. Net investment income was comprised of the following:
December 31, 2006 2005 2004 Fixed income securities $ 4,815 $ 3,511 $ 1,086 Short-term investments 2,064 729 1,326 Total Investment income 6,879 4,240 2,412 Investment expenses (202) (142) (139) Net investment income $ 6,677 $ 4,098 $ 2,273
Net realized (losses) gains from fixed income securities were comprised of the following:
December 31, 2006 2005 2004 Gross gains $ --- $ --- $ 10 Gross losses (5) (4) --- Net realized capital (loss) gains $ (5) $ (4) $ 10
Proceeds from the sale of fixed income securities were $55 thousand, $180 thousand, and $3.8 million for the periods ended December 31, 2006, 2005 and 2004, respectively. 6. Reinsurance The Company participates in a Facultative Reinsurance Agreement with CIFG Guaranty. The Company utilizes reinsurance principally to increase capacity and to reduce the risk of loss on financial guaranty business underwritten. The Company is liable with respect to reinsurance ceded to the extent that CIFG Guaranty fails to meet its obligation to the Company. CIFG NA regularly monitors the financial condition of CIFG Guaranty and believes there is no material unrecoverable reinsurance. -16- (page) The effect of reinsurance on premiums written was as follows:
December 31, 2006 2005 2004 Direct premium written $ 98,808 $ 84,408 $ 45,058 Assumed premium written 2,857 9,848 10,088 Ceded premium written (84,163) (83,958) (48,747) Net premiums written 17,502 10,298 6,399 Change in direct deferred premium revenue (56,116) (60,054) (29,625) Change in assumed deferred premium revenue 3,350 (2,184) (3,181) Change in ceded deferred premiums revenue 41,841 56,692 30,218 Net premiums earned $ 6,577 $ 4,752 $ 3,811
Net earned premium in 2006, 2005 and 2004 does not include any refunded earned amounts. Ceding commissions on reinsurance ceded to CIFG Guaranty was $25.2, $25.2, and $14.6 million during 2006, 2005 and 2004, respectively. 7. Income Taxes The current provision for federal income taxes was $82 thousand, $148 thousand, and nil for the years ended December 31, 2006, 2005 and 2004. During 2006, an estimated tax payment of $294 thousand was made for alternative minimum taxes ("AMT"). AMT paid in current and prior years of $354 thousand are available as AMT credits to be carried-forward and utilized in the event that regular tax exceeds AMT tax in the future. The Company's total tax provision differs from the amount that would be obtained by applying the tax rate to pre-tax book income due to the impact of disallowed expenses, tax exempt interest and the establishment of a valuation allowance. -17- (page) The tax effects of temporary differences that give rise to deferred tax assets and liabilities as of December 31, 2006 and 2005 are presented below:
As of December 31, 2006 2005 Deferred tax assets: Net operating loss carry-forward $ 599 $ 2,002 Deferred premium revenue 141 203 Deferred ceding commission, net 6,431 4,644 Unrealized loss on investments 687 512 Other 669 529 Less: valuation allowance (7,604) (7,220) Total deferred tax assets 923 670 Deferred tax liabilities: Accretion of discount 169 119 License amortization 745 551 Other 9 --- Total deferred tax liabilities 923 670 Net deferred tax assets $ --- $ ---
In 2006, the Company used approximately $4.1 million in net operating loss carry-forwards generated in prior years to offset taxable income in the current year. At December 31, 2006, the Company had net operating loss carry-forwards available to offset future taxable income of $1.7 million which will expire in 2024. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect on tax assets and liabilities for a change in tax rates is recognized in income in the period that includes the enactment date. The Company has yet to establish an earnings history. As a result, management has established a valuation allowance to offset net deferred tax assets. 8. Dividend Restrictions Under New York State insurance law, CIFG NA may pay a dividend only from earned surplus subject to the maintenance of a minimum capital requirement. Any dividends declared or paid may not exceed, together with all other dividends declared or distributed by CIFG NA during the next preceding twelve months, the lesser of (i) 10% of its shareholders surplus shown on its last filed statement, or (ii) one hundred percent of adjusted net investment income (as defined under New York Insurance Law), for such 12-month period without prior approval of the Superintendent of the NYSID. The Company has not declared or paid any dividends since its inception given that it has no earned surplus and is therefore ineligible to pay a dividend. -18- (page) 9. Statutory Accounting Practices U.S. GAAP differs in certain significant respects from accounting practices prescribed or permitted by the NYSID. In 2006, the NYSID performed a routine triennial examination of the Company; an examination report has not been issued yet. The Company does not anticipate any material adjustments to its statutory capital and surplus as a result of this examination. The following summarizes the significant differences between the statutory annual statement as filed and U.S. GAAP.
As of December 31, 2006 2005 U.S. GAAP Shareholders Equity $ 121,897 $ 122,092 Statutory Adjustments: Premium revenue recognition (3,991) (2,521) Intangible asset (8,331) (8,373) Loss and loss adjustment expense reserves, net 860 529 Contingency reserves, net (10,597) (6,316) Deferred income taxes 14,123 11,824 Unrealized losses, net 1,838 1,463 Fair value of derivatives, net 39 53 Deferred Ceding commission income 891 1,712 Other liabilities 59 22 Non admitted assets (12,968) (11,910) Statutory capital and surplus $ 103,820 $ 108,575
The principal differences result from the following statutory accounting practices: * Upfront premiums are recognized as earned when related principal and interest have expired while under GAAP, premiums are recognized as earned over the expected coverage period; * Liabilities for deferred premium revenues are shown net of amounts ceded under reinsurance contracts while under GAAP, they are recorded at their gross amounts; * Acquisition costs are charged to operations as incurred. Under GAAP, certain costs are deferred and amortized as the related premiums are earned; * Intangible assets were charged directly to surplus as a result of the statutory mergers while under GAAP the Company established an intangible asset representing the value of state licenses, which is subject to impairment tests; * A contingency reserve is computed on the basis of statutory requirements, and reserves for case basis losses and LAE are established, at present value, for specific insured issues that are identified as currently or likely to be in default. Under GAAP, case basis loss reserves are established at present value based on CIFG NAs reasonable estimate of the identified losses and LAE, plus estimates for reserves for the portfolio of active credits on the insured obligations written; -19- (page) * If applicable, a provision is made for ceded unearned premiums and losses recoverable in excess of funds held plus other qualifying collateral, on business reinsured with companies not qualified or licensed in the State of New York through a direct charge to surplus, while under GAAP there is no such provision; * Fixed income securities are carried at amortized cost; under GAAP these securities are designated as available-for-sale and carried at fair value, with the related unrealized gains or losses recognized as a separate component of shareholders equity net of applicable deferred federal income tax; * Deferred tax assets in excess of certain defined limitations are excluded from the balance sheet and charged to surplus as a non-admitted asset. Under GAAP, deferred federal income taxes reflect the net tax effect of temporary differences between the carrying amount of GAAP basis assets and liabilities and the amounts used for federal income tax purposes. The change in net deferred taxes, excluding the amount related to unrealized gains and losses, is a component of net income; * Financial guarantees are accounted for as insurance contracts, while under GAAP, certain financial guarantees that do not qualify as insurance contracts under FAS 133 are recorded at fair value; * Ceding commission income is recognized in income when earned and can offset acquisition costs, but a liability is established for any amount of ceding commissions in excess of acquisition expenses. Under GAAP, ceding commission income is deferred and amortized as the related ceded premiums are expensed. * Certain assets classified as non-admitted are charged directly to surplus but are reflected as assets under GAAP. The NYSID has recently undertaken a review of the industry practice to record contingency reserves on a net basis specifically in the case where an unauthorized reinsurer has provided appropriate collateral to secure the ceded contingency reserve. Currently, the NYSID has not concluded their review nor have they issued any new statutory guidance on this subject. As a result, the Company will maintain its current treatment of the ceded contingency reserve until the NYSID has concluded their review and issued final statutory guidance, which is expected to be applied prospectively, if different than the Company's current statutory accounting treatment. As of December 31, 2006 the Company has recorded a gross contingency reserve of $76.3 million which is offset by a ceded contingency reserve of $65.7 million in its statutory financial statements. CIFG NA's statutory financial statements are prepared in conformity with accounting practices prescribed or permitted by the NYSID. Prescribed statutory accounting principles include state laws, regulations and general administrative rules, as well as a variety of the National Association of Insurance Commissioners (NAIC) publications. The NAIC Statements of Statutory Accounting Principles (SSAP) have been adopted as a component of prescribed or permitted practices by the State of New York. The State of New York has adopted certain prescribed practices which vary from those found in SSAP. These differences have no impact on the net income and the determination of statutory surplus. Statutory capital and surplus was $103.8 -20- (page) million and $108.6 million at December 31, 2006 and 2005, respectively, which meets New York State minimum capital requirements. Qualified statutory capital (statutory capital and surplus plus contingency reserve) was $114.4 and $114.9 million at December 31, 2006 and 2005, respectively. Statutory net loss for CIFG NA was $(2.1), $(2.5) and $(5.2) million for the periods ending December 31, 2006, 2005 and 2004, respectively. 10. Net Insurance in Force The financial guaranty contracts issued by CIFG NA guaranty the scheduled payments of principal and interest on municipal and structured obligations. The net exposure retained on any risk is subject to formalized underwriting guidelines. As of December 31, 2006, insurance in force, net of cessions, had a range of legal maturities of 1-74 years. However, the expected life of these transactions may vary substantially from the legal final maturities, and are influenced by actual performance, market conditions and business objectives of the issuers. The expected maturities of these policies are between 1-46 years which are diversified among 1,430 outstanding policies. The weighted-average (based on par) expected life of the guaranteed portfolio is 10.57 years. -21- (page) The distribution of gross and net par in force by bond type is presented in the following table:
Insurance Inforce 2006 2005 Gross Net Gross Net Global Public Finance and Infrastructure State GO And Appropriation $ 5,606,167 $ 760,469 $ 3,716,422 $ 572,445 City And County GO 3,977,717 541,329 1,186,237 168,286 Utility Systems 1,123,985 274,201 680,533 83,185 Airports 1,471,021 253,390 1,406,341 188,661 Health Care 1,491,191 246,967 880,507 130,631 State Tax Backed 1,518,447 216,326 1,183,155 155,092 Higher Education 1,309,316 194,245 553,572 80,973 Sovereign/Sub Sovereign 1,374,633 182,494 1,232,554 183,187 Public Power 739,047 171,468 348,752 62,857 Special Revenue 725,562 140,056 244,910 48,860 Toll Roads 849,642 106,306 822,846 88,051 Local Tax Backed 387,624 78,745 228,134 24,491 Municipal Housing 748,649 74,865 177,794 17,779 Transportation 527,218 52,722 489,794 76,495 Investor-Owned Utilities 230,654 23,065 314,947 48,979 Project Finance 87,244 8,724 77,852 7,785 Total 22,168,117 3,325,372 13,544,350 1,937,757 Global Structured Finance CDO High Yield 10,900,485 1,096,113 4,579,475 596,952 CDO Asset Backed 7,373,885 863,411 4,373,598 472,023 CDO Investment Grade 4,746,055 616,197 3,304,315 471,898 Home Equity 2,882,048 288,205 2,510,373 251,037 Commercial Mortgage Backed 2,426,124 242,612 1,061,265 106,126 Student Loans 1,672,960 167,296 631,674 63,167 Lease Assets 804,747 124,039 1,061,992 190,425 Commercial Asset Backed 656,164 65,616 466,517 46,652 Residential Mortgage Backed 570,573 57,057 778,698 77,870 Other 179,407 17,941 288,658 44,649 Credit Cards 101,000 10,100 101,000 10,100 Auto Loans 71,822 7,182 307,822 37,500 Total 32,385,270 3,555,769 19,465,387 2,368,399 Grand Total $ 54,553,387 $ 6,881,141 $ 33,009,737 $ 4,306,156
The Company limits its exposure to losses under its financial guarantees through a formal credit approval process and by maintaining a surveillance function which monitors insured transactions. Additionally, the Company mitigates credit risk by underwriting investment grade transactions and maintaining collateral quality requirements on asset-backed obligations, as well as through reinsurance. As of December 31, 2006, there were no guaranteed transactions rated below investment grade. Included in the table above is $0.2 billion of direct net par exposure related to securitization transactions supported by sub-prime mortgage assets. As of December 31, 2006, all of this exposure has underlying ratings of triple-A by at least two rating agencies prior to the benefit of financial guaranty provided by the Company, except for $5.9 million which was issued in 2004 and is rated in the A-minus rating category. In addition, CIFG NA has indirect net exposure to sub-prime mortgage assets as a result of guarantees of $0.8 billion of senior tranches of multi-sector collateralized debt obligations that -22- (page) include varying proportions of sub-prime mortgage assets in their collateral pools. As of December 31, 2006, all of this exposure has underlying ratings of triple-A by at least two rating agencies prior to the benefit of the financial guaranty provided by the Company. Gross par written includes $250 million, $505 million and $2.3 billion of assumed premium business for each of the three years ended December 31, 2006, 2005 and 2004, respectively. Gross par outstanding includes $3.9 billion and $5.0 billion of assumed business, at December 31, 2006 and December 31, 2005, respectively. Gross and net par outstanding includes financial guaranty contracts treated as derivatives under FAS 133. The distribution of gross and net par in force by geographical location is presented in the following table:
2006 % of 2005 % of Gross Net Net Gross Net Net United States: Florida $ 1,538,190 $ 683,957 9.9% $ 681,672 $ 68,167 1.6% New York 3,870,534 613,447 8.9% 3,264,855 556,215 12.9% Puerto Rico 1,368,371 236,955 3.4% 1,168,357 217,496 5.1% Illinois 1,795,392 179,539 2.6% 1,325,550 132,555 3.1% California 1,054,063 165,509 2.4% 901,917 151,317 3.5% New Jersey 1,249,406 152,441 2.2% 835,701 111,070 2.6% Texas 880,098 136,037 2.0% 544,034 102,431 2.4% Pennsylvania 1,020,536 102,054 1.5% 165,159 16,516 0.4% Louisiana 961,475 96,148 1.4% 4,800 480 0.0% Massachusetts 297,565 78,507 1.1% 100,587 58,809 1.4% Other states 5,940,820 616,582 9.0% 2,599,691 282,468 6.5% US diversified* 25,316,946 2,822,686 41.0% 13,950,086 1,790,619 41.5% Total United States 45,293,396 5,883,862 85.4% 25,542,409 3,488,143 81.0% Non United States: Italy 1,155,563 115,556 1.7% 1,014,215 101,422 2.4% Canada 228,594 67,890 1.0% 221,813 67,212 1.6% United Kingdom 424,617 42,462 0.6% 427,407 42,741 1.0% Greece 328,588 32,859 0.5% 295,988 29,599 0.7% Brazil 316,860 31,686 0.5% 316,860 31,686 0.7% France 263,006 26,301 0.4% 241,307 24,131 0.6% Germany 187,763 18,776 0.3% 176,911 17,691 0.4% Turkey 150,000 15,000 0.2% 150,000 15,000 0.3% Switzerland 81,823 8,182 0.1% 55,131 5,513 0.1% Australia 21,549 2,155 0.0% 19,814 1,981 0.0% Spain 3,470 347 0.0% 3,126 313 0.0% Europe diversified** 2,195,950 219,595 3.2% 1,555,414 155,541 3.6% Global 3,902,208 416,470 6.1% 2,989,342 325,183 7.6% Total Non United States 9,259,991 997,279 14.6% 7,467,328 818,013 19.0% Grand Total $ 54,553,387 $ 6,881,141 100.0% $ 33,009,737 $ 4,306,156 100% * Includes financial guaranties with obligations in multiple states. ** Includes financial guaranties with obligations in multiple countries.
-23- (page) 11. Loss and Loss Adjustment Reserves The Company's reserve for losses and loss adjustment expenses consists of active credit reserves only. There were no case basis reserves recorded during 2006 and 2005. Activity in the losses and loss adjustment reserves, gross of reinsurance, are summarized as follows:
2006 2005 Gross active credit reserves: Balance, beginning of period $ 3,306 $ 1,677 Incurred losses and loss adjustment expense reserves 2,224 1,629 Balance, end of period $ 5,530 $ 3,306
Gross incurred loss and loss adjustment expenses are presented in the income statement net of ceded amounts of $1,893, $1,393, and $1,044 for the years ended December 31, 2006, 2005 and 2004, respectively. 12. Fair Value of Financial Instruments The following fair value amounts were determined by using independent market information when available, and internal valuation methodologies when market quotes were not available. In cases where specific market quotes were unavailable, interpreting market data and estimating market values requires considerable judgment by management. Accordingly, the estimates presented are not necessarily indicative of the amount CIFG NA could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value: Fixed income securities: The fair values of fixed income securities are based primarily on quoted market prices. Short-Term Investments and Cash: The carrying value of these items approximate fair value. Investment Income Due and Accrued: The fair value of investment income due and accrued is assumed to approximate carrying value. Deferred Premium Revenue: The fair value of the deferred premium revenue is based upon the estimated cost to reinsure those exposures at current market rates, which amount consists of the current deferred premium revenue, less an estimated ceding commission thereon. Certain other financial guaranty insurance contracts have been written on an installment premium basis, where the future premiums to be received by the Company are determined based on the outstanding exposure at the time these premiums are due. The fair value of the Company's future premium revenue under its installment contracts is measured using the present value of estimated future installment premiums, less an estimated ceding commission thereon, discounted at 7%. The estimate of the amounts and timing of the future installment premiums is based on contractual premium rates, debt service schedules and expected run-off -24- (page) scenarios. This measure is used as an estimate of the cost to reinsure the Company's exposures under these policies. The carrying amount and estimated fair value of financial instruments are presented below:
December 31, 2006 2005 Carrying Estimated fair Carrying Amount Estimated fair Amount value value Financial Assets: Fixed income securities $ 134,403 $ 134,403 $ 132,924 $132,924 Short-term investments 39,588 39,588 24,652 24,652 Cash 1,068 1,068 3,388 3,388 Investment income due and accrued 1,748 1,748 1,497 1,497 Derivative assets 10 10 4 4 Financial Liabilities: Deferred premium revenue: Gross 218,714 153,100 165,846 116,092 Net of reinsurance 34,953 24,467 24,019 16,812 Derivative liabilities 49 49 57 57 Off-balance sheet instruments: Installment premium receivable Gross --- 124,159 --- 82,973 Net of reinsurance --- 13,063 --- 9,581
13. Credit Derivatives Certain financial guaranty contracts meet the definition of a derivative under FAS 133 as amended by FAS 149. All of these direct contracts provide credit protection to investors who have entered into credit derivative transactions with New Generation Funding Trusts. The Company records these contracts at Managements estimate of fair value based on valuation models. The models contain an expected loss assumption. These contracts are considered by the Company to be, in substance, financial guaranty contracts and the Company generally intends to hold them to maturity. The level of fair value adjustments is dependent upon a number of factors including changes in credit spreads and other market factors. As of December 31, 2006 and 2005, the distribution of par exposure by form of credit enhancement is set forth in the following table on a gross (direct and assumed) basis and net of reinsurance:
December 31, 2006 2005 Gross Net Gross Net Financial guarantees $ 27,200,799 $ 3,879,324 $ 17,605,496 $ 2,424,333 Credit Derivatives 27,352,588 3,001,817 15,404,241 1,881,823 Total $ 54,553,387 $ 6,881,141 $ 33,009,737 $ 4,306,156
-25- (page) 14. Variable Interest Entities The Companys financial statements include the consolidation of New Generation Funding Trusts (VIEs) as disclosed in Note 1. For each of the three years ended December 31, 2006, 2005 and 2004 gross direct premium written by these VIEs was approximately $27.1, $20.8, $10.5 million, respectively, and gross par outstanding at December 31, 2006 and 2005 includes $27.1 and $15.2 billion, respectively, underwritten through these VIEs. -26- Item 1115(b) of Regulation AB, Certain Derivative Instruments. The significance percentage related to each entity or group of affiliated entities providing derivative instruments described in Item 1115 of Regulation AB is less than 10%. Item 1117 of Regulation AB, Legal Proceedings. Recent Events Relating to Fremont Investment & Loan Pursuant to a Form 12b-25 filed on March 2, 2007, Fremont General Corporation ("Fremont General"), the parent of Fremont Investment & Loan ("Fremont"), announced that it was delaying the filing of its Annual Report on Form 10-K for the fiscal year ended December 31, 2006. Pursuant to a Form 8-K filed on March 16, 2007, Fremont General announced that it would not file its Annual Report on Form 10-K for the fiscal year ended December 31, 2006 before its extended deadline of April 17, 2007. Fremont General also announced that, in light of the current operating environment for subprime mortgage lenders and recent legislative and regulatory events, Fremont intends to exit its subprime residential real estate lending business. Fremont General is engaged in discussions with various parties regarding the sale or other disposition of the residential loan origination platform and has engaged Credit Suisse Securities LLC in connection therewith; however, there can be no assurance that Fremont General or its affiliates will be able to enter into any transaction involving its residential loan origination platform. Additionally, on March 7, 2006, Fremont Investment & Loan, its parent, Fremont General Corporation and the company's wholly owned subsidiary, Fremont General Credit Corporation consented to the terms of a cease and desist order issued by the Federal Deposit Insurance Corporation without admitting to the allegations contained therein. The cease and desist order requires, among other things, Fremont to cease and desist from the following: (1) Operating with management whose policies and practices are detrimental to Fremont; (2) operating Fremont without effective risk management policies and procedures in place in relation to Fremont's brokered subprime mortgage lending and commercial real estate construction lending businesses; (3) operating with inadequate underwriting criteria and excessive risk in relation to the kind and quality of assets held by Fremont; (4) operating without an accurate, rigorous and properly documented methodology concerning its allowance for loan and lease losses; (5) operating with a large volume of poor quality loans; (6) engaging in unsatisfactory lending practices; (7) operating without an adequate strategic plan in relation to the volatility of Fremont's business lines and the kind and quality of assets held by Fremont; (8) operating with inadequate capital in relation to the kind and quality of assets held by Fremont; (9) operating in such a manner as to produce low and unsustainable earnings; (10) operating with inadequate provisions for liquidity in relation to the volatility of Fremont's business lines and the kind and quality of assets held by Fremont; (11) marketing and extending adjustable-rate mortgage products to subprime borrowers in an unsafe and unsound manner that greatly increases the risk that borrowers will default on the loans or otherwise cause losses to Fremont, including (a) adjustable-rate mortgage products that qualify borrowers for loans with low initial payments based on an introductory rate that will expire after an initial period, without adequate analysis of the borrower's ability to repay at the fully indexed rate, (b) adjustable-rate mortgage products containing features likely to require frequent refinancing to maintain affordable monthly payment or to avoid foreclosure, and (c)loans or loan arrangements with loan-to-value ratios approaching or exceeding 100 percent of the value of the collateral; (12)making mortgage loans without adequately considering the borrower's ability to repay the mortgage according to its terms; (13)operating in violation of Section 23B of the Federal Reserve Act, in that Fremont engaged in transactions with its affiliates on terms and under circumstances that in good faith would not be offered to, or would not apply to, nonaffiliated companies; and (14) operating inconsistently with the Federal Deposit Insurance Corporation's Interagency Advisory on Mortgage Banking and Interagency Expanded Guidance for Subprime Lending Programs. The cease and desist order also requires Fremont to take a number of steps, including (1) having and retaining qualified management; (2) limiting Fremont General's and Fremont General Credit Corporation's representation on Fremont's board of directors and requiring that independent directors comprise a majority of Fremont's board of directors; (3) revising and implementing written lending policies to provide effective guidance and control over Fremont's residential lending function; (4)revising and implementing policies governing communications with consumers to ensure that borrowers are provided with sufficient information; (5) implementing control systems to monitor whether Fremont's actual practices are consistent with its policies and procedures; (6) implementing a third-party mortgage broker monitoring program and plan; (7) developing a five-year strategic plan, including policies and procedures for diversifying Fremont's loan portfolio; (8) implementing a policy covering Fremont's capital analysis on subprime residential loans; (9) performing quarterly valuations and cash flow analyses on Fremont's residual interests and mortgage servicing rights from its residential lending operation, and obtaining annual independent valuations of such interests and rights; (10) limiting extensions of credit to certain commercial real estate borrowers; (11) implementing a written lending and collection policy to provide effective guidance and control over Fremont's commercial real estate lending function, including a planned material reduction in the volume of funded and unfunded nonrecourse lending and loans for condominium conversion and construction as a percentage of Tier I capital; (12) submitting a capital plan that will include a Tier I capital ratio of not less than 14% of Fremont's total assets; (13) implementing a written profit plan; (14) limiting the payment of cash dividends by Fremont without the prior written consent of the Federal Deposit Insurance Corporation and the Commissioner of the California Department of Financial Institutions; (15) implementing a written liquidity and funds management policy to provide effective guidance and control over Fremont's liquidity position and needs; (16) prohibiting the receipt, renewal or rollover of brokered deposit accounts without obtaining a Brokered Deposit Waiver approved by the Federal Deposit Insurance Corporation; (17) reducing adversely classified assets; and (18) implementing a comprehensive plan for the methodology for determining the adequacy of the allowance for loan and lease losses. Further, Fremont General is analyzing, in connection with the preparation of Fremont General's consolidated financial statements as of and for the period ended December 31, 2006, the Federal Deposit Insurance Corporation's criticism with respect to Fremont General's methodology for determining the carrying value of Fremont General's residential real estate loans held for sale. In addition, on March 5, 2007, Moody's Investors Service, Inc. downgraded Fremont's residential primary servicer rating for subprime mortgage loans to "SQ4+" from "SQ3+" and placed such rating on review for possible further downgrade and on March 6, 2007, Fitch Ratings, Inc. downgraded Fremont's residential primary servicer rating for subprime mortgage loans to "RPS4" from "RPS3+" and placed such rating on "Watch Negative", indicating that further downgrades of such rating are possible. Ownit Mortgage Solutions, Inc. Ownit Mortgage Solutions, Inc. ("Ownit") is a debtor and debtor-in-possession under Chapter 11 of the Bankruptcy Code in Case No. 06-12579. Ownit's Schedules of Assets and Liabilities and Statement of Financial Affairs, which are on file with the Bankruptcy Court, contain lists of certain known claims and potential claims against Ownit as of December 28, 20006, the date that Ownit commenced its Chapter 11 case. Item 1119 of Regulation AB, Affiliations and Certain Relationships and Related Transactions. No applicable updates. Item 1122 of Regulation AB, Compliance with Applicable Servicing Criteria. This report on Form 10-K omits the Item 1122 attestation report (the "Attestation Report") required by Regulation AB for Fremont Investment & Loan ("Fremont"), an interim servicer under the pooling and servicing agreement.Fremont's obligations as an interim servicer expired on April 1, 2006 upon the transfer of servicing in accordance with the terms of the transaction documents. Fremont has informed the Registrant that the original accounting firm that was scheduled to deliver the Attestation Report by March 31, 2007 informed Fremont that it was resigning from its engagement during the last week of March. The Registrant requested from Fremont a letter from its original accounting firm stating that an opinion cannot be expressed regarding Fremont's Assessment of Compliance, but was informed by Fremont that the accounting firm would not deliver such an opinion. The Registrant has been informed that Fremont is in the process of engaging a new accounting firm to prepare its Attestation Report, but will not have the Attestation Report available on or prior to the extended Form 10-K filing deadline. The Registrant will file the Attestation Report by Form 10-K/A as soon as it is received from Fremont. Pending receipt by the Registrant of the Attestation Report from Fremont's new accounting firm, there are no further actions that the Registrant could take in order to be in a position to file a compliant Attestation Report by the extended Form 10-K filing deadline, and accordingly the Registrant is unable to file a compliant Attestation Report by the extended Form 10-K filing deadline without unreasonable effort or expense. Fremont is not an affiliate of the Registrant. The 1122 statements for First American Real Estate Solutions of Texas, L.P. (as Sub-Contractor for Ocwen Loan Servicing, LLC) has disclosed the following material instance of noncompliance with the servicing criteria set forth in Item 1122(d)(2)(vii)(B) of Regulation AB applicable to the Company during year ended December 31, 2006. Account reconciliations for all asset-backed securities related bank accounts were not prepared within 30 calendar days after the bank statement cutoff date, or such other number of days specified in the transaction agreements as required by Item 1122(d)(2)(vii)(B) of Regulation AB. The 1122 statements for Wells Fargo Bank, National Association (Corporate Trust Services) has disclosed material noncompliance with criterion 1122(d)(3)(i), as applicable to the Company during the twelve months ended December 31, 2006. Certain monthly investor or remittance reports included errors in the calculation and/or the reporting of delinquencies for the pool assets. The 1122 statements for Wells Fargo Bank, N.A. (servicer) has disclosed the following instances of material noncompliance with certain servicing criteria applicable to the Company during the year ended December 31, 2006: 1. 1122(d)(3)(i) - Delinquency Reporting - The Company provided incomplete data to some third parties who use such data to calculate delinquency ratios and determine the status of loans with respect to bankruptcy, foreclosure or real estate owned. Instead of the actual due date being provided for use in calculating delinquencies, the date of the first payment due to the security was provided. 2. 1122(d)(4)(vii) - Notification of Intent to Foreclose - The Company, as required by certain servicing agreements, did not provide investors with prior notification of intent to foreclose. See Item 15. Item 1123 of Regulation AB, Servicer Compliance Statement. See Item 15. PART IV Item 15. Exhibits, Financial Statement Schedules. (a) Exhibits (4) Pooling and Servicing Agreement, dated as of February 1, 2006, among ACE Securities Corp., as depositor, Ocwen Loan Servicing, LLC, as a servicer, Wells Fargo Bank, N.A., as a servicer, Wells Fargo Bank, N.A., master servicer and securities administrator and HSBC Bank USA, National Association, as trustee (incorporated herein by reference from Exhibit 4.1 of the Current Report on Form 8-K of the registrant, as filed with the Commission). (31) Rule 13a-14(d)/15d-14(d) Certifications. (33) Reports on assessment of compliance with servicing criteria for asset-backed securities. a) Assurant Inc. as Sub-Contractor for Ocwen Loan Servicing, LLC, as Sub-Contractor b) Deutsche Bank National Trust Company, as Custodian c) First American Real Estate Solutions of Texas, L.P. as Sub-Contractor for Ocwen Loan Servicing, LLC, as Sub-Contractor d) Fremont Investment & Loan, as Servicer e) LandAmerica Tax and Flood Services as Sub-Contractor for Fremont Investment & Loan, as Sub-Contractor f) Ocwen Loan Servicing, LLC, as Servicer g) Regulus Group LLC as Sub-Contractor for Ocwen Loan Servicing, LLC, as Sub-Contractor h) Regulus Group LLC as Sub-Contractor for Wells Fargo Bank, N.A., as Sub-Contractor i) Wells Fargo Bank, N.A., as Servicer j) Wells Fargo Bank, N.A., as Master Servicer k) Wells Fargo Bank, N.A., as Securities Administrator l) Wells Fargo Bank, N.A., as Paying Agent m) Wells Fargo Bank, N.A., as Custodian n) ZC Sterling Insurance Agency, Inc. as Sub-Contractor for Wells Fargo Bank, N.A., as Sub-Contractor
(34) Attestation reports on assessment of compliance with servicing criteria for asset-backed securities. a) Assurant Inc. as Sub-Contractor for Ocwen Loan Servicing, LLC, as Sub-Contractor b) Deutsche Bank National Trust Company, as Custodian c) First American Real Estate Solutions of Texas, L.P. as Sub-Contractor for Ocwen Loan Servicing, LLC, as Sub-Contractor d) LandAmerica Tax and Flood Services as Sub-Contractor for Fremont Investment & Loan, as Sub-Contractor e) Ocwen Loan Servicing, LLC, as Servicer f) Regulus Group LLC as Sub-Contractor for Ocwen Loan Servicing, LLC, as Sub-Contractor g) Regulus Group LLC as Sub-Contractor for Wells Fargo Bank, N.A., as Sub-Contractor h) Wells Fargo Bank, N.A., as Servicer i) Wells Fargo Bank, N.A., as Master Servicer j) Wells Fargo Bank, N.A., as Securities Administrator k) Wells Fargo Bank, N.A., as Paying Agent l) Wells Fargo Bank, N.A., as Custodian m) ZC Sterling Insurance Agency, Inc. as Sub-Contractor for Wells Fargo Bank, N.A., as Sub-Contractor
(35) Servicer compliance statement. a) Fremont Investment & Loan, as Servicer b) Ocwen Loan Servicing, LLC, as Servicer c) Wells Fargo Bank, N.A., as Servicer d) Wells Fargo Bank, N.A., as Master Servicer e) Wells Fargo Bank, N.A., as Securities Administrator
(b) Not applicable. (c) Omitted. Filed herewith. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ACE Securities Corp. Home Equity Loan Trust, Series 2006-HE1 (Issuing Entity) /s/ Douglas K. Johnson Douglas K. Johnson, President Date: April 17, 2007 Exhibit Index Exhibit No. (31) Rule 13a-14(d)/15d-14(d) Certifications. (33) Reports on assessment of compliance with servicing criteria for asset-backed securities. a) Assurant Inc. as Sub-Contractor for Ocwen Loan Servicing, LLC, as Sub-Contractor b) Deutsche Bank National Trust Company, as Custodian c) First American Real Estate Solutions of Texas, L.P. as Sub-Contractor for Ocwen Loan Servicing, LLC, as Sub-Contractor d) Fremont Investment & Loan, as Servicer e) LandAmerica Tax and Flood Services as Sub-Contractor for Fremont Investment & Loan, as Sub-Contractor f) Ocwen Loan Servicing, LLC, as Servicer g) Regulus Group LLC as Sub-Contractor for Ocwen Loan Servicing, LLC, as Sub-Contractor h) Regulus Group LLC as Sub-Contractor for Wells Fargo Bank, N.A., as Sub-Contractor i) Wells Fargo Bank, N.A., as Servicer j) Wells Fargo Bank, N.A., as Master Servicer k) Wells Fargo Bank, N.A., as Securities Administrator l) Wells Fargo Bank, N.A., as Paying Agent m) Wells Fargo Bank, N.A., as Custodian n) ZC Sterling Insurance Agency, Inc. as Sub-Contractor for Wells Fargo Bank, N.A., as Sub-Contractor
(34) Attestation reports on assessment of compliance with servicing criteria for asset-backed securities. a) Assurant Inc. as Sub-Contractor for Ocwen Loan Servicing, LLC, as Sub-Contractor b) Deutsche Bank National Trust Company, as Custodian c) First American Real Estate Solutions of Texas, L.P. as Sub-Contractor for Ocwen Loan Servicing, LLC, as Sub-Contractor d) LandAmerica Tax and Flood Services as Sub-Contractor for Fremont Investment & Loan, as Sub-Contractor e) Ocwen Loan Servicing, LLC, as Servicer f) Regulus Group LLC as Sub-Contractor for Ocwen Loan Servicing, LLC, as Sub-Contractor g) Regulus Group LLC as Sub-Contractor for Wells Fargo Bank, N.A., as Sub-Contractor h) Wells Fargo Bank, N.A., as Servicer i) Wells Fargo Bank, N.A., as Master Servicer j) Wells Fargo Bank, N.A., as Securities Administrator k) Wells Fargo Bank, N.A., as Paying Agent l) Wells Fargo Bank, N.A., as Custodian m) ZC Sterling Insurance Agency, Inc. as Sub-Contractor for Wells Fargo Bank, N.A., as Sub-Contractor
(35) Servicer compliance statement. a) Fremont Investment & Loan, as Servicer b) Ocwen Loan Servicing, LLC, as Servicer c) Wells Fargo Bank, N.A., as Servicer d) Wells Fargo Bank, N.A., as Master Servicer e) Wells Fargo Bank, N.A., as Securities Administrator
EX-31 Rule 13a-14(d)/15d-14(d) Certifications I, Douglas K. Johnson, certify that: 1. I have reviewed this report on Form 10-K and all reports on Form 10-D required to be filed in respect of the period covered by this report on Form 10-K of ACE Securities Corp. Home Equity Loan Trust, Series 2006-HE1 (the "Exchange Act periodic reports"); 2. Based on my knowledge, the Exchange Act periodic reports, taken as a whole, do not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, all of the distribution, servicing and other information required to be provided under Form 10-D for the period covered by this report is included in the Exchange Act periodic reports; 4. I am responsible for reviewing the activities performed by the servicers and based on my knowledge and the compliance reviews conducted in preparing the servicer compliance statements required in this report under Item 1123 of Regulation AB, and except as disclosed in the Exchange Act periodic reports, the servicers have fulfilled their obligations under the servicing agreements; and 5. All of the reports on assessment of compliance with servicing criteria for asset-backed securities and their related attestation reports on assessment of compliance with servicing criteria for asset-backed securities required to be included in this report in accordance with Item 1122 of Regulation AB and Exchange Act Rules 13a-18 and 15d-18 have been included as an exhibit to this report, except as otherwise disclosed in this report. Any material instances of noncompliance described in such reports have been disclosed in this report on Form 10-K. In giving the certifications above, I have reasonably relied on information provided to me by the following unaffiliated parties: Fremont Investment & Loan as Servicer, Greenpoint Mortgage Funding, Inc. as Servicer, New Century Mortgage Corporation as Servicer, Ocwen Loan Servicing, LLC as Servicer and Wells Fargo Bank, N.A. as Servicer, Master Servicer and Securities Administrator. Dated: April 17, 2007 /s/ Douglas K. Johnson Signature President Title EX-33 (a) REPORT ON ASSESSMENT OF COMPLIANCE WITH SECTION 1122(d)(2)(vi) and SECTION 1122(d)(4)(xi) of REGULATION AB SERVICING CRITERIA American Security Insurance Company, Standard Guaranty Insurance Company and Safeco Financial Institution Solutions, Inc. (affiliates of Assurant Inc., collectively the "Asserting Party") is responsible for assessing compliance as of December 31, 2006 and for the period from January 1, 2006 through December 31, 2006 (the "Reporting Period") with the servicing criteria set forth in Section 1122(d)(2)(vi), Section 1122(d)(4)(xi) and Section 1122(d)(4)(xii) of Title 17, Section 229.1122(d) of the Code of Federal Regulations, which the Asserting Party has concluded are applicable to the insurance escrow servicing activities it performs with respect to all mortgage loan-tracking transactions covered by this report. The transactions covered by this report include all mortgage loan-tracking transactions for which the Asserting Party served as a Vendor on behalf of Servicers for such asset-backed securities transactions that were registered after January 1, 2006 with the Securities and Exchange Commission pursuant to the Securities Act of 1933 (the "Platform"). The scope of the Asserting Party assertions excludes Section 1122(d)(4)(xii) of Title 17, Section 229.1122(d) of the Code of Federal Regulations, which relates to servicing activities that are performed by the Asserting Party with respect to the Platform, but are not reported on herein. The Asserting Party has assessed its compliance with Section 1122(d)(2)(vi) and Section 1122(d)(4)(xi) ("the Applicable Servicing Criteria") for the Reporting Period and has concluded that the Asserting Party has complied, in all material respects, with the Applicable Servicing Criteria for the Reporting Period with respect to the Platform taken as a whole. The Asserting Party used the criteria set forth in paragraph (d) of Item 1122 of Regulation AB to assess the compliance with the Applicable Servicing Criteria. The Asserting Party has complied, in all material respects, with the Applicable Servicing Criteria for the Reporting Period. PricewaterhouseCoopers LLP, an independent registered public accounting firm, has issued an attestation report on the assessment of compliance with the Applicable Servicing Criteria as of and for the Reporting Period ending December 31, 2006 as set forth in this assertion. American Security Insurance Company Standard Guaranty Insurance Company Safeco Financial Institution Solutions, Inc. By: /s/ John Frobose John Frobose Senior Vice President Date: February 23, 2007 (page) ANNUAL CERTIFICATION Re: Servicing-Related Activities subject to Regulation AB provided by American Security Insurance Company, Standard Guaranty Insurance Company and/or Safeco Financial Institution Solutions, Inc. (the "Vendor") to Ocwen Loan Servicing, LLC (the "Servicer") I, John Frobose, a Senior Vice President of the Vendor, as a provider of certain servicing-related activities to the Servicer for the twelve month period ending December 31, 2006 (the "Reporting Period"), hereby certify to the Servicer, and its officers, directors and affiliates, and with the knowledge and intent that they will rely upon this certification, that: 1. I have reviewed the report on the assessment of the Vendor's compliance with the servicing criteria set forth in Item 1122(d) of Regulation AB that are applicable to the Vendor for the Reporting Period (the "Applicable Servicing Criteria"), provided in accordance with Rules 13a-18 and 15d-18 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Item 1122(d) of Regulation AB (the "Vendor Assessment"), and the registered public accounting firm's attestation report provided in accordance with Rules 13a-18 and 15d-18 under the Exchange Act and Item 1122(b) of Regulation AB for the Reporting Period (the "Attestation Report"), (collectively, the "Vendor Information"); 2. Based on my knowledge, the Vendor Information, taken as a whole, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading; 3. Based on my knowledge, all of the Vendor Information required to be provided to the Servicer by the Vendor pursuant to Regulation AB has been provided to the Servicer; 4. I am responsible for reviewing the Applicable Servicing Criteria performed by the Vendor, and except as disclosed in the Vendor Assessment or the Attestation Report, the Vendor has fulfilled its obligations pursuant to Regulation AB in all material respects; and 5. The Vendor Assessment and the Attestation Report required to be provided to the Servicer have been provided to the Servicer. Any material instance of non-compliance described in such Vendor Assessment or Attestation Report has been disclosed to the Servicer. Any material instance of non-compliance with the Applicable Servicing Criteria has been disclosed in such Vendor Assessment or Attestation Report. American Security Insurance Company Standard Guaranty Insurance Company Safeco Financial Institution Solutions, Inc. By: /s/ John Frobose Name: John Frobose Title: Senior Vice President EX-33 (b) Appendix I MANAGEMENT'S ASSERTION OF COMPLIANCE Management of the Trust & Securities Services department of Deutsche Bank National Trust Company and Deutsche Bank Trust Company Americas (collectively the "Company") is responsible for assessing compliance with the servicing criteria set forth in Item 1122(d) of Regulation AB promulgated by the Securities and Exchange Commission. Management has determined that the servicing criteria are applicable in regard to the servicing platform for the period as follows: Platform: Publicly-issued (i.e., transaction-level reporting required under the Securities Exchange Act of 1934, as amended) residential mortgage -backed securities and other asset-backed securities issued on or after January 1, 2006 for which the Company provides trustee, securities administration or paying agent services, excluding any publicly issued transactions sponsored or issued by any government sponsored entity (the "Platform"). Applicable Servicing Criteria: All servicing criteria set forth in Item 1122(d), except for the following criteria: 1122(d)(2)(iii),1122(d)(4)(iv), 1122(d)(4)(v), 1122(d)(4)(vi), 1122(d)(4)(vii), 1122(d)(4)(viii), 1122(d)(4) (ix), 1122(d)(4)(x), 1122(d)(4)(xi), 1122(d)(4)(xii), 1122(d)(4)(xiii) and 1122 (d)(4)(xiv), which management has determined are not applicable to the activities the Company performs with respect to the Platform (the "Applicable Servicing Criteria"). Period: Twelve months ended December 31, 2006 (the "Period"). Management's interpretation of Applicable Servicing Criteria: The Company's management has determined that servicing criteria 1122(d)(1)(iii) is applicable only with respect to its continuing obligation to act as, or locate a, successor servicer under the circumstances referred to in certain governing documents. It is management's interpretation that Deutsche Bank Trust Company America has no other active back-up servicing responsibilities in regards to 1122(d)(1)(iii) as of and for the Period. Third parties classified as vendors: With respect to servicing criteria 1122(d) (2)(i), 1122(d)(4)(i), and 1122(d)(4)(ii), management has engaged various vendors to perform the activities required by these servicing criteria. The Company's management has determined that these vendors are not considered a "servicer" as defined in Item 1101(j) of Regulation AB, and the Company's management has elected to take responsibility for assessing compliance with the servicing criteria applicable to each vendor as permitted by Interpretation 17.06 of the SEC Division of Corporation Finance Manual of Publicly Available Telephone Interpretations ("Interpretation 17.06"). As permitted by Interpretation 17.06, management has asserted that it has policies and procedures in place to provide reasonable assurance that the vendor's activities comply in all material respects with the servicing criteria applicable to each vendor. The Company's management is solely responsible for determining that it meets the SEC requirements to apply Interpretation 17.06 for the vendors and related criteria. With respect to the Platform, the Company's management provides the following assertion of compliance with respect to the Applicable Servicing Criteria: 1. The Company's management is responsible for assessing the Company's compliance with the Applicable Servicing Criteria as of and for the Period. 2.The Company's management has assessed compliance with the Applicable Servicing Criteria, including servicing criteria for which compliance is determined based on Interpretation 17.06 as described above, as of and for the Period. In performing this assessment, management used the criteria set forth by the Securities and Exchange Commission in paragraph (d) of Item 1122 of Regulation AB. 3. Based on such assessment, as of and for the Period, the Company has complied, in all material respects, with the Applicable Servicing Criteria. KPMG LLP, a registered public accounting firm, has issued an attestation report with respect to the management's assertion of compliance with the Applicable Servicing Criteria as of and for the Period. (page) Appendix I DEUTSCHE BANK NATIONAL TRUST COMPANY By: /s/ Gary R. Vaughan Name: Gary R. Vaughan Its: Managing Director By: /s/ David Co Name: David Co Its: Director By: /s/ Jose Sicilia Name: Jose Sicilia Its: Managing Director By: /s/ Kevin Fischer Name: Kevin Fischer Its: Vice President By: /s/ Robert Frier Name: Robert Frier Its: Director DEUTSCHE BANK TRUST COMPANY AMERICAS By: /s/ Kevin C. Weeks Name: Kevin C. Weeks Its: Managing Director By: /s/ Jenna Kaufman Name: Jenna Kaufman Its: Director EX-33 (c) REPORT ON ASSESSMENT OF COMPLIANCE First American Real Estate Solutions of Texas, L.P. (an indirect subsidiary of The First American Corporation, and the "Asserting Party") is responsible for assessing compliance as of December 31, 2006, and for the period from January 1, 2006 through December 31, 2006 (the "Reporting Period") with the servicing criteria set forth in Title 17, Sections 229.1122(d)(1)(iv), (d)(2)(v), (d)(2)(vi), (d)(2)(vii), (d)(4)(xi), (d)(4)(xii) and (d)(4)(xiii) of the Code of Federal Regulations (the "CFR") applicable to the Asserting Party (the "Applicable Servicing Criteria"). The transactions covered by this report include all loans for residential mortgage loan outsourcing customers for which the Asserting Party served as the residential tax service provider (the "Platform"). The Asserting Party has assessed its compliance with the Applicable Servicing Criteria for the Reporting Period and has concluded that, except as set forth hereinbelow, the Asserting Party has complied, in all material respects, with the Applicable Servicing Criteria as of December 31, 2006, and for the Reporting Period with respect to the Platform taken as a whole. The Asserting Party assessed its compliance with the Applicable Servicing Criteria for the Reporting Period and has identified a material instance of noncompliance with the servicing criterion set forth in Section 229.1122(d)(2)(vii)(B) of the CFR with respect to the Platform. Specifically, the Asserting Party did not prepare reconciliations for all asset-backed securities related bank accounts within 30 calendar days after the bank statement cut-off date or such number of days specified in the transaction agreements. PricewaterhouseCoopers LLP, an independent registered public accounting firm, has issued an attestation report on the assessment of compliance with the Applicable Servicing Criteria as of December 31, 2006, and for the Reporting Period as set forth in this assertion. FIRST AMERICAN REAL ESTATE SOLUTIONS OF TEXAS, L.P. By: First American Real Estate Solutions LLC General Partner /s/ Lucy A. Przybyla Lucy A. Przybyla Senior Vice President February 28, 2007 EX-33 (d) (logo) FREMONT INVESTMENT & LOAN Management's Assertion on Compliance with the Specified Minimum Servicing Standards Set Forth in the Regulation AB Report of Management We, as members of management of Fremont Investment & Loan (the "Company"), are responsible for complying with the minimum servicing standards identified in the attached Exhibit A (the "specified minimum servicing standards") as set forth in Regulation AB. We are also responsible for establishing and maintaining effective internal control over compliance with these specified minimum servicing standards. We have performed an evaluation of the Company's compliance with the specified minimum servicing standards as of December 31, 2006 and for the year then ended. Based on this evaluation, we assert that during the year ended December 31, 2006, the Company complied, in all material respects, with the specified minimum servicing standards, except as described below. The specified minimum servicing standards require that payments received by borrowers be remitted to the appropriate accounts maintained pursuant to the transaction documents. During the year ended December 31, 2006, 709 payments were not remitted to the appropriate collection accounts in a timely manner. Upon review of the 709 payment not remitted to the appropriate collection account and the total number of payments processed during 2006 of 1,377,091, the 709 payments represent .060% of the total number of loan payment received by FIL during 2006. Therefore, management has concluded this error is immaterial and a non-reportable occurrence. In addition, the specified minimum servicing standards require the proper adjustment of an adjustable rate mortgage loan pursuant to the terms of the related mortgage note. During the year ended December 31, 2006, one rate adjustment for a mortgage loan covered under the Servicemembers Civil Relief Act, as amended, was suppressed and the rate was not reset to the correct adjusted rate in a timely manner. Upon review of this exception, we noted that for the year ended December 31, 2006, a total of only 46 mortgage loans were subject to the Servicemembers Civil Relief Act, as amended, as compared to a total number of mortgage loans serviced by Fremont of approximately 1.3 million for the year ended December 31, 2006. Therefore, management has concluded this error to be immaterial and a non-reportable occurrence. We therefore concluded that the Company complied with the specified minimum servicing standards in all material respects. As of December 31, 2006 and for the year then ended, the Company had in effect a fidelity bond in the amount of $30,000,000 and an errors and omissions policy in the amount $10,000,000. /s/ Kyle R. Walker Kyle R. Walker President and Chief Executive Officer /s/ David S. Gordon David S. Gordon Senior Vice President, Loan Administration & Servicing /s/ John Alkire John Alkire Senior Vice President, Loan Servicing February 28, 2007 LEGAL * 2727 E. IMPERIAL HWY * BREA, CA 92821 Member FDIC * Serving our customers since 1937 (page) (logo) FREMONT INVESTMENT & LOAN Certification Regarding Compliance with Applicable Servicing Criteria 1. Fremont Investment & Loan (the "Servicer") is responsible for assessing compliance by it with the servicing criteria applicable to it under paragraph (d) of Item 1122 of Regulation AB as set forth in Exhibit A hereto in connection with asset-backed securities transactions involving first lien residential mortgage loans listed on Exhibit B hereto; 2. The Servicer has engaged certain vendors (the "Vendors") to perform specific, limited or scripted activities as of and for the period ending December 31, 2006, and the Servicer elects to take responsibility for assessing compliance with the servicing criteria or portion of the servicing criteria applicable to such Vendors as set forth in Exhibit A hereto, except with respect to certain services done by LandAmerica, as covered in their Report on Assessment of Compliance attached hereto as Exhibit C; 3. Except as set forth in paragraph 4 below, the Servicer used the criteria set forth in paragraph (d) of Item 1122 of Regulation AB to assess the compliance with the applicable servicing criteria; 4. The criteria on Exhibit A hereto described as inapplicable to the Servicer based on the activities it performs with respect to asset-backed securities transactions involving first lien residential mortgage loans has not been certified pursuant to this certification; 5. The Servicer has complied, in all material respects, with the applicable servicing criteria as of and for the period ending December 31, 2006; 6. The Servicer has not identified and is not aware of any material instance of noncompliance by the Vendors with the applicable servicing criteria as of and for the period ending December 31, 2006; 7. The Servicer has not identified any material deficiency in its policies and procedures to monitor the compliance by the Vendors with the applicable servicing criteria for the period ending December 31, 2006; and 8. A registered public accounting firm has issued an attestation report on the Servicer's assessment of compliance with the applicable servicing criteria as of and for the period ending December 31, 2006, which attestation report is included on Exhibit D attached hereto. February 28, 2007 Fremont Investment & Loan By: /s/ John Alkire John Alkire Senior Vice President, Loan Servicing LEGAL * 2727 E. IMPERIAL HWY * BREA, CA 92821 Member FDIC * Serving our customers since 1937 (page) EXHIBIT A SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE The assessment of compliance to be delivered by the Servicer shall address, at a minimum, the criteria identified as below as "Applicable Servicing Criteria."
APPLICABLE SERVICING CRITERIA SERVICING CRITERIA Reference Criteria General Servicing Considerations 1122(d)(1)(i) Policies and procedures are instituted to monitor any performance or other X triggers and events of default in accordance with the transaction agreements. 1122(d)(1)(ii) If any material servicing activities are outsourced to third parties, X policies and procedures are instituted to monitor the third party's performance and compliance with such servicing activities. 1122(d)(1)(iii) Any requirements in the transaction agreements to maintain a back-up N/A servicer for the mortgage loans are maintained. 1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in effect on the party X participating in the servicing function throughout the reporting period in the amount of coverage required by and otherwise in accordance with the terms of the transaction agreements. Cash Collection and Administration 1122(d)(2)(i) Payments on mortgage loans are deposited into the appropriate custodial X bank accounts and related bank clearing accounts no more than two business days following receipt, or such other number of days specified in the transaction agreements. 1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an obligor or to an X investor are made only by authorized personnel. 1122(d)(2)(iii) Advances of funds or guarantees regarding collections, cash flows or X distributions, and any interest or other fees charged for such advances, are made, reviewed and approved as specified in the transaction agreements. 1122(d)(2)(iv) The related accounts for the transaction, such as cash reserve accounts or X accounts established as a form of overcollateralization, are separately maintained (e.g., with respect to commingling of cash) as set forth in the transaction agreements. 1122(d)(2)(v) Each custodial account is maintained at a federally insured depository X institution as set forth in the transaction agreements. For purposes of this criterion, "federally insured depository institution" with respect to a foreign financial institution means a foreign financial institution that meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange Act. 1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent unauthorized access. X 1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for all asset-backed X securities related bank accounts, including custodial accounts and related bank clearing accounts. These reconciliations are (A) mathematically accurate; (B) prepared within 30 calendar days after the bank statement cutoff date, or such other number of days specified in the transaction agreements; (C) reviewed and approved by someone other than the person who prepared the reconciliation; and (D) contain explanations for reconciling items. These reconciling items are resolved within 90 calendar days of their original identification, or such other number of days specified in the transaction agreements. (page) APPLICABLE SERVICING CRITERIA SERVICING CRITERIA Reference Criteria Investor Remittances and Reporting 1122(d)(3)(i) Reports to investors, including those to be filed with the Commission, are X maintained in accordance with the transaction agreements and applicable Commission requirements. Specifically, such reports (A) are prepared in accordance with timeframes and other terms set forth in the transaction agreements; (B) provide information calculated in accordance with the terms specified in the transaction agreements; (C) are filed with the Commission as required by its rules and regulations; and (D) agree with investors' or the trustee's records as to the total unpaid principal balance and number of mortgage loans serviced by the Servicer. 1122(d)(3)(ii) Amounts due to investors are allocated and remitted in accordance with X timeframes, distribution priority and other terms set forth in the transaction agreements, 1122(d)(3)(iii) Disbursements made to an investor are posted within two business days to X the Servicer's investor records, or such other number of days specified in the transaction agreements. 1122(d)(3)(iv) Amounts remitted to investors per the investor reports agree with cancelled X checks, or other form of payment, or custodial bank statements. Pool Asset Administration 1122(d)(4)(i) Collateral or security on mortgage loans is maintained as required by the X transaction agreements or related mortgage loan documents. 1122(d)(4)(ii) Mortgage loan and related documents are safeguarded as required by the X transaction agreements 1122(d)(4)(iii) Any additions, removals or substitutions to the asset pool are made, X reviewed and approved in accordance with any conditions or requirements in the transaction agreements. 1122(d)(4)(iv) Payments on mortgage loans, including any payoffs, made in accordance with X the related mortgage loan documents are posted to the Servicer's obligor records maintained no more than two business days after receipt, or such other number of days specified in the transaction agreements, and allocated to principal, interest or other items (e.g., escrow) in accordance with the related mortgage loan documents. 1122(d)(4)(v) The Servicer's records regarding the mortgage loans agree with the X Servicer's records with respect to an obligor's unpaid principal balance. 1122(d)(4)(vi) Changes with respect to the terms or status of an obligor's mortgage loans X (e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in accordance with the transaction agreements and related pool asset documents. 1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance plans, modifications X and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and concluded in accordance with the timeframes or other requirements established by the transaction agreements. 1122(d)(4)(viii) Records documenting collection efforts are maintained during the period a X mortgage loan is delinquent in accordance with the transaction agreements. Such records are maintained on at least a monthly basis, or such other period specified in the transaction agreements, and describe the entity's activities in monitoring delinquent mortgage loans including, for example, phone calls, letters and payment rescheduling plans in cases where delinquency is deemed temporary (e.g., illness or unemployment). 1122(d)(4)(ix) Adjustments to interest rates or rates of return for mortgage loans with X variable rates are computed based on the related mortgage loan documents. (page) APPLICABLE SERVICING CRITERIA SERVICING CRITERIA Reference Criteria 1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as escrow accounts): X (A) such funds are analyzed, in accordance with the obligor's mortgage loan documents, on at least an annual basis, or such other period specified in the transaction agreements; (B) Interest on such funds is paid, or credited, to obligors in accordance with applicable mortgage loan documents and state laws; and (C) such funds are returned to the obligor within 30 calendar days of full repayment of the related mortgage loans, or such other number of days specified in the transaction agreements. 1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or insurance payments) X are made on or before the related penalty or expiration dates, as indicated on the appropriate bills or notices for such payments, provided that such support has been received by the servicer at least 30 calendar days prior to these dates, or such other number of days specified in the transaction agreements, 1122(d)(4)(xii) Any late payment penalties in connection with any payment to be made on X behalf of an obligor are paid from the servicer's funds and not charged to the obligor, unless the late payment was due to the obligor's error or omission. 1122(d)(4)(xiii) Disbursements made on behalf of an obligor are posted within two business X days to the obligor's records maintained by the servicer, or such other number of days specified in the transaction agreements. 1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts are recognized and X recorded in accordance with the transaction agreements. 1122(d)(4)(xv) Any external enhancement or other support, identified in Item 1114(a)(1) N/A through (3) or Item 1115 of Regulation AB, is maintained as set forth in the transaction agreements.
(page) (logo) FREMONT INVESTMENT & LOAN EXHIBIT B FREMONT * 2006-A * 2006-B * 2006-C * 2006-D * 2006-E * 2005-A * 2005-B * 2005-C * 2005-D * 2005-E * 2004-A * 2004-B * 2004-C * 2004-D * 2003-A * 2003-B CARRINGTON * 2005-FRE1 * 2006-FRE1 * 2006-FRE2 CREDIT SUISSE DLJ/CSFB * CSFB 2004-FRE1 DEUTSCHE * ACE-2006FM1 * Interim - ACE-2006FM2 * Interim - ACE-2006HE1 GREENWICH * Interim - Fremont Home Loan Trust 2006-1 * Fremont Home Loan Trust 2006-2 * Interim - Fremont Home Loan Trust 2006-3 GOLDMAN SACHS * GSAMP 2006-FM2 * GSAMP 2006-FM3 * Interim - GSAMP 2006-HE2 * Interim - GSAMP 2006-HE3 SOCIETE GENERAL * Interim - SGMS 2006-FRE2 LEGAL * 2727 E. IMPERIAL HWY * BREA, CA 92821 Member FDIC * Serving our customers since 1937 (page) EXHIBIT 1 FREMONT * Fremont Home Loan Trust 2006-A pursuant to a Pooling & Servicing Agreement dated May 1, 2006, among Financial Asset Securities Corp as Depositor, Fremont Investment & Loan as Sponsor, Wells Fargo Bank, N.A. as Master Servicer and HSBC Bank USA, National Association as Trustee * Fremont Home Loan Trust 2006-B pursuant to a Pooling & Servicing Agreement dated August 1, 2006, among Fremont Mortgage Securities Corporation as Depositor, Fremont Investment & Loan as Originator, Wells Fargo Bank, N.A. as Master Servicer and HSBC Bank USA, National Association as Trustee * Fremont Home Loan Trust 2006-C pursuant to a Pooling & Servicing Agreement dated September 1, 2006, among Fremont Mortgage Securities Corporation as Depositor, Fremont Investment & Loan as Originator, Wells Fargo Bank, N.A. as Master Servicer and HSBC Bank USA, National Association as Trustee * Fremont Home Loan Trust 2006-D pursuant to a Pooling & Servicing Agreement dated November 1, 2006, among Fremont Mortgage Securities Corporation as Depositor, Fremont Investment & Loan as Sponsor, Wells Fargo Bank, N.A. as Master Servicer and HSBC Bank USA, National Association as Trustee * Fremont Home Loan Trust 2006-E pursuant to a Pooling & Servicing Agreement dated December 1, 2006, among Fremont Mortgage Securities Corporation as Depositor, Fremont Investment & Loan as Sponsor, Wells Fargo Bank, N.A. as Master Servicer and HSBC Bank USA, National Association as Trustee * Fremont Home Loan Trust 2005-A pursuant to a Pooling & Servicing Agreement dated February 1, 2005, among Fremont Mortgage Securities Corporation, Fremont Investment & Loan, Wells Fargo Bank, N.A. and HSBC Bank USA, National Association * Fremont Home Loan Trust 2005-B pursuant to a Pooling & Servicing Agreement dated May 1, 2005, among Fremont Mortgage Securities Corporation, Fremont Investment & Loan, Wells Fargo Bank, N.A. and HSBC Bank USA, National Association * Fremont Home Loan Trust 2005-C pursuant to a Pooling & Servicing Agreement dated July 1, 2005, among Fremont Mortgage Securities Corporation, Fremont Investment & Loan, Wells Fargo Bank, N.A. and HSBC Bank USA, National Association * Fremont Home Loan Trust 2005-D pursuant to a Pooling & Servicing Agreement dated November 1, 2005, among Fremont Mortgage Securities Corporation, Fremont Investment & Loan, Wells Fargo Bank, N.A. and HSBC Bank USA, National Association * Fremont Home Loan Trust 2005-E pursuant to a Pooling & Servicing Agreement dated December 1, 2005, among Fremont Mortgage Securities Corporation, Fremont Investment & Loan, Wells Fargo Bank, N.A. and HSBC Bank USA, National Association * Fremont Home Loan Trust 2004-A pursuant to a Pooling & Servicing Agreement dated February 1, 2004, among GS Mortgage Securities Corp., Fremont Investment & Loan, Wells Fargo Bank Minnesota, National Association and HSBC Bank USA * Fremont Home Loan Trust 2004-B pursuant to a Pooling & Servicing Agreement dated May 1, 2004, among Financial Asset Securities Corp., Fremont Investment & Loan, Wells Fargo Bank, N.A. and HSBC Bank USA * Fremont Home Loan Trust 2004-C pursuant to a Pooling & Servicing Agreement dated August 1, 2004, among Fremont Mortgage Securities Corporation, Fremont Investment & Loan, Wells Fargo Bank, N.A. and HSBC Bank USA, National Association * Fremont Home Loan Trust 2004-D pursuant to a Pooling & Servicing Agreement dated November 1, 2004, among Fremont Mortgage Securities Corporation, Fremont Investment & Loan, Wells Fargo Bank, N.A. and HSBC Bank USA, National Association * Fremont Home Loan Trust 2003-A pursuant to a Pooling & Servicing Agreement dated August 1, 2003, among Financial Asset Securities Corp., Fremont Investment & Loan, Wells Fargo Bank Minnesota, National Association and HSBC Bank USA * Fremont Home Loan Trust 2003-B pursuant to a Pooling & Servicing Agreement dated November 1, 2003, among Asset Backed Securities Corporation, Fremont Investment & Loan, Wells Fargo Bank Minnesota, National Association and HSBC Bank USA CARRINGTON * Carrington Mortgage Loan Trust 2005-FRE1 pursuant to a Pooling & Servicing Agreement dated October 1, 2005, among Stanwich Asset Acceptance Company, L.L.C., Deutsche Bank National Trust Company and Fremont Investment & Loan * Carrington Mortgage Loan Trust 2006-FRE1 pursuant to a Pooling & Servicing Agreement dated June 1, 2006, among Stanwich Asset Acceptance Company, L.L.C., Fremont Investment & Loan And Wells Fargo Bank, N.A. * Carrington Mortgage Loan Trust 2006-FRE2 pursuant to a Pooling & Servicing Agreement dated October 1, 2006, among Stanwich Asset Acceptance Company, L.L.C., Fremont Investment & Loan and Wells Fargo Bank, N.A. CREDIT SUISSE - DLJ/CSFB * CSFB Home Equity Pass-Through Certificates 2004-FRE1 pursuant to a Pooling & Servicing Agreement dated August 1, 2004, among Credit Suisse First Boston Mortgage Securities Corp., DLJ Mortgage Capital, INC., Fremont Investment & Loan, Wells Fargo Bank, N.A., The Murrayhill Company, and U.S. Bank National Association (REVISED - 3/22/07) (page) DEUTSCHE * ACE Securities Corp. Home Equity Loan Trust 2006 FM1 pursuant to a Pooling & Servicing Agreement dated August 1, 2006, among ACE Securities Corp., Fremont Investment & Loan, Wells Fargo Bank, N.A. and HSBC Bank USA, National Association * Interim - DB Structured Products, Inc Series 2006 FM2 pursuant to a Mortgage Loan Purchase and Interim Servicing Agreement dated May 1, 2004, among Fremont Investment & Loan and DB Structured Products, Inc. * Interim - DB Structured Products, Inc Series 2006 HE1 pursuant to Master Mortgage Loan Purchase and Interim Servicing Agreement dated May 1, 2004, among Fremont Investment & Loan and DB Structured Products, Inc. GREENWICH * Interim - Fremont Home Loan Trust 20061 pursuant to a Mortgage Loan Purchase and Interim Servicing Agreement dated December 1, 2005, among Financial Asset Securities Corp., Fremont Investment & Loan, Deutsche Bank National Trust Company and Wells Fargo Bank * Fremont Home Loan Trust 2006-2 pursuant to a Pooling & Servicing Agreement dated April 1, 2006, among Fremont Investment & Loan and Greenwich Capital Financial Products, Inc. * Interim - Fremont Home Loan Trust 2006-3 pursuant to a Mortgage Loan Purchase and Interim Servicing Agreement dated December 1, 2005, among Fremont Investment & Loan And Greenwich Capital Financial Products, Inc. GOLDMAN SACHS * GSAMP Trust 2006-FM2 pursuant to a Pooling & Servicing Agreement dated September 1, 2006, among GS Mortgage Securities Corp., Fremont Investment & Loan, Deutsche Bank National Trust Company and Wells Fargo Bank * GSAMP Trust 2006-FM3 pursuant to a Pooling & Servicing Agreement dated December 1, 2006, among GS Mortgage Securities Corp., Fremont Investment & Loan, Deutsche Bank National Trust Company and Wells Fargo Bank * Interim - GSAMP Trust 2006-HE2 pursuant to a Amended and Restated Flow Mortgage Loan Purchase and Warranties Agreement dated January 1, 2006, among Goldman Sachs Mortgage Company and Fremont Investment & Loan * Interim - GSAMP Trust 2006-HE3 pursuant to a Amended and Restated Flow Mortgage Loan Purchase and Warranties Agreement dated January 1, 2006, among Goldman Sachs Mortgage Company and Fremont Investment & Loan SOCIETE GENERAL * Interim - SG Mortgage Finance Corp. 2006-FRE2 pursuant to a Amended Mortgage Loan Purchase and Interim Servicing Agreement dated June 21, 2006, among Fremont Investment & Loan and SG Mortgage Finance Corp. (REVISED - 3/22/07) Exhibit 1 Page 2 EX-33 (e) Report on Assessment of Compliance with Regulation AB Servicing Criteria 1. The undersigned authorized officer of LandAmerica Tax and Flood Services, Inc. (the "Company") is responsible for assessing the Company's compliance with the applicable servicing criteria as defined in 17 CFR Part 229 Section 1122(d) (4) (xi) and 1122(d) (4) (xii) (the "Regulation AB Servicing Criteria") for residential mortgage backed securities for which the Company served as third-party property tax payment provider on the underlying collateral (the "Platform"). Except as set forth in the preceding sentence, the servicing criteria set forth in 17 CFR Part 229 Section 1122(d) are not applicable to the activities the Company performed with respect to the Platform. 2. The Company used the criteria in 17 CFR Part 229 Section 1122(d) to assess the compliance with the Regulation AB Servicing Criteria. 3. Under one of the services offered by the Company, some customers may elect to remit tax payments directly to tax agencies without having the Company remit those property tax payments through our tax payment service. We refer to these customers as "non-outsourced servicer customers." With respect to these non-outsourced customers and the services the Company delivered pursuant to the servicing criteria set forth in 17 CFR Part 229 Section 1122(d)(4)(xi), the Company's assertion is strictly limited to its processing of tax payments submitted through the Company's tax payment service. 4. With respect to servicing criteria set forth in 17 CFR Part 229 Section 1122(d)(4)(xii), the Company's assertion is strictly limited to its processing of property tax penalty payments. The Company has determined that its servicer customers may also have access to systems that enable those servicers to process penalties through obligor escrow accounts. Management's assessment of compliance does not relate to the actual or potential activities of other parties with access to obligor escrow accounts. 5. Based on such assessment, management believes that, as of and for the year ended December 31, 2006, the Company has complied in all material respects with the Regulation AB Servicing Criteria related to the servicing of the Platform. 6. The registered public accounting firm of Grant Thornton, LLP, has issued an attestation report on the Company's assessment of compliance with the Regulation AB Servicing Criteria as of and for the year ended December 31, 2006. Date: February 20, 2007 LandAmerica Tax and Flood Services, Inc. By: /s/ Bob Ige Name: Bob Ige Its: Executive Vice President EX-33 (f) (logo) OCWEN Certification Regarding Compliance with Applicable Servicing Criteria 1. Ocwen Loan Servicing, LLC ("Ocwen") is responsible for assessing compliance with the servicing criteria applicable to it under paragraph (d) of Item 1122 of Regulation AB, as of and for the 12-month period ending December 31, 2006 (the "Reporting Period"), as set forth in Appendix A hereto. The transactions covered by this report include asset-backed securities transactions for which Ocwen acted as servicer involving residential mortgage loans other than transactions closing prior to the effective date of Regulation AB (the "Platform") as set forth in Appendix B hereto; 2. Ocwen has engaged certain vendors (the "Vendors") to perform specific, limited or scripted activities, and Ocwen elects to take responsibility for assessing compliance with the servicing criteria or portion of the servicing criteria applicable to such Vendors' activities as set forth in Appendix A hereto; 3. Except as set forth in paragraph 4 below, Ocwen used the criteria set forth in paragraph (d) of Item 1122 of Regulation AB to assess the compliance with the applicable servicing criteria; 4. The criteria listed in the column titled "Inapplicable Servicing Criteria" on Appendix A hereto are inapplicable to Ocwen based on the activities it performs, directly or through its Vendors, with respect to the Platform; 5. Ocwen has complied, in all material respects, with the applicable servicing criteria as of December 31, 2006 and for the Reporting Period with respect to the Platform taken as a whole; 6. Ocwen has not identified and is not aware of any material instance of noncompliance by the Vendors with the applicable servicing criteria as of December 31, 2006 and for the Reporting Period with respect to the Platform taken as a whole; 7. Ocwen has not identified any material deficiency in its policies and procedures to monitor the compliance by the Vendors with the applicable servicing criteria as of December 31, 2006 and for the Reporting Period with respect to the Platform taken as a whole; and 8. Crowe Chizek and Company LLC, a registered public accounting firm, has issued an attestation report on Ocwen's assessment of compliance with the applicable servicing criteria for the Reporting Period. March 8, 2007 Ocwen Loan Servicing, LLC By: /s/ Ronald M. Faris Name: Ronald M. Faris Title: President (page) APPENDIX A
INAPPLICABLE APPLICABLE SERVICING SERVICING CRITERIA SERVICING CRITERIA CRITERIA Performed Performed by by subservicer(s) NOT Vendor(s) or vendor(s) performed by for which for which Ocwen or by Performed Ocwen is Ocwen is subservicer(s) Directly the NOT the or vendor(s) by Responsible Responsible retained by Reference Criteria Ocwen Party Party Ocwen General Servicing Considerations 1122(d)(1)(i) Policies and procedures are instituted to monitor X any performance or other triggers and events of default in accordance with the transaction agreements. 1122(d)(1)(ii) If any material servicing activities are X outsourced to third parties, policies and procedures are instituted to monitor the third party's performance and compliance with such servicing activities. 1122(d)(1)(iii) Any requirements in the transaction agreements to X maintain a back-up servicer for the pool assets are maintained. 1122(d)(1)(iv) A fidelity bond and errors and omissions policy is X in effect on the party participating in the servicing function throughout the reporting period in the amount of coverage required by and otherwise in accordance with the terms of the transaction agreements. Cash Collection and Administration 1122(d)(2)(i) Payments on pool assets are deposited into the X^1 X^1 appropriate custodial bank accounts and related bank clearing accounts no more than two business days following receipt, or such other number of days specified in the transaction agreements. 1122(d)(2)(ii) Disbursements made via wire transfer on behalf of X an obligor or to an investor are made only by authorized personnel 1122(d)(2)(iii) Advances of funds or guarantees regarding X collections, cash flows or distributions, and any interest or other fees charged for such advances, are made, reviewed and approved as specified in the transaction agreements. 1122(d)(2)(iv) The related accounts for the transaction, such as X cash reserve accounts or accounts established as a form of overcollateralization, are separately maintained (e.g., with respect to commingling of cash) as set forth in the transaction agreements. 1122(d)(2)(v) Each custodial account is maintained at a X federally insured depository institution as set forth in the transaction agreements. For purposes of this criterion, "federally insured depository institution" with respect to a foreign financial institution means a foreign financial institution that meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange Act.
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INAPPLICABLE APPLICABLE SERVICING SERVICING CRITERIA SERVICING CRITERIA CRITERIA Performed Performed by by subservicer(s) NOT Vendor(s) or vendor(s) performed by for which for which Ocwen or by Performed Ocwen is Ocwen is subservicer(s) Directly the NOT the or vendor(s) by Responsible Responsible retained by Reference Criteria Ocwen Party Party Ocwen 1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent X^2 X^2 unauthorized access. 1122(d)(2)(vii) Reconciliations are prepared on a monthly basis X for all asset-backed securities related bank accounts, including custodial accounts and related bank clearing accounts. These reconciliations are (A) mathematically accurate; (B) prepared within 30 calendar days after the bank statement cutoff date, or such other number of days specified in the transaction agreements: (C) reviewed and approved by someone other than the person who prepared the reconciliation; and (D) contain explanations for reconciling items. These reconciling items are resolved within 90 calendar days of their original identification, or such other number of days specified in the transaction agreements. Investor Remittances and Reporting 1122(d)(3)(i) Reports to investors, including those to be filed X^3 with the Commission, are maintained in accordance with the transaction agreements and applicable Commission requirements. Specifically, such reports (A) are prepared in accordance with timeframes and other terms set forth in the transaction agreements; (B) provide information calculated in accordance with the terms specified in the transaction agreements; (C) are filed with the Commission as required by its rules and regulations; and (D) agree with investors' or the trustee's records as to the total unpaid principal balance and number of pool assets serviced by the Servicer. 1122(d)(3)(ii) Amounts due to investors are allocated and X^3 remitted in accordance with timeframes, distribution priority and other terms set forth in the transaction agreements. 1122(d)(3)(iii) Disbursements made to an investor are posted X^3 within two business days to the Servicer's investor records, or such other number of days specified in the transaction agreements. 1122(d)(3)(iv) Amounts remitted to investors per the investor X^3 reports agree with cancelled checks, or other form of payment, on custodial bank statements.
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INAPPLICABLE APPLICABLE SERVICING SERVICING CRITERIA SERVICING CRITERIA CRITERIA Performed Performed by by subservicer(s) NOT Vendor(s) or vendor(s) performed by for which for which Ocwen or by Performed Ocwen is Ocwen is subservicer(s) Directly the NOT the or vendor(s) by Responsible Responsible retained by Reference Criteria Ocwen Party Party Ocwen Pool Asset Administration 1122(d)(4)(i) Collateral or security on pool assets is X maintained as required by the transaction agreements or related mortgage loan documents. 1122(d)(4)(ii) Pool asset and related documents are safeguarded X as required by the transaction agreements 1122(d)(4)(iii) Any additions, removals or substitutions to the X asset pool are made, reviewed and approved in accordance with any conditions or requirements in the transaction agreements. 1122(d)(4)(iv) Payments on pool assets, including any payoffs, X^4 X^4 made in accordance with the related pool asset documents are posted to the Servicer's obligor records maintained no more than two business days after receipt, or such other number of days specified in the transaction agreements, and allocated to principal, interest or other items (e.g., escrow) in accordance with the related pool asset documents. 1122(d)(4)(v) The Servicer's records regarding the pool assets X agree with the Servicer's records with respect to an obligor's unpaid principal balance. 1122(d)(4)(vi) Changes with respect to the terms or status of an X obligor's pool assets (e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in accordance with the transaction agreements and related pool asset documents. 1122(d)(4)(vii) Loss mitigation or recovery actions X (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and concluded in accordance with the timeframes or other requirements established by the transaction agreements. 1122(d)(4)(viii) Records documenting collection efforts are X maintained during the period a pool asset is delinquent in accordance with the transaction agreements. Such records are maintained on at least a monthly basis, or such other period specified in the transaction agreements, and describe the entity's activities in monitoring delinquent pool assets including, for example, phone calls, letters and payment rescheduling plans in cases where delinquency is deemed temporary (e.g., illness or unemployment). 1122(d)(4)(ix) Adjustments to interest rates or rates of return X for pool assets with variable rates are computed based on the related pool asset documents.
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INAPPLICABLE APPLICABLE SERVICING SERVICING CRITERIA SERVICING CRITERIA CRITERIA Performed Performed by by subservicer(s) NOT Vendor(s) or vendor(s) performed by for which for which Ocwen or by Performed Ocwen is Ocwen is subservicer(s) Directly the NOT the or vendor(s) by Responsible Responsible retained by Reference Criteria Ocwen Party Party Ocwen 1122(d)(4)(x) Regarding any funds held in trust for an obligor X (such as escrow accounts): (A) such funds are analyzed, in accordance with the obligor's pool asset documents, on at least an annual basis, or such other period specified in the transaction agreements; (B) interest on such funds is paid, or credited, to obligors in accordance with applicable pool asset documents and state laws; and (C) such funds are returned to the obligor within 30 calendar days of full repayment of the related pool assets, or such other number of days specified in the transaction agreements. 1122(d)(4)(xi) Payments made on behalf of an obligor (such as X^5 X^5 tax or insurance payments) are made on or before the related penalty or expiration dates, as indicated on the appropriate bills or notices for such payments, provided that such support has been received by the Servicer at least 30 calendar days prior to these dates, or such other number of days specified in the transaction agreements. 1122(d)(4)(xii) Any late payment penalties in connection with X^6 X^6 any payment to be made on behalf of an obligor are paid from the Servicer's funds and not charged to the obligor, unless the late payment was due to the obligor's error or omission. 1122(d)(4)(xiii) Disbursements made on behalf of an obligor are X^7 X^7 posted within two business days to the obligor's records maintained by the Servicer, or such other number of days specified in the transaction agreements. 1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible X accounts are recognized and recorded in accordance with the transaction agreements. 1122(d)(4)(xv) Any external enhancement or other support, X identified in Item 1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained as set forth in the transaction agreements. 1 Both Regulus Group LLC and Ocwen perform aspects of this servicing criteria. Regulus is responsible for depositing any checks received into the payment deposit account Ocwen is responsible for other forms of payments, and the sweeping of funds deposited in the payment deposit account to the appropriate deal level custodial bank accounts. 2 Assurant, Inc. and Ocwen each issue checks and maintain unissued checks. Assurant issues checks for the insurance advances, while Ocwen issues all other checks. 3 Ocwen has determined for purposes of assessing the servicing criteria listed in Items 1122(d)(3(i)-(iv) that, pursuant to the Securities and Exchange Commission Telephone Interpretation 11.03, the term "investor" as used in those Items does not pertain to the entity to which Ocwen provides the applicable information (i.e. Master Servicer, Trustee, etc.) and includes certificate and bond holders. Consequently, the information regarding such items provided herein relates to Ocwen's provision of such information to the entity who ultimately disseminates such information to the investors. 4 Regulus transmits a daily data file that represents payments received for the current day to Ocwen. Ocwen then loads the data file received from Regulus in its servicing system, which then applies the funds in accordance with the terms of the related transaction agreements. 5 Assurant, Inc. and First American Real Estate Solutions of Texas, L.P. ("First American") transmit daily data files for insurance and taxes, respectively, which represent payments received for the current day to Ocwen. Ocwen loads the data files into its servicing system, which records the disbursements in the system and then sends the applicable funds via mail or wire. 6 First American identifies late payments and includes them as part of the daily data transmissions. Ocwen identifies late payments in the data transmissions and credits to the borrower's applicable account on its servicing system. Ocwen also maintains control reports to identify any late payments not identified by First American. 7 First American transmits daily data files that represent disbursements required to be made by Ocwen. Ocwen loads the stat file into its servicing system and records the disbursements on the system.
(page) APPENDIX B
Deal Name ACE Securities Corp. Home Equity Loan Trust, Series 2006-ASAP2 ACE Securities Corp. Home Equity Loan Trust, Series 2006-SL1 ACE Securities Corp. Home Equity Loan Trust, Series 2006-SL2 ACE Securities Corp. Home Equity Loan Trust, Series 2006-ASAP3 ACE Securities Corp. Home Equity Loan Trust, Series 2006-ASAP4 ACE Securities Corp. Home Equity Loan Trust, Series 2006-ASAP5 ACE Securities Corp. Home Equity Loan Trust, Series 2006-ASAP6 ACE Securities Corp. Home Equity Loan Trust, Series 2006-ASL1 ACE Securities Corp. Home Equity Loan Trust, Series 2006-HE1 ACE Securities Corp. Home Equity Loan Trust, Series 2006-HE2 ACE Securities Corp. Home Equity Loan Trust, Series 2006-HE3 ACE Securities Corp. Home Equity Loan Trust, Series 2006-HE4 ACE Securities Corp. Home Equity Loan Trust, Series 2006-SD1 ACE Securities Corp. Home Equity Loan Trust, Series 2006-SD2 ACE Securities Corp. Home Equity Loan Trust, Series 2006-SD3 ACE Securities Corp. Home Equity Loan Trust, Series 2006-SL3 BanCap Asset Securitization Issuance Corporation, Mortgage Loan Asset Backed Certificates, Series 2006-1 Bravo Mortgage Asset Backed Pass-Through Certificates, Series 2006-1 Citigroup Mortgage Loan Trust Inc. Asset-Backed Pass-Through Certificates, Series 2006-HE3 CS Home Equity Mortgage Trust Series 2006-3 CS Home Equity Mortgage Trust Series 2006-4 CS Home Equity Mortgage Trust Series 2006-5 CSFB Home Equity Asset Trust 2006-2 CS Home Equity Mortgage Trust Series 2006-1 CS Home Equity Mortgage Trust Series 2006-2 Credit Suisse Seasoned Loan Trust 2006-1 GSAA Home Equity Trust 2006-S1 GSAMP Trust 2006-NC2 GSAMP Trust 2006-S2 GSAMP Trust 2006-S3 GSAMP Trust 2006-S4 GSAMP Trust 2006-S5 GSAMP Trust 2005-S6 GSAMP Trust 2006-SD2 GSAMP Trust 2006-SD3 GSAMP Trust 2006-SEA1 GSRPM Mortgage Loan Trust 2006-2
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Deal Name MASTR Asset Backed Securities Trust 2006-AM1 MASTR Asset Backed Securities Trust 2006-AM3 Nomura Asset Acceptance Corporation Series 2006-S1 Nomura Asset Acceptance Corporation Series 2006-S2 Nomura Asset Acceptance Corporation Series 2006-S3 Nomura Asset Acceptance Corporation Series 2006-S4 Nomura Asset Acceptance Corporation Series 2006-S5 Nomura Home Equity Loan, Inc., Series 2006-HE1 Nomura Home Equity Loan, Inc., Series 2006-HE2 Nomura Home Equity Loan, Inc., Series 2006-HE3 Renaissance Home Equity Loan Trust 2006-1 Renaissance Home Equity Loan Trust 2006-2 Renaissance Home Equity Loan Trust 2006-3 Renaissance Home Equity Loan Trust 2006-4 ResMAE Asset Backed Pass-Through Certificates, Series 2006-1 Structured Asset Investment Loan Trust Mortgage Pass-Through Certificates, Series 2006-4 Structured Asset Securities Corporation Mortgage Pass-Through Certificates, Series 2006-S2 Soundview Home Loan Trust 2006-EQ2 Soundview Home Loan Trust 2006-NLC1
EX-33 (g) (logo) REGULUS Report on Assessment of Compliance with Regulation AB Servicing Criteria 1. Pursuant to Subpart 229.1100 - Asset Backed Securities, 17 C.F.R. Section 229.1100-229.1123 ("Regulation AB"), Regulus Group LLC, for itself and its wholly-owned subsidiaries (individually and collectively "Regulus"), is responsible for assessing its compliance with the servicing criteria applicable to the remittance processing services it provides to customers who are issuers or servicers of asset backed securities transactions and who have requested confirmation of Regulus' compliance in connection with loan and/or receivables portfolios that include pool assets for asset backed securities transactions (the "Platform"). Remittance processing is a service whereby check payments that are remitted by mail to a post office box are collected, processed through a highly automated data capture system, and prepared for deposit to a bank account held by the beneficiary of the payment. 2. The servicing criteria set forth in Item 1122(d) of Regulation AB were used in Regulus' assessment of compliance. Regulus has concluded that the servicing criteria set forth in Items 1122(d)(2)(i) and 1122(d)(4)(iv) of Regulation AB are applicable to the servicing activities it performs with respect to the Platform (such criteria the "Applicable Servicing Criteria"). Regulus has concluded that the remainder of the servicing criteria set forth in Item 1122(d) of Regulation AB are inapplicable to the activities it performs with respect to the Platform because Regulus does not participate in the servicing activities referenced by such servicing criteria. 3. As of and for the year ending December 31, 2006, Regulus has complied in all material respects with the Applicable Servicing Criteria set forth in Item 1122(d) of Regulation AB. 4. KPMG LLP, a registered public accounting firm, has issued an attestation report on Regulus' assessment of compliance with the Applicable Servicing Criteria as of and for the year ending December 31, 2006. A copy of that attestation report is attached hereto as Exhibit A. /s/ Kimberlee Clark Kimberlee Clark Chief Financial Officer February 22, 2007 860 LATOUR COURT NAPA, CA 94558 TEL: 707.254.4000 FAX: 707.254.4070 REGULUSGROUP.COM (page) (logo) REGULUS Management's Report on Assessment of Compliance with Regulation AB Servicing Criteria 1. Pursuant to Subpart 229.1100 - Asset Backed Securities, 17 C.F.R. Section 229.1100-229.1123 ("Regulation AB"), Regulus Group LLC, for itself and its wholly-owned subsidiaries (individually and collectively "Regulus"), is responsible for assessing its compliance with the servicing criteria applicable to the remittance processing services it provides to customers who are issuers or servicers of asset backed securities transactions and who have requested confirmation of Regulus' compliance in connection with loan and/or receivables portfolios that include pool assets for asset backed securities transactions (the "Platform"). Remittance processing is a service whereby check payments that are remitted by mail to a post office box are collected, processed through a highly automated data capture system, and prepared for deposit to a bank account held by the beneficiary of the payment. 2. The servicing criteria set forth in Item 1122(d) of Regulation AB were used in Regulus' assessment of compliance. Regulus has concluded that the servicing criteria set forth in Items 1122(d)(2)(i) and 1122(d)(4)(iv) of Regulation AB are applicable to the servicing activities it performs with respect to the Platform (such criteria the "Applicable Servicing Criteria"). Regulus has concluded that the remainder of the servicing criteria set forth in Item 1122(d) of Regulation AB are inapplicable to the activities it performs with respect to the Platform because Regulus does not participate in the servicing activities referenced by such servicing criteria. 3. As of and for the year ending December 31, 2006, Regulus has complied in all material respects with the Applicable Servicing Criteria set forth in Item 1122(d) of Regulation AB. /s/ Kimberlee Clark Kimberlee Clark Chief Financial Officer February 22, 2007 860 LATOUR COURT NAPA, CA 94558 TEL: 707.254.4000 FAX: 707.254.4070 REGULUSGROUP.COM (page) (logo) REGULUS Report on Assessment of Compliance with Regulation AB Item 1123 Pursuant to Item 1123 of Regulation AB, a review of the Regulus' activities during the year ended December 31, 2006 (the "Reporting Period") and of its performance under the servicing agreement between Regulus and Ocwen Mortgage (the "Servicing Agreement") has been made under the undersigned officer's supervision. To the best of such officer's knowledge, based on such review, Regulus has fulfilled its obligations under the Servicing Agreement in all material respects throughout the Reporting Period. /s/ Kimberlee Clark Kimberlee Clark Chief Financial Officer February 22, 2007 860 LATOUR COURT NAPA, CA 94558 TEL: 707.254.4000 FAX: 707.254.4070 REGULUSGROUP.COM EX-33 (h) (logo) REGULUS Report on Assessment of Compliance with Regulation AB Servicing Criteria 1. Pursuant to Subpart 229.1100 - Asset Backed Securities, 17 C.F.R. section 229. 1100-229.1123 ("Regulation AB"), Regulus Group LLC, for itself and its wholly-owned subsidiaries (individually and collectively "Regulus"), is responsible for assessing its compliance with the servicing criteria applicable to the remittance processing services it provides to customers who are issuers or servicers of asset backed securities transactions and who have requested confirmation of Regulus' compliance in connection with loan and/or receivables portfolios that include pool assets for asset backed securities transactions (the "Platform"). Remittance processing is a service whereby check payments that are remitted by mail to a post office box are collected, processed through a highly automated data capture system, and prepared for deposit to a bank account held by the beneficiary of the payment. 2. The servicing criteria set forth in Item 1122(d) of Regulation AB were used in Regulus' assessment of compliance. Regulus has concluded that the servicing criteria set forth in Items 1122(d)(2)(i) and 1122(d)(4)(iv) of Regulation AB are applicable to the servicing activities it performs with respect to the Platform (such criteria the "Applicable Servicing Criteria"). Regulus has concluded that the remainder of the servicing criteria set forth in Item 1122(d) of Regulation AB are inapplicable to the activities it performs with respect to the Platform because Regulus does not participate in the servicing activities referenced by such servicing criteria. 3. As of and for the year ending December 31, 2006, Regulus has complied in all material respects with the Applicable Servicing Criteria set forth in Item 1122(d) of Regulation AB. 4. KPMG LLP, a registered public accounting firm, has issued an attestation report on Regulus' assessment of compliance with the Applicable Servicing Criteria as of and for the year ending December 31, 2006. A copy of that attestation report is attached hereto as Exhibit A. /s/ Kimberlee Clark Kimberlee Clark Chief Financial Officer February 22, 2007 860 LATOUR COURT | NAPA, CA | 94558 | TEL: 707.254.4000 | FAX: 707.254.4070 | REGULU5GROUP.COM EX-33 (i) (logo) WELLS FARGO HOME MORTGAGE Wells Fargo Home Mortgage One Home Campus Des Moines, IA 50328-0001 YourWellsFargoMortgage.com Wells Fargo Bank, N.A. 2006 Certification Regarding Compliance with Applicable Servicing Criteria 1. Wells Fargo Bank, N.A. (the "Servicer") is responsible for assessing its compliance with the servicing criteria applicable to it under paragraph (d) of Item 1122 of Regulation AB as set forth in Exhibit A hereto in connection with the primary servicing of residential mortgage loans by its Wells Fargo Home Mortgage division, other than the servicing of such loans for Freddie Mac, Fannie Mae, Ginnie Mae, state and local government bond programs, or a Federal Home Loan Bank (the servicing "Platform"); 2. The Servicer has engaged certain vendors (the "Vendors") to perform specific, limited or scripted activities as of and for the year ended December 31, 2006, and the Servicer has elected to take responsibility for assessing compliance with the servicing criteria or portion of the servicing criteria applicable to such Vendors as set forth in Exhibit A hereto, with the exception of those Vendors that have provided their own report on assessment of compliance with servicing criteria, which reports are attached hereto as Exhibit D; 3. Except as set forth in paragraph 4 below, the Servicer used the criteria set forth in paragraph (d) of Item 1122 of Regulation AB to assess the compliance with the applicable servicing criteria; 4. The criteria identified as Inapplicable Servicing Criteria on Exhibit A hereto are inapplicable to the Servicer based on the activities it performs with respect to its Platform; 5. The Servicer has complied, in all material respects, with the applicable servicing criteria as of and for the year ended December 31, 2006, except as described on Exhibit B hereto; 6. The Servicer has not identified and is not aware of any material instance of noncompliance by the Vendors with the applicable servicing criteria as of and for the year ended December 31, 2006; 7. The Servicer has not identified any material deficiency in its policies and procedures to monitor the compliance by the Vendors with the applicable servicing criteria for the year ended December 31, 2006; and 8. KPMG LLP, a registered public accounting firm, has issued an attestation report on the Servicer's assessment of compliance with the applicable servicing criteria as of and for the year ended December 31, 2006, which attestation report is included on Exhibit C attached hereto. March 1, 2007 WELLS FARGO BANK, N.A. By: /s/ Mary C. Coffin Mary C. Coffin Executive Vice President Wells Fargo Home Mortgage is a division of Wells Fargo Bank, N.A. (page) EXHIBIT A to Wells Fargo Bank, N.A.'s 2006 Certification Regarding Compliance With Applicable Servicing Criteria
Servicing Criteria Applicable Servicing Inapplicable Criteria Servicing Criteria Reference Criteria Performed Performed by by Servicer Vendor(s) General Servicing Considerations Policies and procedures are instituted to monitor any performance or X other triggers and events of default in accordance with the 1122(d)(1)(i) transaction agreements. If any material servicing activities are outsourced to third parties, X policies and procedures are instituted to monitor the third party's 1122(d)(1)(ii) performance and compliance with such servicing activities. Any requirements in the transaction agreements to maintain a back-up X 1122(d)(1)(iii) servicer for the mortgage loans are maintained. A fidelity bond and errors and omissions policy is in effect on the X party participating in the servicing function throughout the reporting period in the amount of coverage required by and otherwise in 1122(d)(1)(iv) accordance with the terms of the transaction agreements. Cash Collection and Administration Payments on mortgage loans are deposited into the appropriate X^1 X^2 custodial bank accounts and related bank clearing accounts no more than two business days following receipt, or such other number of 1122(d)(2)(i) days specified in the transaction agreements. Disbursements made via wire transfer on behalf of an obligor or to an X 1122(d)(2)(ii) investor are made only by authorized personnel. Advances of funds or guarantees regarding collections, cash flows or X distributions, and any interest or other fees charged for such advances, are made, reviewed and approved as specified in the 1122(d)(2)(iii) transaction agreements. The related accounts for the transaction, such as cash reserve X accounts or accounts established as a form of overcollateralization are separately maintained (e.g., with respect to commingling of cash) 1122(d)(2)(iv) as set forth in the transaction agreements. Each custodial account is maintained at a federally insured X depository institution as set forth in the transaction agreements. For purposes of this criterion, "federally insured depository institution" with respect to a foreign financial institution means a foreign financial institution that meets the requirements of Rule 1122(d)(2)(v) 13k-1(b)(1) of the Securities Exchange Act. 1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent unauthorized access. X^3 X^4 (page) Servicing Criteria Applicable Servicing Inapplicable Criteria Servicing Criteria Reference Criteria Performed Performed by by Servicer Vendor(s) Reconciliations are prepared on a monthly basis for all asset-backed X securities related bank accounts, including custodial accounts and related bank clearing accounts. These reconciliations are (A) mathematically accurate; (B) prepared within 30 calendar days after the bank statement cutoff date, or such other number of days specified in the transaction agreements; (C) reviewed and approved by someone other than the person who prepared the reconciliation, and (D) contain explanations for reconciling items. These reconciling items are resolved within 90 calendar days of their original identification, or such other number of days specified in the 1122(d)(2)(vii) transaction agreements. Investor Remittances and Reporting Reports to investors, including those to be filed with the X Commission, are maintained in accordance with the transaction agreements and applicable Commission requirements. Specifically, such reports (A) are prepared in accordance with timeframes and other terms set forth in the transaction agreements; (B) provide information calculated in accordance with the terms specified in the transaction agreements; (C) are filed with the Commission as required by its rules and regulations; and (D) agree with investors' or the trustee's records as to the total unpaid principal balance and number 1122(d)(3)(i) of mortgage loans serviced by the Servicer. Amounts due to investors are allocated and remitted in accordance X with timeframes, distribution priority and other terms set forth in 1122(d)(3)(ii) the transaction agreements. Disbursements made to an investor are posted within two business days X to the Servicer's investor records, or such other number of days 1122(d)(3)(iii) specified in the transaction agreements. Amounts remitted to investors per the investor reports agree with X cancelled checks, or other form of payment, or custodial bank 1122(d)(3)(iv) statements. Pool Asset Administration Collateral or security on mortgage loans is maintained as required by X 1122(d)(4)(i) the transaction agreements or related mortgage loan documents. Mortgage loan and related documents are safeguarded as required by X 1122(d)(4)(ii) the transaction agreements. Any additions, removals or substitutions to the asset pool are made X reviewed and approved in accordance with any conditions or 1122(d)(4)(iii) requirements in the transaction agreements. Payments on mortgage loans, including any payoffs, made in X^5 X^6 accordance with the related mortgage loan documents are posted to the Servicer's obligor records maintained no more than two business days after receipt, or such other number of days specified in the transaction agreements, and allocated to principal, interest or other items (e.g., escrow) in accordance with the related mortgage loan 1122(d)(4)(iv) documents. The Servicer's records regarding the mortgage loans agree with the X Servicer's records with respect to an obligor's unpaid principal 1122(d)(4)(v) balance. Changes with respect to the terms or status of an obligor's mortgage X loans (e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in accordance with the 1122(d)(4)(vi) transaction agreements and related pool asset documents. (page) Servicing Criteria Applicable Servicing Inapplicable Criteria Servicing Criteria Reference Criteria Performed Performed by by Servicer Vendor(s) Loss mitigation or recovery actions (e.g., forbearance plans, X modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and concluded in accordance with the timeframes or other requirements established 1122(d)(4)(vii) by the transaction agreements. Records documenting collection efforts are maintained during the X period a mortgage loan is delinquent in accordance with the transaction agreements. Such records are maintained on at least a monthly basis, or such other period specified in the transaction agreements, and describe the entity's activities in monitoring delinquent mortgage loans including, for example, phone calls, letters and payment rescheduling plans in cases where delinquency is 1122(d)(4)(viii) deemed temporary (e.g., illness or unemployment). Adjustments to interest rates or rates of return for mortgage loans X with variable rates are computed based on the related mortgage loan 1122(d)(4)(ix) documents. Regarding any funds held in trust for an obligor (such as escrow X accounts): (A) such funds are analyzed, in accordance with the obligor's mortgage loan documents, on at least an annual basis, or such other period specified in the transaction agreements; (B) interest on such funds is paid, or credited to obligors in accordance with applicable mortgage loan documents and state laws; and (C) such funds are returned to the obligor within 30 calendar days of full repayment of the related mortgage loans, or such other 1122(d)(4)(x) number of days specified in the transaction agreements. Payments made on behalf of an obligor (such as tax or insurance X^7 X^8 payments) are made on or before the related penalty or expiration dates, as indicated on the appropriate bills or notices for such payments, provided that such support has been received by the servicer at least 30 calendar days prior to these dates, or such 1122(d)(4)(xi) other number of days specified in the transaction agreements. Any late payment penalties in connection with any payment to be made X on behalf of an obligor are paid from the Servicer's funds and not charged in the obligor, unless the late payment was due to the 1122(d)(4)(xii) obligor's error or omission. Disbursements made on behalf of an obligor are posted within two X^9 X^10 business days to the obligor's records maintained by the servicer, or 1122(d)(4)(xiii) such other number of days specified in the transaction agreements. Delinquencies, charge-offs and uncollectible accounts are recognized X 1122(d)(4)(xiv) and recorded in accordance with the transaction agreements. Any external enhancement or other support, identified in Item X 1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained 1122(d)(4)(xv) as set forth in the transaction agreements. 1 A portion of this servicing criteria is performed by a vendor, as set forth in footnote 2 below. 2 A lockbox vendor receives payments, creates transaction files, deposits checks, reconciles files to deposits and transmits the transaction files to Wells Fargo. See Exhibit D. 3 A portion of this servicing criteria is performed by vendors, as set forth in footnote 4 below. 4 Insurance vendors prepare and safeguard checks on behalf of Wells Fargo. As to one such vendor, see Exhibit D. 5 A portion of this servicing criteria is performed by a vendor, as set forth in footnote 6 below. 6 A lockbox vendor receives payments, creates transaction files, deposits checks, reconciles files to deposits and transmits the transaction files to Wells Fargo. See Exhibit D. 7 A portion of this servicing criteria is performed by vendors, as set forth in footnote 8 below. 8 Insurance vendors obtain renewal invoices, create disbursement transactions and submit payments to payees. As to one such vendor, see Exhibit D. 9 A portion of this servicing criteria is performed by one or more vendors, as set forth in footnote 10 below. 10 Insurance vendors obtain renewal invoices, create disbursement transactions and submit payments to payees. As to one such vendor, see Exhibit D.
(page) EXHIBIT B to Wells Fargo Bank, N.A.'s 2006 Certification Regarding Compliance With Applicable Servicing Criteria Wells Fargo Bank, N.A. ("Wells Fargo") acknowledges the following material instances of noncompliance with the applicable servicing criteria: 1. 1122(d)(3)(i) - Delinquency Reporting - For certain loans sub-serviced by Wells Fargo or for which servicing rights were acquired on a bulk-acquisition basis, Wells Fargo determined that it provided incomplete data to some third parties who use such data to calculate delinquency ratios and determine the status of loans with respect to bankruptcy, foreclosure or real estate owned. The incomplete reporting only affected securitizations that included delinquent loans. Instead of the actual due date being provided for use in calculating delinquencies, the date of the first payment due to the security was provided. Wells Fargo subsequently included additional data in the monthly remittance reports, providing the actual borrower due date and unpaid principal balance, together with instructions to use these new fields if such monthly remittance reports are used to calculate delinquency ratios. 2. 1122(d)(4)(vii) - Notification of Intent to Foreclose - Wells Fargo determined that, as required by certain servicing agreements, it did not provide investors with prior notification of intent to foreclose. While investors received monthly delinquency status reports that listed loans in foreclosure, such reports were received after such loans had been referred to an attorney. A new process is being implemented to send such notifications if contractually required, unless an investor opts out in writing. (page) EXHIBIT C to Wells Fargo Bank, N.A.'s 2006 Certification Regarding Compliance With Applicable Servicing Criteria Report or Independent Registered Public Accounting Firm (page) EXHIBIT D to Wells Fargo Bank, N.A.'s 2006 Certification Regarding Compliance With Applicable Servicing Criteria Vendors' Reports on Assessment of Compliance With Servicing Criteria EX-33 (j) (logo) WELLS FARGO Corporate Trust Services 9062 Old Annapolis Road Columbia, MD 21045-1951 410 884-2000 410 715-2380 Fax Wells Fargo Bank, N.A. ASSESSMENT OF COMPLIANCE WITH APPLICABLE SERVICING CRITERIA Corporate Trust Services division of Wells Fargo Bank, National Association (the "Company") provides this assessment of compliance with the following applicable servicing criteria set forth in Item 1122(d) of Regulation AB promulgated by the Securities and Exchange Commission. Management has determined that the servicing criteria are applicable in regards to the servicing platform for the period as follows: Platform: Publicly-issued (i.e., transaction-level reporting initially required under the Securities Exchange Act of 1934, as amended) residential mortgage-backed securities, commercial mortgage-backed securities and other asset-backed securities, for which the Company provides master servicing, trustee, securities administration or paying agent services, excluding transactions issued by any agency or instrumentality of the U.S. government or any government sponsored entity (the "Platform"). Applicable Servicing Criteria: All servicing criteria set forth in Item 1122(d), to the extent required in the related transaction agreements or required by the Item 1122(d) servicing criteria in regards to the activities performed by the Company, except for the following criteria: 1122(d)(1)(iii), 1122(d)(4)(ii), 1122(d)(4)(iv), 1122(d)(4)(v), 1122(d)(4)(viii), 1122(d)(4)(ix), 1122(d)(4)(x), 1122(d)(4)(xi), 1122(d)(4)(xii) and 1122(d)(4)(xiii), which management has determined are not applicable to the activities the Company performs with respect to the Platform (the "Applicable Servicing Criteria"). Period: Twelve months ended December 31, 2006 (the "Period"). Third parties classified as vendors: With respect to servicing criteria 1122(d)(4)(i), the Company has engaged various vendors to handle certain Uniform Commercial Code filing functions required by the servicing criteria ("vendors"). The Company has determined that none of the vendors is a "servicer" as defined in Item 1101(j) of Regulation AB, and the Company elects to take responsibility for assessing compliance with the portion of the servicing criteria applicable to each vendor as permitted by Interpretation 17.06 of the SEC Division of Corporation Finance Manual of Publicly Available Telephone Interpretations ("Interpretation 17.06"). The Company has policies and procedures in place to provide reasonable assurance that each vendor's activities comply in all material respects with the servicing criteria applicable to each vendor. The Company is solely responsible for determining that it meets the SEC requirements to apply Interpretation 17.06 for the vendors and related criteria. With respect to the Platform and the Period, the Company provides the following assessment of compliance with respect to the Applicable Servicing Criteria: 1. The Company is responsible for assessing its compliance with the Applicable Servicing Criteria. 2. The Company has assessed compliance with the Applicable Servicing Criteria, including servicing criteria for which compliance is determined based on Interpretation 17.06 as described above, as of and for the Period. In performing this assessment, management used the criteria set forth by the Securities and Exchange Commission in paragraph (d) of Item 1122 of Regulation AB. 3. Other than as identified on Schedule A hereto, as of and for the Period, the Company was in material compliance with the Applicable Servicing Criteria. Any material instances of noncompliance by a vendor of which the Company is aware and any material deficiency in the Company's policies and procedures to monitor vendors' compliance that the Company has identified is specified on Schedule A hereto. KPMG LLP, a registered public accounting firm, has issued an attestation report with respect to the Company's foregoing assessment of compliance as of and for the Period. WELLS FARGO BANK, NATIONAL ASSOCIATION By:/s/ Brian Bartlett Brian Bartlett Its: Executive Vice President Dated: March 1, 2007 (page) (logo) WELLS FARGO Corporate Trust Services 9062 Old Annapolis Road Columbia, MD 21045-1951 410 884-2000 410 715-2380 Fax Wells Fargo Bank, N.A. Schedule A Material Instances of Noncompliance by the Company 1122(d)(3)(i)- Delinquency Reporting - During the reporting period, certain monthly investor or remittance reports included errors in the calculation and/or the reporting of delinquencies for the pool assets, which errors may or may not have been material. All such errors were the result of data processing errors and/or the mistaken interpretation of data provided by other parties participating in the servicing function. All necessary adjustments to data processing systems and/or interpretive clarifications have been made to correct those errors and to remedy related procedures. Material instances of Noncompliance by any Vendor NONE Material Deficiencies In Company's Policies and Procedures to Monitor Vendors' Compliance NONE EX-33 (k) (logo) WELLS FARGO Corporate Trust Services 9062 Old Annapolis Road Columbia, MD 21045-1951 410 884-2000 410 715-2380 Fax Wells Fargo Bank, N.A. ASSESSMENT OF COMPLIANCE WITH APPLICABLE SERVICING CRITERIA Corporate Trust Services division of Wells Fargo Bank, National Association (the "Company") provides this assessment of compliance with the following applicable servicing criteria set forth in Item 1122(d) of Regulation AB promulgated by the Securities and Exchange Commission. Management has determined that the servicing criteria are applicable in regards to the servicing platform for the period as follows: Platform: Publicly-issued (i.e., transaction-level reporting initially required under the Securities Exchange Act of 1934, as amended) residential mortgage-backed securities, commercial mortgage-backed securities and other asset-backed securities, for which the Company provides master servicing, trustee, securities administration or paying agent services, excluding transactions issued by any agency or instrumentality of the U.S. government or any government sponsored entity (the "Platform"). Applicable Servicing Criteria: All servicing criteria set forth in Item 1122(d), to the extent required in the related transaction agreements or required by the Item 1122(d) servicing criteria in regards to the activities performed by the Company, except for the following criteria: 1122(d)(1)(iii), 1122(d)(4)(ii), 1122(d)(4)(iv), 1122(d)(4)(v), 1122(d)(4)(viii), 1122(d)(4)(ix), 1122(d)(4)(x), 1122(d)(4)(xi), 1122(d)(4)(xii) and 1122(d)(4)(xiii), which management has determined are not applicable to the activities the Company performs with respect to the Platform (the "Applicable Servicing Criteria"). Period: Twelve months ended December 31, 2006 (the "Period"). Third parties classified as vendors: With respect to servicing criteria 1122(d)(4)(i), the Company has engaged various vendors to handle certain Uniform Commercial Code filing functions required by the servicing criteria ("vendors"). The Company has determined that none of the vendors is a "servicer" as defined in Item 1101(j) of Regulation AB, and the Company elects to take responsibility for assessing compliance with the portion of the servicing criteria applicable to each vendor as permitted by Interpretation 17.06 of the SEC Division of Corporation Finance Manual of Publicly Available Telephone Interpretations ("Interpretation 17.06"). The Company has policies and procedures in place to provide reasonable assurance that each vendor's activities comply in all material respects with the servicing criteria applicable to each vendor. The Company is solely responsible for determining that it meets the SEC requirements to apply Interpretation 17.06 for the vendors and related criteria. With respect to the Platform and the Period, the Company provides the following assessment of compliance with respect to the Applicable Servicing Criteria: 1. The Company is responsible for assessing its compliance with the Applicable Servicing Criteria. 2. The Company has assessed compliance with the Applicable Servicing Criteria, including servicing criteria for which compliance is determined based on Interpretation 17.06 as described above, as of and for the Period. In performing this assessment, management used the criteria set forth by the Securities and Exchange Commission in paragraph (d) of Item 1122 of Regulation AB. 3. Other than as identified on Schedule A hereto, as of and for the Period, the Company was in material compliance with the Applicable Servicing Criteria. Any material instances of noncompliance by a vendor of which the Company is aware and any material deficiency in the Company's policies and procedures to monitor vendors' compliance that the Company has identified is specified on Schedule A hereto. KPMG LLP, a registered public accounting firm, has issued an attestation report with respect to the Company's foregoing assessment of compliance as of and for the Period. WELLS FARGO BANK, NATIONAL ASSOCIATION By:/s/ Brian Bartlett Brian Bartlett Its: Executive Vice President Dated: March 1, 2007 (page) (logo) WELLS FARGO Corporate Trust Services 9062 Old Annapolis Road Columbia, MD 21045-1951 410 884-2000 410 715-2380 Fax Wells Fargo Bank, N.A. Schedule A Material Instances of Noncompliance by the Company 1122(d)(3)(i)- Delinquency Reporting - During the reporting period, certain monthly investor or remittance reports included errors in the calculation and/or the reporting of delinquencies for the pool assets, which errors may or may not have been material. All such errors were the result of data processing errors and/or the mistaken interpretation of data provided by other parties participating in the servicing function. All necessary adjustments to data processing systems and/or interpretive clarifications have been made to correct those errors and to remedy related procedures. Material instances of Noncompliance by any Vendor NONE Material Deficiencies In Company's Policies and Procedures to Monitor Vendors' Compliance NONE EX-33 (l) (logo) WELLS FARGO Corporate Trust Services 9062 Old Annapolis Road Columbia, MD 21045-1951 410 884-2000 410 715-2380 Fax Wells Fargo Bank, N.A. ASSESSMENT OF COMPLIANCE WITH APPLICABLE SERVICING CRITERIA Corporate Trust Services division of Wells Fargo Bank, National Association (the "Company") provides this assessment of compliance with the following applicable servicing criteria set forth in Item 1122(d) of Regulation AB promulgated by the Securities and Exchange Commission. Management has determined that the servicing criteria are applicable in regards to the servicing platform for the period as follows: Platform: Publicly-issued (i.e., transaction-level reporting initially required under the Securities Exchange Act of 1934, as amended) residential mortgage-backed securities, commercial mortgage-backed securities and other asset-backed securities, for which the Company provides master servicing, trustee, securities administration or paying agent services, excluding transactions issued by any agency or instrumentality of the U.S. government or any government sponsored entity (the "Platform"). Applicable Servicing Criteria: All servicing criteria set forth in Item 1122(d), to the extent required in the related transaction agreements or required by the Item 1122(d) servicing criteria in regards to the activities performed by the Company, except for the following criteria: 1122(d)(1)(iii), 1122(d)(4)(ii), 1122(d)(4)(iv), 1122(d)(4)(v), 1122(d)(4)(viii), 1122(d)(4)(ix), 1122(d)(4)(x), 1122(d)(4)(xi), 1122(d)(4)(xii) and 1122(d)(4)(xiii), which management has determined are not applicable to the activities the Company performs with respect to the Platform (the "Applicable Servicing Criteria"). Period: Twelve months ended December 31, 2006 (the "Period"). Third parties classified as vendors: With respect to servicing criteria 1122(d)(4)(i), the Company has engaged various vendors to handle certain Uniform Commercial Code filing functions required by the servicing criteria ("vendors"). The Company has determined that none of the vendors is a "servicer" as defined in Item 1101(j) of Regulation AB, and the Company elects to take responsibility for assessing compliance with the portion of the servicing criteria applicable to each vendor as permitted by Interpretation 17.06 of the SEC Division of Corporation Finance Manual of Publicly Available Telephone Interpretations ("Interpretation 17.06"). The Company has policies and procedures in place to provide reasonable assurance that each vendor's activities comply in all material respects with the servicing criteria applicable to each vendor. The Company is solely responsible for determining that it meets the SEC requirements to apply Interpretation 17.06 for the vendors and related criteria. With respect to the Platform and the Period, the Company provides the following assessment of compliance with respect to the Applicable Servicing Criteria: 1. The Company is responsible for assessing its compliance with the Applicable Servicing Criteria. 2. The Company has assessed compliance with the Applicable Servicing Criteria, including servicing criteria for which compliance is determined based on Interpretation 17.06 as described above, as of and for the Period. In performing this assessment, management used the criteria set forth by the Securities and Exchange Commission in paragraph (d) of Item 1122 of Regulation AB. 3. Other than as identified on Schedule A hereto, as of and for the Period, the Company was in material compliance with the Applicable Servicing Criteria. Any material instances of noncompliance by a vendor of which the Company is aware and any material deficiency in the Company's policies and procedures to monitor vendors' compliance that the Company has identified is specified on Schedule A hereto. KPMG LLP, a registered public accounting firm, has issued an attestation report with respect to the Company's foregoing assessment of compliance as of and for the Period. WELLS FARGO BANK, NATIONAL ASSOCIATION By:/s/ Brian Bartlett Brian Bartlett Its: Executive Vice President Dated: March 1, 2007 (page) (logo) WELLS FARGO Corporate Trust Services 9062 Old Annapolis Road Columbia, MD 21045-1951 410 884-2000 410 715-2380 Fax Wells Fargo Bank, N.A. Schedule A Material Instances of Noncompliance by the Company 1122(d)(3)(i)- Delinquency Reporting - During the reporting period, certain monthly investor or remittance reports included errors in the calculation and/or the reporting of delinquencies for the pool assets, which errors may or may not have been material. All such errors were the result of data processing errors and/or the mistaken interpretation of data provided by other parties participating in the servicing function. All necessary adjustments to data processing systems and/or interpretive clarifications have been made to correct those errors and to remedy related procedures. Material instances of Noncompliance by any Vendor NONE Material Deficiencies In Company's Policies and Procedures to Monitor Vendors' Compliance NONE EX-33 (m) (logo) WELLS FARGO Wells Fargo Bank, N.A. Document Custody 1015 10th Avenue SE Minneapolis, MN 55414 Appendix I ASSESSMENT OF COMPLIANCE WITH APPLICABLE SERVICING CRITERIA Corporate Trust Services division of Wells Fargo Bank, National Association (the "Company") is responsible for assessing compliance with the servicing criteria set forth in Item 1122(d) of Regulation AB promulgated by the Securities and Exchange Commission. The Company has determined that the servicing criteria are applicable in regard to the servicing platform for the period as follows: Platform: Publicly-issued (i.e., transaction-level reporting required under the Securities Exchange Act of 1934, as amended) residential mortgage-backed securities and commercial mortgage-backed securities issued on or after January 1, 2006, for which the Company provides document custody services, excluding any publicly issued transactions issued by any government sponsored entity (the "Platform"). Applicable Servicing Criteria: The servicing criteria set forth in Item 1122(d)(4)(i) and 1122(d)(4)(ii), in regard to the activities performed by the Company with respect to the Platform (the "Applicable Servicing Criteria"). The Company has determined that all other servicing criteria set forth in Item 1122(d) are not applicable to the Platform. Period: Twelve months ended December 31, 2006 (the "Period"). With respect to the Platform, the Company provides the following assessment of compliance with respect to the Applicable Servicing Criteria: 1. The Company is responsible for assessing the Company's compliance with the Applicable Servicing Criteria as of and for the Period. 2. The Company has assessed compliance with the Applicable Servicing Criteria. In performing this assessment, the Company used the criteria set forth by the Securities and Exchange Commission in paragraph (d) of Item 1122 of Regulation AB. 3. Based on such assessment, as of and for the Period, the Company has complied, in all material respects with the Applicable Servicing Criteria. KPMG LLP, a registered public accounting firm, has issued an attestation report with respect to the Company's assessment of compliance as of and for the Period. WELLS FARGO BANK, NATIONAL ASSOCIATION By: /s/ Shari L. Gillund Shari L. Gillund Its: Senior Vice President Dated: March 1, 2007 EX-33 (n) (logo) ZC STERLING ZC Sterling Corporation 210 Interstate North Parkway Suite 400 Atlanta, GA 30339 Tel 770.690.8400 Fax 770.690.8240 http://www.zcsterling.com Report on Assessment of Compliance with Securities and Exchange Commission's Regulation AB Servicing Criteria For the calendar year ending December 31 2006, or portion thereof (the "Period"), ZC Sterling Insurance Agency, Inc. ("ZCSIA") has been a subcontractor for Servicers identified in Appendix A. The undersigned are Senior Vice Presidents of ZCSIA, have sufficient authority to make the statements contained in this Assertion and are responsible for assessing compliance with the servicing criteria applicable to ZCSIA. ZCSIA has used the servicing criteria communicated to ZCSIA by the Servicer to assess compliance with the applicable servicing criteria. Accordingly, servicing criteria 1122 (d) 1(iv), 1122 (d) 2(vi), 1122 (d) 4(xi), 1122 (d) 4(xii), and 1122 (d) 4(xiii) are applicable to the activities performed by ZCSIA with respect to the Platforms covered by this report. The remaining servicing criteria set forth in Item 1122 (d) of the Securities and Exchange Commission's Regulation AB are not applicable to the activities performed by ZCSIA with respect to the Platform covered by this report. As a subcontractor for Servicer, ZCSIA has determined that it complied in all material respects with the servicing criteria listed below. ZCSIA engaged Ernst & Young, LLP ("E&Y"), a registered public accounting firm, to review ZCSIA's assessment, and E&Y has issued an attestation report on ZCSIA's assessment of compliance with the applicable servicing criteria for the Period. 1. ZCSIA maintained a fidelity bond and errors & omissions policy in effect on ZCSIA throughout the reporting period in the amount of coverage required by the transaction agreements between the Servicer and ZCSIA (1122(d)((1)(iv)). 2. To the extent that ZCSIA prints checks for Servicer or otherwise has Servicer's checks or check stock, unissued checks are safeguarded so as to prevent unauthorized access (1122(d)(2)(vi)). [AS OF DECEMBER 31, 2006, THIS PROVISION WILL APPLY ONLY FOR THE FOLLOWING SERVICERS: ABN Amro Mortgage Group, Inc, Option One Mortgage Corporation, Sun Trust Mortgage, Inc., HomEq Servicing Corporation, Wachovia Insurance Corporation, Wells Fargo Home Mortgage. (page) 3. Payments made on behalf of Servicer's obligor for insurance premiums are made on or before the related penalty or expiration dates, as indicated on the appropriate bills or notices for such payments, provided that such support has been received by the Servicer at least thirty (30) calendar days prior to these dates, or such other number of days specified in the transaction agreements between Servicer and ZCSIA (1122(d)(4)(xi)). 4. Any late payment penalties in connection with any payment for insurance to be made on behalf of Servicer's obligor are paid from the Servicer's funds or ZCSIA's funds and not charged to Servicer's obligor, unless the late payment was due to the obligor's error or omission (1122(d)(4)(xii)). 5. File(s) provided to Servicer from which Servicer may make disbursements made on behalf of Servicer's obligor are provided to Servicer on an accurate and timely basis and the information thereon is subject to such controls as are specified in the transaction agreements between Servicer and ZCSIA (1122(d)(4)(xiii)). Sincerely, ZC STERLING INSURANCE AGENCY, INC. By: /s/ Arthur J. Castner Arthur J. Castner Title: Senior Vice President - Hazard Operations Date: February 20, 20007 By: /s/ James P. Novak James P. Novak Title: Senior Vice President & General Counsel Date: February 20, 2007 2 (page) Appendix A The following is a list of Clients serviced on the ZC Sterling Integrated Product Solution (ZIPS) Platform: 1. ABN Amro Mortgage Group, Inc. 2. Dovenmuehle Mortgage, Inc. 3. HomEq Servicing Corporation 4. Option One Mortgage Corporation 5. People's Choice Home Loan, Inc. 6. Sun Trust Mortgage, Inc. 7. Wachovia Insurance Agency (and its affiliates, including Wachovia Mortgage Corporation) 8. Wells Fargo Home Mortgage 3 EX-34 (a) (logo) PRICEWATERHOUSECOOPERS PricewaterhouseCoopers LLP 10 Tenth Street, Northwest Suite 1400 Atlanta, GA 30309-3851 Telephone (678) 419 1000 Fascimile (678) 419 1239 www.pwc.com Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Assurant, Inc.: We have examined management's assertion, included in the accompanying management's Report on Assessment of Compliance with 1122(d)(2)(vi) and 1122(d)(4)(xi) of Regulation AB Servicing Criteria, that American Security Insurance Company, Standard Guaranty Insurance Company and Safeco Financial Institution Solutions, Inc. (affiliates of Assurant Inc., collectively the "Asserting Party") complied with the servicing criteria set forth in Item 1122(d) of the Securities and Exchange Commission's Regulation AB for all mortgage loan-tracking transactions for which the Asserting Party served as a Vendor on behalf of Servicers for such asset-backed securities transactions that were registered after January 1, 2006 with the Securities and Exchange Commission pursuant to the Securities Act of 1933 (the "Platform"), as of December 31, 2006 and for the year then ended, excluding (i) criteria 1122(d)(1)(i) through 1122(d)(1)(iv), 1122(d)(2)(i) through 1122(d)(2)(v), 1122(d)(2)(vii), 1122(d)(3)(i) through 1122(d)(3)(iv), 1122(d)(4)(i) through 1122(d)(4)(x) and 1122(d)(4)(xiii) through 1122(d)(4)(xv), which the Asserting Party has determined are not applicable to the activities performed by it with respect to the Platform and (ii), criterion 1122(d)(4)(xii), which relates to servicing activities that are applicable to the Platform, but are excluded from the scope of management's assertion and are not reported on herein. Management is responsible for the Company's compliance with the servicing criteria. Our responsibility is to express an opinion on management's assertion based on our examination. Our examination was conducted in accordance with standards of the Public Company Accounting Oversight Board (United States) and, accordingly, included examining, on a test basis, evidence about the Company's compliance with the applicable servicing criteria and performing such other procedures as we considered necessary in the circumstances. Our examination included testing of selected asset-backed transactions and securities that comprise the Platform, testing of selected servicing activities related to the Platform, and determining whether the Company processed those selected transactions and performed those selected activities in compliance with the applicable servicing criteria. Our procedures were limited to the selected transactions and servicing activities performed by the Company during the period covered by this report. Our procedures were not designed to detect noncompliance arising from errors that may have occurred prior to or subsequent to our tests that may 1 (page) have affected the balances or amounts calculated or reported by the Company during the period covered by this report. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Company's compliance with the servicing criteria. In our opinion, management's assertion that the Asserting Party complied with the aforementioned applicable servicing criteria as of and for the year ended December 31, 2006 for the Platform is fairly stated, in all material respects. /s/ Pricewaterhousecoopers LLP Atlanta, Georgia February 23, 2007 2 EX-34 (b) (logo) KPMG KPMG LLP 303 East Wacker Drive Chicago, IL 60601-5212 Report of Independent Registered Public Accounting Firm The Board of Directors The Trust & Securities Services department of Deutsche Bank National Trust Company and Deutsche Bank Trust Company Americas: We have examined management's assertion, included in the accompanying Appendix I, that the Trust & Securities Services department of Deutsche Bank National Trust Company and Deutsche Bank Trust Company Americas (collectively the "Company") complied with the servicing criteria set forth in Item 1122(d) of the Securities and Exchange Commission's Regulation AB for publicly-issued (i.e., transaction-level reporting required under the Securities Exchange Act of 1934, as amended) residential mortgage-backed securities and other asset-backed securities issued on or after January 1, 2006, for which the Company provides trustee, securities administration or paying agent services, excluding any publicly issued transactions, sponsored or issued by any government sponsored entity (the Platform), except for servicing criteria 1122(d)(2)(iii), 1122(d)(4)(iv), 1122(d)(4)(v), 1122(d)(4)(vi), 1122(d)(4)(vii), 1122(d)(4) (viii), 1122(d)(4)(ix), 1122(d)(4)(x), 1122(d)(4)(xi), 1122(d)(4)(xii), 1122(d) (4)(xiii) and 1122(d)(4)(xiv ), which the Company has determined are not applicable to the activities it performs with respect to the Platform, as of and for the twelve months ended December 31, 2006. Management is responsible for the Company's compliance with those servicing criteria. Our responsibility is to express an opinion on management's assertion about the Company's compliance based on our examination. Our examination was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) and, accordingly,included examining, on a test basis, evidence about the Company's compliance with the servicing criteria specified above and performing such other procedures as we considered necessary in the circumstances. Our examination included testing of less than all of the individual asset-backed transactions and securities that comprise the Platform, testing of less than all of the servicing activities related to the Platform, and determining whether the Company processed those selected transactions and performed those selected activities in compliance with the servicing criteria. Furthermore, our procedures were limited to the selected transactions and servicing activities performed by the Company during the period covered by this report. Our procedures were not designed to determine whether errors may have occurred either prior to or subsequent to our tests that may have affected the balances or amounts calculated or reported by the Company during the period covered by this report for the selected transactions or any other transactions. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Company's compliance with the servicing criteria. As described in management's assertion included in the accompanying Appendix I, for servicing criteria 1122 (d)(2)(i), 1122 (d)(4)(i) and 1122(d)(4)(ii), the Company has engaged various vendors to perform the activities required by these servicing criteria. The Company has determined that these vendors are not considered a "servicer" as defined in Item 1101(j) of Regulation AB, and the Company has elected to take responsibility for assessing compliance with the servicing criteria applicable to each vendor as permitted by Interpretation 17.06 of the SEC (page) (logo) KPMG Division of Corporation Finance Manual of Publicly Available Telephone Interpretations ("Interpretation 17.06"). As permitted by Interpretation 17.06, the Company has asserted that it has policies and procedures in place designed to provide reasonable assurance that the vendors' activities comply in all material respects with the servicing criteria applicable to each vendor. The Company is solely responsible for determining that it meets the SEC requirements to apply Interpretation 17.06 for the vendors and related criteria as described in its assertion, and we performed no procedures with respect to the Company's eligibility to apply Interpretation 17.06. In our opinion, management's assertion that the Company complied with the aforementioned servicing criteria, including servicing criteria 1122 (d)(2)(i), 1122 (d)(4)(i) and 1122(d)(4)(ii) for which compliance is determined based on Interpretation 17.06 as described above, as of and for the twelve months ended December 31, 2006 is fairly stated, in all material respects. /s/ KPMG LLP Chicago, Illinois February 28, 2007 KPMG LLP, a U.S. limited liability partnership, is the U.S. member firm of KPMG International, a Swiss cooperative. EX-34 (c) (logo) PRICEWATERHOUSECOOPERS PricewaterhouseCoopers LLP Suite 1800 2001 Ross Ave. Dallas TX 75201-2997 Telephone (214) 999 1400 Facsimile (214) 754 7991 www.pwc.com Report of Independent Registered Public Accounting Firm To the Board of Directors of The First American Corporation: We have examined First American Real Estate Solutions of Texas, L.P.'s (the "Company" and an indirect subsidiary of The First American Corporation), compliance with the servicing criteria set forth in Item 1122(d) of the Securities and Exchange Commission's Regulation AB for all loans for residential mortgage loan outsourcing customers for which the Company served as the residential tax service provider (the "Platform") described in the accompanying Report on Assessment of Compliance, as of December 31, 2006 and for the year then ended, excluding criteria 1122(d)(1)(i)-(iii), 1122(d)(2)(i)-(iv), 1122(d)(3)(i)-(iv), 1122(d)(4)(i)-(x) and 1122(d)(4)(xiv)-(xv), which the Company has determined are not applicable to the servicing activities performed by it with respect to the Platform. Management is responsible for the Company's compliance with the servicing criteria. Our responsibility is to express an opinion on the Company's compliance with the servicing criteria based on our examination. Our examination was conducted in accordance with standards of the Public Company Accounting Oversight Board (United States) and, accordingly, included examining, on a test basis, evidence about the Company's compliance with the applicable servicing criteria and performing such other procedures as we considered necessary in the circumstances. Our examination included testing of selected securities that comprise the Platform, testing of selected servicing activities related to the Platform, and determining whether the Company processed those selected transactions and performed those selected activities in compliance with the applicable servicing criteria. Our procedures were limited to the selected transactions and servicing activities performed by the Company during the period covered by this report. Our procedures were not designed to detect noncompliance arising from errors that may have occurred prior to or subsequent to our tests that may have affected the balances or amounts calculated or reported by the Company during the period covered by this report. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Company's compliance with the servicing criteria. Our examination disclosed the following material instance of noncompliance with the servicing criteria set forth in Item 1122(d)(2)(vii)(B) of Regulation AB applicable to the Company during year ended December 31, 2006. Account reconciliations for all asset-backed securities related bank accounts were not prepared within 30 calendar days after the bank statement cutoff date, or such other number of days specified in the transaction agreements as required by Item 1122(d)(2)(vii)(B) of Regulation AB. In our opinion, except for the material instance of noncompliance described in the preceding paragraph, First American Real Estate Solutions of Texas, L.P. complied with the aforementioned applicable servicing criteria as of and for the year ended December 31, 2006 for all loans for residential mortgage loan outsourcing customers for which the Company served as the residential tax service provider, in all material respects. /s/ Pricewaterhousecoopers LLP February 28, 2007 EX-34 (d) EXHIBIT C (logo) Grant Thornton Accountants and Business Advisors REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors and Shareholders LandAmerica Tax and Flood Services, Inc. We have examined management's assertion, included in the accompanying Report on Assessment of Compliance with Regulation AB Servicing Criteria ("Management's Report"), that LandAmerica Tax and Flood Services, Inc. (the "Company") complied with the servicing criteria set forth in Item 1122(d) of the U.S. Securities and Exchange Commission's Regulation AB for the residential mortgage backed securities for which the Company served as third-party property tax payment provider on the underlying collateral (the "Platform") as of and for the year ended December 31, 2006, excluding criteria 1122(d)(1)(i)-(iv), 1122(d)(2)(i)-(vii), 1122(d)(3)(i)-(iv), 1122(d)(4)(i)-(x) and 1122(d)(4)(xiii)-(xv), which management has determined are not applicable to the activities performed by the Company with respect to the Platform. Management is responsible for the Company's compliance with the applicable servicing criteria. Our responsibility is to express an opinion on management's assertion about the Company's compliance with the applicable servicing criteria for the Platform based on our examination. Our examination was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) and, accordingly, included examining, on a test basis, evidence about the Company's compliance with the applicable servicing criteria for the Platform and performing such other procedures as we considered necessary in the circumstances. Our examination included testing selected asset-backed transactions and securities constituting the Platform and evaluating whether the Company performed servicing activities related to those transactions and securities in compliance with the applicable servicing criteria for the period covered by this report. Accordingly, our testing may not have included servicing activities related to each asset-backed transaction or security constituting the Platform. Further, our examination was not designed to detect material noncompliance that may have occurred prior to the period covered by this report and that may have affected the Company's servicing activities during the period covered by this report. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Company's compliance with the applicable servicing criteria. In our opinion, management's assertion that LandAmerica Tax and Flood Services, Inc. complied with the aforementioned applicable servicing criteria as of and for the year ended December 31, 2006 is fairly stated, in all material respects. /s/ Grant Thornton LLP Irvine, CA February 20, 2007 18400 Von Karman Avenue Suite 900 Irvine, CA 92612-0525 T 949.553.1600 F 949.553.0168 W www.grantthornton.com Grant Thornton LLP US member of Grant Thornton International EX-34 (e) (logo) Crowe Crowe Chizek and Company LLC Member Horwath International REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Audit Committee Ocwen Loan Servicing, LLC West Palm Beach, Florida We have examined management's assertion, included in the accompanying report, that Ocwen Loan Servicing, LLC (the Company) complied with the servicing criteria set forth in Item 1122(d) of the U.S. Securities and Exchange Commission's Regulation AB for the Residential Mortgage Loans Platform (the "Platform") as of and for the year ended December 31, 2006, excluding criteria 1122(1)(iii) and 1122(4)(xv), which management has determined are not applicable to the activities performed by the Company with respect to the Platform. The Platform consists of the asset-backed transactions and securities defined by management in Appendix B of Management's Report. Management is responsible for the Company's compliance with those minimum servicing standards. Our responsibility is to express an opinion on management's assertion about the Company's compliance based on our examination. Our examination was conducted in accordance with the standards established by the American Institute of Certified Public Accountants, as adopted by the Public Company Accounting Oversight Board (United States), and, accordingly, included examining, on a test basis, evidence about the Company's compliance with the applicable servicing criteria for the Platform and performing such other procedures as we considered necessary in the circumstances. Our examination included testing selected asset-backed transactions and securities constituting the Platform and evaluating whether the Company performed servicing activities related to those transactions and securities in compliance with the applicable servicing criteria for the period covered by this report. Accordingly, our testing may not have included servicing activities related to each asset-backed transaction or security constituting the Platform. Further, our examination was not designed to detect material noncompliance that may have occurred prior to the period covered by this report and that may have affected the Company's servicing activities during the period covered by this report. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Company's compliance with the applicable servicing criteria. In our opinion, management's assertion referred to above is fairly stated, in all material respects, based on the aforementioned applicable servicing criteria. /s/ Crowe Chizek and Company LLC Crowe Chizek and Company LLC Fort Lauderdale, Florida March 8, 2007 EX-34 (f) (logo) KPMG KPMG LLP 1601 Market Street Philadelphia, PA 19103-2499 Report of Independent Registered Public Accounting Firm The Board of Members Regulus Group LLC: We have examined management's assessment for those customers that management has informed us have requested confirmation of compliance, included in the accompanying Report on Assessment of Compliance with Regulation AB Servicing Criteria, that Regulus Group LLC complied with the servicing criteria set forth in Item 1122(d)(2)(i) and 1122(d)(4)(iv) of the Securities and Exchange Commission's Regulation AB for remittance processing services to those issuers of asset backed securities and servicers of loan and/or receivables portfolios that include pool assets for asset backed securities transactions (the Platform) as of and for the year ended December 31, 2006. Regulus Group LLC has determined that the remainder of the servicing criteria are not applicable to the activities it performs with respect to the Platform as of and for the year ended December 31, 2006. Management is responsible for the Company's compliance with those servicing criteria. Our responsibility is to express an opinion on management's assessment about the Company's compliance based on our examination. Our examination was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) and, accordingly, included examining, on a test basis, evidence about the Company's compliance with the servicing criteria specified above and performing such other procedures as we considered necessary in the circumstances. Our examination included testing of less than all of the individual asset-backed transactions and securities that comprise the Platform, testing of less than all of the servicing activities related to the Platform, and determining whether the Company processed those selected transactions and performed those selected activities in compliance with the servicing criteria. Furthermore, our procedures were limited to the selected transactions and servicing activities performed by the Company during the period covered by this report. Our procedures were not designed to determine whether errors may have occurred either prior to or subsequent to our tests that may have affected the balances or amounts calculated or reported by the Company during the period covered by this report for the selected transactions or any other transactions. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Company's compliance with the servicing criteria. In our opinion, management's assessment that the Company complied with the aforementioned servicing criteria as of and for the year ended December 31, 2006 is fairly stated, in all material respects. /s/ KPMG LLP Philadelphia, PA February 22, 2007 KPMG LLP, a U.S. limited liability partnership, is the U.S. member firm of KPMG International, a Swiss cooperative. EX-34 (g) (logo) KPMG KPMG LLP 1601 Market Street Philadelphia, PA 19103-2499 Report of Independent Registered Public Accounting Firm The Board of Members Regulus Group LLC: We have examined management's assessment for those customers that management has informed us have requested confirmation of compliance, included in the accompanying Report on Assessment of Compliance with Regulation AB Servicing Criteria, that Regulus Group LLC complied with the servicing criteria set forth in Item 1122(d)(2)(i) and 1122(d)(4)(iv) of the Securities and Exchange Commission's Regulation AB for remittance processing services to those issuers of asset backed securities and servicers of loan and/or receivables portfolios that include pool assets for asset backed securities transactions (the Platform) as of and for the year ended December 31, 2006. Regulus Group LLC has determined that the remainder of the servicing criteria are not applicable to the activities it performs with respect to the Platform as of and for the year ended December 31, 2006. Management is responsible for the Company's compliance with those servicing criteria. Our responsibility is to express an opinion on management's assessment about the Company's compliance based on our examination. Our examination was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) and, accordingly, included examining, on a test basis, evidence about the Company's compliance with the servicing criteria specified above and performing such other procedures as we considered necessary in the circumstances. Our examination included testing of less than all of the individual asset-backed transactions and securities that comprise the Platform, testing of less than all of the servicing activities related to the Platform, and determining whether the Company processed those selected transactions and performed those selected activities in compliance with the servicing criteria. Furthermore, our procedures were limited to the selected transactions and servicing activities performed by the Company during the period covered by this report. Our procedures were not designed to determine whether errors may have occurred either prior to or subsequent to our tests that may have affected the balances or amounts calculated or reported by the Company during the period covered by this report for the selected transactions or any other transactions. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Company's compliance with the servicing criteria. In our opinion, management's assessment that the Company complied with the aforementioned servicing criteria as of and for the year ended December 31, 2006 is fairly stated, in all material respects. /s/ KPMG LLP Philadelphia, PA February 22, 2007 KPMG LLP, a U.S. limited liability partnership, is the U.S. member firm of KPMG International, a Swiss cooperative. EX-34 (h) (logo) KPMG KPMG LLP 2500 Ruan Center 666 Grand Avenue Des Moines, IA 50309 Report of Independent Registered Public Accounting Firm The Board of Directors Wells Fargo Bank, N.A.: We have examined Wells Fargo Bank, N.A.'s (the Company) compliance with the servicing criteria set forth in Item 1122(d) of the Securities and Exchange Commission's Regulation AB for its primary servicing of residential mortgage loans by its Wells Fargo Home Mortgage division, other than the servicing of such loans for Freddie Mac, Fannie Mae, Ginnie Mae, state and local government bond programs, or a Federal Home Loan Bank (the Platform), except for servicing criteria 1122(d)(1)(iii) and 1122(d)(4)(xv), which the Company has determined are not applicable to the activities it performs with respect to the Platform, as of and for the year ended December 31, 2006. Management is responsible for the Company's compliance with those servicing criteria. Our responsibility is to express an opinion on the Company's compliance based on our examination. Our examination was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) and, accordingly, included examining, on a test basis, evidence about the Company's compliance with the servicing criteria specified above and performing such other procedures as we considered necessary in the circumstances. Our examination included testing of less than all of the individual asset-backed transactions and securities that comprise the Platform, testing of less than all of the servicing activities related to the Platform, and determining whether the Company processed those selected transactions and performed those selected activities in compliance with the servicing criteria. Furthermore, our procedures were limited to the selected transactions and servicing activities performed by the Company during the period covered by this report. Our procedures were not designed to determine whether errors may have occurred either prior to or subsequent to our tests that may have affected the balances or amounts calculated or reported by the Company during the period covered by this report for the selected transactions or any other transactions. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Company's compliance with the servicing criteria. Our examination disclosed the following instances of material noncompliance with certain servicing criteria applicable to the Company during the year ended December 31, 2006: 1. 1122(d)(3)(i) - Delinquency Reporting - The Company provided incomplete data to some third parties who use such data to calculate delinquency ratios and determine the status of loans with respect to bankruptcy, foreclosure or real estate owned. Instead of the actual due date being provided for use in calculating delinquencies, the date of the first payment due to the security was provided. 2. 1122(d)(4)(vii) - Notification of Intent to Foreclose - The Company, as required by certain servicing agreements, did not provide investors with prior notification of intent to foreclose. (page) (logo) KPMG As described in the accompanying 2006 Certification Regarding Compliance with Applicable Servicing Criteria, for servicing criteria 1122(d)(2)(i), 1122(d)(2)(vi), 1122(d)(4)(iv), 1122(d)(4)(xi), and 1122(d)(4)(xiii), the Company has engaged various vendors to perform the activities required by these servicing criteria. The Company has determined that these vendors are not considered "servicers" as defined in Item 1101(j) of Regulation AB, and the Company has elected to take responsibility for assessing compliance with the servicing criteria applicable to each vendor as permitted by Interpretation 17.06 of the SEC Division of Corporation Finance Manual of Publicly Available Telephone Interpretations ("Interpretation 17.06"), with the exception of those vendors who have provided their own reports on assessment of compliance with servicing criteria to the Company, for which the Company does not take such responsibility. As permitted by Interpretation 17.06, the Company has asserted that it has policies and procedures in place designed to provide reasonable assurance that the vendors' activities comply in all material respects with the servicing criteria applicable to each vendor. The Company is solely responsible for determining that it meets the SEC requirements to apply Interpretation 17.06 for the vendors and related criteria as described in its assertion, and we performed no procedures with respect to the Company's eligibility to apply Interpretation 17.06. In our opinion, except for the instances of material noncompliance described above, the Company complied, in all material respects, with the aforementioned servicing criteria as of and for the year ended December 31, 2006. /s/ KPMG LLP Des Moines, Iowa March 1, 2007 KPMG LLP, a U.S. limited liability partnership, is the U.S. member firm of KPMG International, a Swiss cooperative. EX-34 (i) (logo) KPMG KPMG LLP 303 East Wacker Drive Chicago, IL 60801-5212 Report of Independent Registered Public Accounting Firm The Board of Directors The Corporate Trust Services division of Wells Fargo Bank, National Association: We have examined the compliance of the Corporate Trust Services division of Wells Fargo Bank, National Association (the Company) with the servicing criteria set forth in Item 1122(d) of the Securities and Exchange Commission's Regulation AB for publicly-issued (i.e., transaction-level reporting initially required under the Securities Exchange Act of 1934, as amended) residential mortgage-backed securities, commercial mortgage-backed securities and other asset-backed securities, for which the Company provides master servicing, trustee, securities administration or paying agent services, excluding transactions issued by any agency or instrumentality of the U.S. government or any government sponsored entity (the Platform), except for servicing criteria 1122(d)(1)(iii), 1122(d)(4)(ii), 1122(d)(4)(iv), 1122(d)(4)(v), 1122(d)(4)(viii), 1122(d)(4)(ix), 1122(d)(4)(x), 1122(d)(4)(xi), 1122(d)(4)(xii) and 1122(d)(4)(xiii), which the Company has determined are not applicable to the activities it performs with respect to the Platform, as of and for the twelve months ended December 31, 2006. Management is responsible for the Company's compliance with those servicing criteria. Our responsibility is to express an opinion on management's assertion about the Company's compliance based on our examination. Our examination was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) and, accordingly, included examining, on a test basis, evidence about the Company's compliance with the servicing criteria specified above and performing such other procedures as we considered necessary in the circumstances. Our examination included testing of less than all of the individual asset-backed transactions and securities that comprise the Platform, testing of less than all of the servicing activities related to the Platform, and determining whether the Company processed those selected transactions and performed those selected activities in compliance with the servicing criteria. Furthermore, our procedures were limited to the selected transactions and servicing activities performed by the Company during the period covered by this report. Our procedures were not designed to determine whether errors may have occurred either prior to or subsequent to our tests that may have affected the balances or amounts calculated or reported by the Company during the period covered by this report for the selected transactions or any other transactions. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Company's compliance with the servicing criteria. As described in the accompanying management's Assessment of Compliance With Applicable Servicing Criteria, for servicing criteria 1122(d)(4)(i), the Company has engaged various vendors to perform the activities required by these servicing criteria. The Company has determined that these vendors are not considered a "servicer" as defined in Item 1101(j) of Regulation AB, and the Company has elected to take responsibility for assessing compliance with the servicing criteria applicable to each vendor as permitted by Interpretation 17.06 of the SEC Division of Corporation Finance Manual of Publicly Available Telephone Interpretations ("Interpretation 17.06"). As permitted by Interpretation 17.06, the Company has asserted that it has policies and KPMG LLP, a U.S. limited liability partnership, in the U.S. member firm of KPMG International, a Swiss cooperative. (page) (logo) KPMG procedures in place designed to provide assurance that the vendors' activities comply in all material respects with the servicing criteria applicable to each vendor. The Company is solely responsible for determining that it meets the SEC requirements to apply Interpretation 17.06 for the vendors and related criteria as described in its assertion, and we performed no procedures with respect to the Company's eligibility to apply Interpretation 17.06. Our examination disclosed material noncompliance with criterion 1122(d)(3)(i), as applicable to the Company during the twelve months ended December 31, 2006. Certain monthly investor or remittance reports included errors in the calculation and/or the reporting of delinquencies for the pool assets. In our opinion, except for the material non-compliance described above, the Company complied, in all material respects, with the aforementioned servicing criteria, including servicing criteria for which compliance is determined based on Interpretation 17.06 as discussed above, as of and for the twelve months ended December 31, 2006. /s/ KPMG LLP Chicago, IL 60601 March 1, 2007 EX-34 (j) (logo) KPMG KPMG LLP 303 East Wacker Drive Chicago, IL 60801-5212 Report of Independent Registered Public Accounting Firm The Board of Directors The Corporate Trust Services division of Wells Fargo Bank, National Association: We have examined the compliance of the Corporate Trust Services division of Wells Fargo Bank, National Association (the Company) with the servicing criteria set forth in Item 1122(d) of the Securities and Exchange Commission's Regulation AB for publicly-issued (i.e., transaction-level reporting initially required under the Securities Exchange Act of 1934, as amended) residential mortgage-backed securities, commercial mortgage-backed securities and other asset-backed securities, for which the Company provides master servicing, trustee, securities administration or paying agent services, excluding transactions issued by any agency or instrumentality of the U.S. government or any government sponsored entity (the Platform), except for servicing criteria 1122(d)(1)(iii), 1122(d)(4)(ii), 1122(d)(4)(iv), 1122(d)(4)(v), 1122(d)(4)(viii), 1122(d)(4)(ix), 1122(d)(4)(x), 1122(d)(4)(xi), 1122(d)(4)(xii) and 1122(d)(4)(xiii), which the Company has determined are not applicable to the activities it performs with respect to the Platform, as of and for the twelve months ended December 31, 2006. Management is responsible for the Company's compliance with those servicing criteria. Our responsibility is to express an opinion on management's assertion about the Company's compliance based on our examination. Our examination was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) and, accordingly, included examining, on a test basis, evidence about the Company's compliance with the servicing criteria specified above and performing such other procedures as we considered necessary in the circumstances. Our examination included testing of less than all of the individual asset-backed transactions and securities that comprise the Platform, testing of less than all of the servicing activities related to the Platform, and determining whether the Company processed those selected transactions and performed those selected activities in compliance with the servicing criteria. Furthermore, our procedures were limited to the selected transactions and servicing activities performed by the Company during the period covered by this report. Our procedures were not designed to determine whether errors may have occurred either prior to or subsequent to our tests that may have affected the balances or amounts calculated or reported by the Company during the period covered by this report for the selected transactions or any other transactions. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Company's compliance with the servicing criteria. As described in the accompanying management's Assessment of Compliance With Applicable Servicing Criteria, for servicing criteria 1122(d)(4)(i), the Company has engaged various vendors to perform the activities required by these servicing criteria. The Company has determined that these vendors are not considered a "servicer" as defined in Item 1101(j) of Regulation AB, and the Company has elected to take responsibility for assessing compliance with the servicing criteria applicable to each vendor as permitted by Interpretation 17.06 of the SEC Division of Corporation Finance Manual of Publicly Available Telephone Interpretations ("Interpretation 17.06"). As permitted by Interpretation 17.06, the Company has asserted that it has policies and KPMG LLP, a U.S. limited liability partnership, in the U.S. member firm of KPMG International, a Swiss cooperative. (page) (logo) KPMG procedures in place designed to provide assurance that the vendors' activities comply in all material respects with the servicing criteria applicable to each vendor. The Company is solely responsible for determining that it meets the SEC requirements to apply Interpretation 17.06 for the vendors and related criteria as described in its assertion, and we performed no procedures with respect to the Company's eligibility to apply Interpretation 17.06. Our examination disclosed material noncompliance with criterion 1122(d)(3)(i), as applicable to the Company during the twelve months ended December 31, 2006. Certain monthly investor or remittance reports included errors in the calculation and/or the reporting of delinquencies for the pool assets. In our opinion, except for the material non-compliance described above, the Company complied, in all material respects, with the aforementioned servicing criteria, including servicing criteria for which compliance is determined based on Interpretation 17.06 as discussed above, as of and for the twelve months ended December 31, 2006. /s/ KPMG LLP Chicago, IL 60601 March 1, 2007 EX-34 (k) (logo) KPMG KPMG LLP 303 East Wacker Drive Chicago, IL 60801-5212 Report of Independent Registered Public Accounting Firm The Board of Directors The Corporate Trust Services division of Wells Fargo Bank, National Association: We have examined the compliance of the Corporate Trust Services division of Wells Fargo Bank, National Association (the Company) with the servicing criteria set forth in Item 1122(d) of the Securities and Exchange Commission's Regulation AB for publicly-issued (i.e., transaction-level reporting initially required under the Securities Exchange Act of 1934, as amended) residential mortgage-backed securities, commercial mortgage-backed securities and other asset-backed securities, for which the Company provides master servicing, trustee, securities administration or paying agent services, excluding transactions issued by any agency or instrumentality of the U.S. government or any government sponsored entity (the Platform), except for servicing criteria 1122(d)(1)(iii), 1122(d)(4)(ii), 1122(d)(4)(iv), 1122(d)(4)(v), 1122(d)(4)(viii), 1122(d)(4)(ix), 1122(d)(4)(x), 1122(d)(4)(xi), 1122(d)(4)(xii) and 1122(d)(4)(xiii), which the Company has determined are not applicable to the activities it performs with respect to the Platform, as of and for the twelve months ended December 31, 2006. Management is responsible for the Company's compliance with those servicing criteria. Our responsibility is to express an opinion on management's assertion about the Company's compliance based on our examination. Our examination was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) and, accordingly, included examining, on a test basis, evidence about the Company's compliance with the servicing criteria specified above and performing such other procedures as we considered necessary in the circumstances. Our examination included testing of less than all of the individual asset-backed transactions and securities that comprise the Platform, testing of less than all of the servicing activities related to the Platform, and determining whether the Company processed those selected transactions and performed those selected activities in compliance with the servicing criteria. Furthermore, our procedures were limited to the selected transactions and servicing activities performed by the Company during the period covered by this report. Our procedures were not designed to determine whether errors may have occurred either prior to or subsequent to our tests that may have affected the balances or amounts calculated or reported by the Company during the period covered by this report for the selected transactions or any other transactions. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Company's compliance with the servicing criteria. As described in the accompanying management's Assessment of Compliance With Applicable Servicing Criteria, for servicing criteria 1122(d)(4)(i), the Company has engaged various vendors to perform the activities required by these servicing criteria. The Company has determined that these vendors are not considered a "servicer" as defined in Item 1101(j) of Regulation AB, and the Company has elected to take responsibility for assessing compliance with the servicing criteria applicable to each vendor as permitted by Interpretation 17.06 of the SEC Division of Corporation Finance Manual of Publicly Available Telephone Interpretations ("Interpretation 17.06"). As permitted by Interpretation 17.06, the Company has asserted that it has policies and KPMG LLP, a U.S. limited liability partnership, in the U.S. member firm of KPMG International, a Swiss cooperative. (page) (logo) KPMG procedures in place designed to provide assurance that the vendors' activities comply in all material respects with the servicing criteria applicable to each vendor. The Company is solely responsible for determining that it meets the SEC requirements to apply Interpretation 17.06 for the vendors and related criteria as described in its assertion, and we performed no procedures with respect to the Company's eligibility to apply Interpretation 17.06. Our examination disclosed material noncompliance with criterion 1122(d)(3)(i), as applicable to the Company during the twelve months ended December 31, 2006. Certain monthly investor or remittance reports included errors in the calculation and/or the reporting of delinquencies for the pool assets. In our opinion, except for the material non-compliance described above, the Company complied, in all material respects, with the aforementioned servicing criteria, including servicing criteria for which compliance is determined based on Interpretation 17.06 as discussed above, as of and for the twelve months ended December 31, 2006. /s/ KPMG LLP Chicago, IL 60601 March 1, 2007 EX-34 (l) (logo) KPMG KPMG LLP 303 East Wacker Drive Chicago, IL 60601-5212 Report of Independent Registered Public Accounting Firm The Board of Directors The Corporate Trust Services division of Wells Fargo Bank National Association: We have examined management's assertion, included in the accompanying Appendix I, that the Document Custody section of the Corporate Trust Services division of Wells Fargo Bank National Association complied with the servicing criteria set forth in Item 1122(d) of the Securities and Exchange Commission's Regulation AB for publicly-issued (i.e., transaction-level reporting required under the Securities Exchange Act of 1934, as amended) residential mortgage-backed securities and commercial mortgage-backed securities issued on or after January 1, 2006 for which the Company provides document custody services, excluding any publicly issued transactions issued by any government sponsored entity (the Platform) as of and for the twelve months ended December 31, 2006. Management has determined that servicing criteria 1122(d)(4)(i) and 1122(d)(4)(ii) are applicable to the activities it performs with respect to the Platform, and that all other servicing criteria set forth in Item 1122(d) are not applicable to the document custody services provided by the Company with respect to the Platform. Management is responsible for the Company's compliance with those servicing criteria. Our responsibility is to express an opinion on management's assertion about the Company's compliance based on our examination. Our examination was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) and, accordingly, included examining, on a test basis, evidence about the Company's compliance with the servicing criteria specified above and performing such other procedures as we considered necessary in the circumstances. Our examination included testing of less than all of the individual asset-backed transactions and securities that comprise the Platform, testing of less than all of the servicing activities related to the Platform, and determining whether the Company processed those selected transactions and performed those selected activities in compliance with the servicing criteria. Furthermore, our procedures were limited to the selected transactions and servicing activities performed by the Company during the period covered by this report. Our procedures were not designed to determine whether errors may have occurred either prior to or subsequent to our tests that may have affected the balances or amounts calculated or reported by the Company during the period covered by this report for the selected transactions or any other transactions. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Company's compliance with the servicing criteria. In our opinion, management's assertion that the Company complied with the aforementioned servicing criteria as of and for the period ended December 31, 2006 is fairly stated, in all material respects. /s/ KPMG LLP Chicago, Illinois March 1, 2007 KPMG LLP, a U.S. limited liability partnership, is the U.S. member firm of KPMG International, a Swiss cooperative. EX-34 (m) (logo) ERNST & YOUNG Ernst & Young LLP Suite 2800 600 Peachtree Street Atlanta, Georgia 30308-2215 Phone: (404) 874-8300 www.ey.com Report of Independent Registered Public Accounting Firm We have examined management's assertion, included in the accompanying Report on Assessment of Compliance with Securities and Exchange Commission's Regulation AB Servicing Criteria, that ZC Sterling Insurance Agency, Inc. (the Company) complied with certain servicing criteria set forth in Item 1122(d) of the Securities and Exchange Commission's Regulation AB for the ZC Sterling Integrated Product Solution (ZIPS) hazard insurance outsourcing Platform (Platform) as of and for the year ended December 31, 2006. The Company has determined that only certain servicing criteria 1122 (d) 1(iv), 1122 (d) 2(vi), 1122 (d) 4(xi), 1122 (d) 4(xii), and 1122 (d) 4(xiii) are applicable to the activities performed by them with respect to the Platform covered by this report. The Company has determined that the remaining servicing criteria set forth in Item 1122(d) of the Securities and Exchange Commission's Regulation AB are not applicable to the activities performed by them with respect to the Platform covered by this report. See Appendix A of management's assertion for the Platform covered by this report. Management is responsible for the Company's compliance with those servicing criteria, Our responsibility is to express an opinion on management's assertion about the Company's compliance with the servicing criteria based on our examination. Our examination was conducted in accordance with standards of the Public Company Accounting Oversight Board (United States) and, accordingly, included examining, on a test basis, evidence about the Company's compliance with the applicable servicing criteria and performing such other procedures as we considered necessary in the circumstances. Our examination included testing of less than all of the servicing activities related to the Platform, and determining whether the Company performed those selected activities in compliance with the servicing criteria. Furthermore, our procedures were limited to the servicing activities performed by the Company during the period covered by this report. Our procedures were not designed to determine whether errors may have occurred either prior to or subsequent to our tests that may have affected the balances or amounts calculated or reported by the Company during the period covered by this report for the Platform. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Company's compliance with the servicing criteria. In our opinion, management's assertion that the Company complied with the aforementioned servicing criteria as of and for the year ended December 31, 2006 for the ZIPS Platform is fairly stated, in all material respects. /s/ Ernst & Young LLP February 20, 2007 A Member Practice of Ernst & Young Global EX-35 (a) (logo) FREMONT Investment & Loan SERVICER ANNUAL STATEMENT OF COMPLIANCE Re: The Trusts listed on Exhibit 1 I, John Alkire, Senior Vice President, Loan Servicing for the calendar year ended December 31, 2006, certify to the Depositor, Trustee and Master Servicer listed parties to the respective Pooling and Servicing Agreements set forth on Exhibit 1, and their respective officers, directors and affiliates, and with the knowledge and intent that they will rely upon this certification, that for the calendar year ended December 31, 2006. (i) A review of activities of Fremont Investment & Loan (the "Servicer") during the preceding calendar year or portion thereof and of the Servicer's performance under the Pooling and Servicing Agreements listed on the attached Exhibit 1 (the "Agreements") has been made under my supervision and (ii) To the best of my knowledge, based on such review, the Servicer has fulfilled all of its obligations under the Agreements, in all material respects throughout such year or portion thereof. Capitalized terms used and not otherwise defined herein have the meanings assigned thereto in the related Pooling and Servicing Agreements set forth on the attached Exhibit 1. Date: March 20, 2007 /s/ John Alkire John Alkire Senior Vice President, Loan Servicing LEGAL 2727 E. IMPERIAL HWY Brea, CA 92821 Member FDIC Serving our customers since 1937 (page) EXHIBIT 1 FREMONT * Fremont Home Loan Trust 2006-A pursuant to a Pooling & Servicing Agreement dated May 1, 2006, among Financial Asset Securities Corp as Depositor, Fremont Investment & Loan as Sponsor, Wells Fargo Bank, N.A. as Master Servicer and HSBC Bank USA, National Association as Trustee * Fremont Home Loan Trust 2006-B pursuant to a Pooling & Servicing Agreement dated August 1, 2006, among Fremont Mortgage Securities Corporation as Depositor, Fremont Investment & Loan as Originator, Wells Fargo Bank, N.A. as Master Servicer and HSBC Bank USA, National Association as Trustee * Fremont Home Loan Trust 2006-C pursuant to a Pooling & Servicing Agreement dated September 1, 2006, among Fremont Mortgage Securities Corporation as Depositor, Fremont Investment & Loan as Originator, Wells Fargo Bank, N.A. as Master Servicer and HSBC Bank USA, National Association as Trustee * Fremont Home Loan Trust 2006-D pursuant to a Pooling & Servicing Agreement dated November 1, 2006, among Fremont Mortgage Securities Corporation as Depositor, Fremont Investment & Loan as Sponsor, Wells Fargo Bank, N.A. as Master Servicer and HSBC Bank USA, National Association as Trustee * Fremont Home Loan Trust 2006-E pursuant to a Pooling & Servicing Agreement dated December 1, 2006, among Fremont Mortgage Securities Corporation as Depositor, Fremont Investment & Loan as Sponsor, Wells Fargo Bank, N.A. as Master Servicer and HSBC Bank USA, National Association as Trustee * Fremont Home Loan Trust 2005-A pursuant to a Pooling & Servicing Agreement dated February 1, 2005, among Fremont Mortgage Securities Corporation, Fremont Investment & Loan, Wells Fargo Bank, N.A. and HSBC Bank USA, National Association * Fremont Home Loan Trust 2005-B pursuant to a Pooling & Servicing Agreement dated May 1, 2005, among Fremont Mortgage Securities Corporation, Fremont Investment & Loan, Wells Fargo Bank, N.A. and HSBC Bank USA, National Association * Fremont Home Loan Trust 2005-C pursuant to a Pooling & Servicing Agreement dated July 1, 2005, among Fremont Mortgage Securities Corporation, Fremont Investment & Loan, Wells Fargo Bank, N.A. and HSBC Bank USA, National Association * Fremont Home Loan Trust 2005-D pursuant to a Pooling & Servicing Agreement dated November 1, 2005, among Fremont Mortgage Securities Corporation, Fremont Investment & Loan, Wells Fargo Bank, N.A. and HSBC Bank USA, National Association * Fremont Home Loan Trust 2005-E pursuant to a Pooling & Servicing Agreement dated December 1, 2005, among Fremont Mortgage Securities Corporation, Fremont Investment & Loan, Wells Fargo Bank, N.A. and HSBC Bank USA, National Association * Fremont Home Loan Trust 2004-A pursuant to a Pooling & Servicing Agreement dated February 1, 2004, among GS Mortgage Securities Corp., Fremont Investment & Loan, Wells Fargo Bank Minnesota, National Association and HSBC Bank USA * Fremont Home Loan Trust 2004-B pursuant to a Pooling & Servicing Agreement dated May 1, 2004, among Financial Asset Securities Corp., Fremont Investment & Loan, Wells Fargo Bank, N.A. and HSBC Bank USA * Fremont Home Loan Trust 2004-C pursuant to a Pooling & Servicing Agreement dated August 1, 2004, among Fremont Mortgage Securities Corporation, Fremont Investment & Loan, Wells Fargo Bank, N.A. and HSBC Bank USA, National Association * Fremont Home Loan Trust 2004-D pursuant to a Pooling & Servicing Agreement dated November 1, 2004, among Fremont Mortgage Securities Corporation, Fremont Investment & Loan, Wells Fargo Bank, N.A. and HSBC Bank USA, National Association * Fremont Home Loan Trust 2003-A pursuant to a Pooling & Servicing Agreement dated August 1, 2003, among Financial Asset Securities Corp., Fremont Investment & Loan, Wells Fargo Bank Minnesota, National Association and HSBC Bank USA * Fremont Home Loan Trust 2003-B pursuant to a Pooling & Servicing Agreement dated November 1, 2003, among Asset Backed Securities Corporation, Fremont Investment & Loan, Wells Fargo Bank Minnesota, National Association and HSBC Bank USA CARRINGTON * Carrington Mortgage Loan Trust 2005-FRE1 pursuant to a Pooling & Servicing Agreement dated October 1, 2005, among Stanwich Asset Acceptance Company, L.L.C., Deutsche Bank National Trust Company and Fremont Investment & Loan * Carrington Mortgage Loan Trust 2006-FRE1 pursuant to a Pooling & Servicing Agreement dated June 1, 2006, among Stanwich Asset Acceptance Company, L.L.C., Fremont Investment & Loan And Wells Fargo Bank, N.A. * Carrington Mortgage Loan Trust 2006-FRE2 pursuant to a Pooling & Servicing Agreement dated October 1, 2006, among Stanwich Asset Acceptance Company, L.L.C., Fremont Investment & Loan and Wells Fargo Bank, N.A. CREDIT SUISSE - DLJ/CSFB * CSFB Home Equity Pass-Through Certificates 2004-FRE1 pursuant to a Pooling & Servicing Agreement dated August 1, 2004, among Credit Suisse First Boston Mortgage Securities Corp., DLJ Mortgage Capital, INC., Fremont Investment & Loan, Wells Fargo Bank, N.A., The Murrayhill Company, and U.S. Bank National Association (page) DEUTSCHE * ACE Securities Corp. Home Equity Loan Trust 2006 FM1 pursuant to a Pooling & Servicing Agreement dated August 1, 2006, among ACE Securities Corp., Fremont Investment & Loan, Wells Fargo Bank, N.A. and HSBC Bank USA, National Association * Interim - DB Structured Products, Inc Series 2006 FM2 pursuant to a Mortgage Loan Purchase and Interim Servicing Agreement dated May 1, 2004, among Fremont Investment & Loan and DB Structured Products, Inc. * Interim - DB Structured Products, Inc Series 2006 HE1 pursuant to Master Mortgage Loan Purchase and Interim Servicing Agreement dated May 1, 2004, among Fremont Investment & Loan and DB Structured Products, Inc. GREENWICH * Interim - Fremont Home Loan Trust 20061 pursuant to a Mortgage Loan Purchase and Interim Servicing Agreement dated December 1, 2005, among Financial Asset Securities Corp., Fremont Investment & Loan, Deutsche Bank National Trust Company and Wells Fargo Bank * Fremont Home Loan Trust 2006-2 pursuant to a Pooling & Servicing Agreement dated April 1, 2006, among Fremont Investment & Loan and Greenwich Capital Financial Products, Inc. * Interim - Fremont Home Loan Trust 2006-3 pursuant to a Mortgage Loan Purchase and Interim Servicing Agreement dated December 1, 2005, among Fremont Investment & Loan And Greenwich Capital Financial Products, Inc. GOLDMAN SACHS * GSAMP Trust 2006-FM2 pursuant to a Pooling & Servicing Agreement dated September 1, 2006, among GS Mortgage Securities Corp., Fremont Investment & Loan, Deutsche Bank National Trust Company and Wells Fargo Bank * GSAMP Trust 2006-FM3 pursuant to a Pooling & Servicing Agreement dated December 1, 2006, among GS Mortgage Securities Corp., Fremont Investment & Loan, Deutsche Bank National Trust Company and Wells Fargo Bank * Interim - GSAMP Trust 2006-HE2 pursuant to a Amended and Restated Flow Mortgage Loan Purchase and Warranties Agreement dated January 1, 2006, among Goldman Sachs Mortgage Company and Fremont Investment & Loan * Interim - GSAMP Trust 2006-HE3 pursuant to a Amended and Restated Flow Mortgage Loan Purchase and Warranties Agreement dated January 1, 2006, among Goldman Sachs Mortgage Company and Fremont Investment & Loan SOCIETE GENERAL * Interim - SG Mortgage Finance Corp. 2006-FRE2 pursuant to a Amended Mortgage Loan Purchase and Interim Servicing Agreement dated June 21, 2006, among Fremont Investment & Loan and SG Mortgage Finance Corp. Exhibit 1 Page 2 EX-35 (b) (logo) OCWEN ANNUAL SERVICER COMPLIANCE STATEMENT PURSUANT TO ITEM 1123 OF REGULATION AB March 8, 2007 RE: ACE 2006-HE1 For the fiscal year ended December 31, 2006 (the "Reporting Period"), Ocwen Loan Servicing, LLC ("OLS") furnishes this annual servicer compliance statement pursuant to Item 1123 of Regulation AB, indicating its compliance with the servicing standards of the Securities & Exchange Commission as set forth in Regulation AB, 17 CFR Section 229.1100, et seq., ("Regulation AB"). In this regard, I make the following representations, which are true to the best of my knowledge and belief in all material respects. 1. A review of the servicing activities of OLS during the Reporting Period, and of its performance under the Pooling and Servicing Agreement Dated February 1, 2006 (the "Agreement"), has been performed under my supervision. 2. To the best of my knowledge, based on this review, OLS has fulfilled all of its obligations under the Agreement in all material respects throughout the Reporting Period. By: /s/ Ronald M. Faris Name: Ronald M. Faris Title: President Ocwen Loan Servicing LLC 1661 Worthington Road Suite 100 Centrepark West West Palm Beach, FL 33409 EX-35 (c) (logo) WELLS FARGO HOME MORTGAGE Wells Fargo Home Mortgage One Home Campus Des Moines, IA 50328-0001 Wells Fargo Bank, N.A. Servicer Compliance Statement 1. I, John B. Brown, Senior Vice President of Wells Fargo Bank, N.A. ("Wells Fargo") hereby state that a review of the activities of Wells Fargo during the calendar year 2006 and of Wells Fargo's performance under the servicing agreement(s) listed on the attached Exhibit A (the "Servicing Agreement(s)") has been made under my supervision. 2. To the best of my knowledge, based on such review, Wells Fargo has fulfilled all of its obligations under the Servicing Agreement(s) in all material respects throughout 2006, with the exception of the following failure(s) to fulfill any such obligation in any material respect: For certain loans sub-serviced by Wells Fargo or for which servicing rights were acquired on a bulk-acquisition basis, Wells Fargo determined that it provided incomplete data to some third parties who use such data to calculate delinquency ratios and the status of loans with respect to bankruptcy, foreclosure or real estate owned. The incomplete reporting only affected securitizations that included delinquent loans. Instead of the actual due date being provided for use in calculating delinquencies, the date of the first payment due to the security was provided. Wells Fargo subsequently included additional data in monthly remittance reports, providing the actual borrower due date and unpaid principal balance, together with instructions to use these new fields if such monthly remittance reports are used to calculate delinquency ratios. /s/ John B. Brown John B. Brown Senior Vice President Wells Fargo Bank, N.A. March 1, 2007 Wells Fargo Home Mortgage is a division of Wells Fargo Bank N.A. (page) EXHIBIT A MASTER SERVICER/ CLIENT INV# INV TRUSTEE DEAL NAME 106 Q02 WACHOVIA PMSR LUMINENT 2 WELLS FARGO CTS LUMINENT 2006-3 (page) EXHIBIT A MASTER SERVICER/ CLIENT INV# INV TRUSTEE DEAL NAME 106 310 CS PMSR 2004-AR5 WFB CTS 2004-AR5 106 312 CS PMSR 2004-AR7 WFB CTS 2004-AR7 106 313 CS PMSR 2004-AR8 WFB CTS 2004-AR8 106 318 CS PMSR ARMT 2004-2 WFB CTS ARMT 2004-2 106 323 CS PMSR ARMT 2004-4 WEB CTS ARMT 2004-4 106 328 CS PMSR ARMT 2005-1 WFB CTS ARMT 2005-1 106 329 CS PMSR ARMT 2005-2 WFB CTS ARMT 2005-2 106 330 CSFB PMSR CSFB 2005-3 WFB CTS CSFB 2005-3 106 350 CS PMSR ARMT 2005-7 WFB CTS ARMT 2005-7 106 351 CSFB PMSR CSFB 2003-23 WFB CTS CSFB 2003-23 106 356 CS PMSR ARMT 2005-8 WFB CTS ARMT 2005-8 106 368 CS PMSR ARMT 2005-10 WFB CTS ARMT 2005-10 106 370 CS PMSR ARMT 2005-11 WFB CTS ARMT 2005-11 106 372 CSFB PMSR CSFB 2005-10 WFB CTS CSFB 2005-10 106 373 CSMC PMSR ARMT 2005-12 WFB CTS ARMT 2005-12 106 375 CSMC PMSR CSMC 2005-12 WFB CTS CSMC2005-12 106 376 CSMC PMSR CSMC 2006-1 WFB CTS CSMC 2006-1 106 377 CSMC PMSR ARMT 2006-1 WFB CTS ARMT 2006-1 106 378 CSMC PMSR ARMT2006-2 WFB CTS ARMT 2006-2 106 380 CSMC PMSR CSMC 2006-4 WFB CTS CSMC 2006-4 106 385 CSMC PMSR CSMC 2006-3 WFB CTS CSMC 2006-3 106 400 CSMC PMSR CSMC 2006-5 WFB CTS CSMC 2006-5 106 404 CSMC PMSR CSMC 2006-7 WFB CTS CSMC 2006-7 106 553 CS SUB ARMT 2005-12 WFB CTS ARMT 2005-12 106 554 CSFB SUB CSFB 2005-11 WFB CTS CSFB 2005-11 106 556 CSMC SUB CSMC 2006-4 WFB CTS CSMC 2006-4 106 557 CSMC SUB ARMT 2006-1 WFB CTS ARMT 2006-1 106 558 CSFB SUB CSFB 2005-12 WFB CTS CSFB 2005-12 106 560 CSMC SUB CSMC 2006-2 WFB CTS CSMC 2006-2 106 562 CSMC SUB CSMC 2006-1 WFB CTS CSMC 2006-1 106 564 CSMC SUB CSMC 2006-3 WFB CTS CSMC 2006-3 106 565 CSMC SUB ARMT 2006-2 WFB CTS ARMT 2006-2 106 569 CSMC SUB CSAB 2006-1 WFB CTS CSAB 2006-1 106 572 CSMC SUB CSMC 2006-7 WFB CTS CSMC 2006-7 106 574 CSMC SUB ARMT 2006-3 WFB CTS ARMT 2006-3 (page) EXHIBIT A MASTER SERVICER/ CLIENT INV# INV TRUSTEE DEAL NAME 106 201 HSBC PMSR HASCO 2006-WMC WELLS FARGO CTS HASCO 2006-WMC (page) EXHIBIT A MASTER SERVICER/ CLIENT INV# INV TRUSTEE DEAL NAME 106 M02 BARCLAYS PMSR SABR 2006- WELLS FARGO CTS SABR 2006-WM1 106 M03 BARCLAYS PMSR SABR2006NC WELLS FARGO CTS SABR 2006-NC1 106 M04 BARCLAYS PMSR SABR 06-NC WELLS FARGO CTS SABR 2006-NC2 (page) EXHIBIT A MASTER SERVICER/ CLIENT INV# INV TRUSTEE DEAL NAME 106 X11 DEUTSCHE PMSR ACE 06-HE1 WELLS FARGO CTS ACE 2006-HE1 106 X02 DEUTSCHE PMSR ACE 2005HE WELLS FARGO CTS ACE 2005-HE7 106 X09 DEUTSCHE PMSR DBALT 2006 WELLS FARGO CTS DBALT 2006-1 106 X10 DEUTSCHE PMSR DBALT 2006 WELLS FARGO CTS DBALT 2006-AR1 106 X12 DEUTSCHE PMSR DBALT06-AF WELLS FARGO CTS DBALT 2006-AF1 106 X14 DEUTSCHE PMSR DBALT06-AR WELLS FARGO CTS DBALT 2006-AR2 (page) EXHIBIT A MASTER SERVICER/ CLIENT INV# INV TRUSTEE DEAL NAME 106 Z42 EMC PMSR BSABS 2006-IM1 WELLS FARGO CTS BSABS 2006-IM1 106 Z41 EMC PMSR PRIME 2006-CL1 WELLS FARGO CTS PRIME 2006-CL1 106 V50 EMC SUB BSABS 2005-SD2 WELLS FARGO CTS BSABS 2005-SD2 106 V53 EMC SUB BSABS 2006-SD1 WELLS FARGO CTS BSABS 2006-SD1 106 V54 EMC SUB BSABS 2006-SD2 WELLS FARGO CTS BSABS 2006-SD2 106 V55 EMC SUB BSABS 2006-SD3 WELLS FARGO CTS BSABS 2006-SD3 (page) EXHIBIT A MASTER SERVICER/ CLIENT INV# INV TRUSTEE DEAL NAME 106 U02 GREENWICH PMSR SOUNDVIEW WELLS FARGO CTS SOUNDVIEW 2006-2 106 U05 GREENWICH PMSR SOUNDVIEW WELLS FARGO CTS SOUNDVIEW 2006-3 (page) EXHIBIT A MASTER SERVICER/ CLIENT INV# INV TRUSTEE DEAL NAME 106 719 LEHMAN PMSR SAIL 2006-3 WELLS FARGO CTS SAIL 2006-3 106 724 LEHMAN PMSR SASCO 06-BC2 WELLS FARGO CTS SASCO 2006-BC2 106 K67 LEHMAN SUB 2004-7 WELLS FARGO CTS 2004-7 (page) EXHIBIT A MASTER SERVICER/ CLIENT INV# INV TRUSTEE DEAL NAME 106 P41 MORGAN PMSR MSM 2006-5AR WELLS FARGO CTS MSM 2006-5AR 106 P43 MORGAN PMSR MSAC 2006-HE WELLS FARGO CTS MSAC 2006-HE2 106 P52 MORGAN PMSR MSIX 2006-1 WELLS FARGO CTS MSIX 2006-1 106 P53 MORGAN PMSR MSAC2006-WMC WELLS FARGO CTS MSAC 2006-WMC2 (page) EXHIBIT A MASTER SERVICER/ CLIENT INV# INV TRUSTEE DEAL NAME 106 V02 SOCIETE PMSR SUMS 06-FRE WELLS FARGO CTS SGMS 2006-FRE1 (page) EXHIBIT A MASTER SERVICER/ CLIENT INV# INV TRUSTEE DEAL NAME 106 916 UBS PMSR MALT 2006-2 WELLS FARGO CTS MALT 2006-2 106 917 UBS PMSR MABS2006-FRE1 WELLS FARGO CTS MABS 2006-FRE1 106 925 UBS PMSR MABS2006-FRE2 WELLS FARGO CTS MABS 2006-FRE2 106 926 UBS PMSR MALT 2006-3 WELLS FARGO CTS MALT 2006-3 106 927 UBS PMSR MABS 2006-WMC2 WELLS FARGO CTS MABS 2006-WMC2 106 928 UBS PMSR MASS 2006-HE2 WELLS FARGO CTS MABS 2006-HE2 106 929 UBS PMSR MABS 2006-AM2 WELLS FARGO CTS MABS 2006-AM2 EX-35 (d) (logo) WELLS FARGO Corporate Trust Services MAC N2702-011 9062 Old Annapolis Road Columbia, MD 21045 410 884-2000 410 715-2380 Fax Wells Fargo Bank, N.A. March 12, 2007 Ace Securities Corporation AMACAR GROUP 6525 Morrison Boulevard, Suite 318 Charlotte, NC 28211 RE: Annual Statement As To Compliance for ACE Securities Corp. Home Equity Loan Trust, Series 2006-HE1 Per Section 4.15 (a) of the Pooling and Servicing Agreement, dated as of 2/1/2006, the undersigned Officer of Wells Fargo Bank, N.A., (Master Servicer), hereby certifies the following for the 2006 calendar year or portion thereof: (A) A review of such party's activities during the preceding calendar year or portion thereof and of such party's performance under this Agreement, or such other applicable agreement in the case of an Additional Servicer or Servicing Function Participant, has been made under such officer's supervision. (B) To the best of such officer's knowledge, based on such review, such party has fulfilled all its obligations under this Agreement, or such other applicable agreement in the case of an Additional Servicer or Servicing Function Participant, in all material respects throughout such year or portion thereof, 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 thereof. (C) Notwithstanding anything herein to contrary (and noting that, to the extent of any inconsistency, any and all other statements, certifications or assertions herein are subject to the following): instances of noncompliance related to the subject transaction for the applicable reporting period are identified on Schedule A hereto. Certified By: /s/ Kristen Ann Cronin Kristen Ann Cronin, Vice President Certified By: /s/ Gordon Johnson Gordon Johnson, Assistant Secretary (page) Schedule A Payment/Distribution Calculation Errors During the reporting period, certain errors were made in connection with the calculation of payments/distributions on the securities. To the best of the signing officer's knowledge, each such error, which may or may not have been material, has been identified and remedied and any related corrective action has been disclosed in a report previously filed with the SEC in respect of the reporting period. EX-35 (e) (logo) WELLS FARGO Corporate Trust Services MAC N2702-011 9062 Old Annapolis Road Columbia, MD 21045 410 884-2000 410 715-2380 Fax Wells Fargo Bank, N.A. March 12, 2007 Ace Securities Corporation AMACAR GROUP 6525 Morrison Boulevard, Suite 318 Charlotte, NC 28211 RE: Annual Statement As To Compliance for ACE Securities Corp. Home Equity Loan Trust, Series 2006-HE1 Per Section 4.15 of the Pooling and Servicing Agreement, dated as of 2/1/2006, the undersigned Officer of Wells Fargo Bank, N.A., (Securities Administrator), hereby certifies the following for the 2006 calendar year or portion thereof: (A) A review of such party's activities during the preceding calendar year or portion thereof and of such party's performance under this Agreement, or such other applicable agreement in the case of an Additional Servicer or Servicing Function Participant, has been made under such officer's supervision. (B) To the best of such officer's knowledge, based on such review, such party has fulfilled all its obligations under this Agreement, or such other applicable agreement in the case of an Additional Servicer or Servicing Function Participant, in all material respects throughout such year or portion thereof, 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 thereof. (C) Notwithstanding anything herein to contrary (and noting that, to the extent of any inconsistency, any and all other statements, certifications or assertions herein are subject to the following): instances of noncompliance related to the subject transaction for the applicable reporting period are identified on Schedule A hereto. Certified By: /s/ Kristen Ann Cronin Kristen Ann Cronin, Vice President Certified By: /s/ Gordon Johnson Gordon Johnson, Assistant Secretary (page) Schedule A Payment/Distribution Calculation Errors During the reporting period, certain errors were made in connection with the calculation of payments/distributions on the securities. To the best of the signing officer's knowledge, each such error, which may or may not have been material, has been identified and remedied and any related corrective action has been disclosed in a report previously filed with the SEC in respect of the reporting period.