MORGAN STANLEY ABS CAPITAL I INC.







                  MORGAN STANLEY HOME EQUITY LOAN TRUST 2006-3







                       MORTGAGE PASS-THROUGH CERTIFICATES

                                  Series 2006-3







                             UNDERWRITING AGREEMENT



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                                                              New York, New York

                                                                    May 22, 2006



Morgan Stanley & Co. Incorporated

1585 Broadway

New York, New York 10036



Dear Sirs:



            Morgan Stanley ABS Capital I Inc., a Delaware corporation (the

"Company"), proposes to sell to you, Morgan Stanley & Co. Incorporated (the

"Underwriter"), Morgan Stanley Home Equity Loan Trust 2006-3 Mortgage

Pass-Through Certificates, Series 2006-3 in the original principal amount and

with the designation described on Schedule A attached hereto (the "Offered

Certificates"). The Offered Certificates will be issued pursuant to a pooling

and servicing agreement dated as of May 1, 2006 (the "Pooling and Servicing

Agreement") among Morgan Stanley ABS Capital I Inc., as depositor (the

"Depositor"), HomEq Servicing Corporation ("HomEq"), Wells Fargo Bank, National

Association ("Wells Fargo"), JPMorgan Chase Bank, National Association

("JPMorgan" and, together with HomEq and Wells Fargo, the "Servicers"), First

NLC Financial Services, LLC (the "Responsible Party") and Deutsche Bank National

Trust Company (the "Trustee"). In addition to the Offered Certificates, the

Depositor will authorize for issuance the Mortgage Pass-Through Certificates,

Series 2006-3, Class X, Class P and Class R pursuant to the Pooling and

Servicing Agreement (together with the Offered Certificates, the

"Certificates").



            The Company has filed with the Securities and Exchange Commission

(the "Commission") a registration statement, including information that is

contained in the Prospectus (as defined below) relating to the Offered

Certificates and is deemed to be part of and included in such registration

statement, and has filed with, or mailed for filing to, the Commission a

prospectus supplement specifically relating to the Offered Certificates pursuant

to Rule 424 under the Securities Act of 1933 (the "Securities Act"). The term

"Registration Statement" means such registration statement as such registration

statement, including the exhibits thereto and information that is contained in

the Prospectus and is deemed to be part of and included in such registration

statement, may have been amended or supplemented at the date of the Prospectus.

The prospectus first required to be filed to satisfy the condition set forth in

Rule 172(c) and pursuant to Rule 424(b) under the Securities Act, is hereinafter

called the "Base Prospectus"; such form of supplement to the Base Prospectus

relating to the Certificates, in the form first required to be filed to satisfy

the condition set forth in Rule 172(c) and pursuant to Rule 424(b) under the

Securities Act (including the Base Prospectus as so supplemented) is hereinafter

called the "Prospectus Supplement"; and the Base Prospectus and the Prospectus

Supplement, together, are hereinafter called the "Prospectus". Capitalized terms

not otherwise defined in this Agreement are used herein as defined in the

Pooling and Servicing Agreement.



            At or prior to the time when sales to investors of the Offered

Certificates were first made (the "Time of Sale"), the Company had prepared the

following information (collectively, the "Time of Sale Information"): the Morgan

Stanley Home Equity Loan Trust 2006-3 Free Writing Prospectus, dated April 27,

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