MORGAN STANLEY ABS CAPITAL I INC. TRUST 2006-WMC2 AMENDMENT NO. 2 TO POOLING AND SERVICING AGREEMENT Dated as of December 8, 2006 Morgan Stanley ABS Capital I Inc. Trust 2006-WMC2 Mortgage Pass-Through Certificates, Series 2006-WMC2

XXXXXX XXXXXXX ABS CAPITAL I INC. TRUST 2006-WMC2

EXHIBIT 4.2

_____________________

AMENDMENT NO. 2 TO POOLING AND SERVICING AGREEMENT

Dated as of December 8, 2006

_________________________

Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2006-WMC2

Mortgage Pass-Through Certificates, Series 2006-WMC2

AMENDMENT NO. 2

AMENDMENT NO. 2 (this “Amendment”) effective as of June 1, 2006, among Xxxxxx Xxxxxxx ABS Capital I Inc., as depositor (the “Depositor”), Xxxxx Fargo Bank, N.A., as servicer (the “Servicer”), as securities administrator (the “Securities Administrator”) and as custodian (the “Custodian”), WMC Mortgage Corp., as responsible party (the “Responsible Party”), and Deutsche Bank National Trust Company, as trustee (the “Trustee”).

PRELIMINARY STATEMENT

WHEREAS, the Depositor, the Servicer, the Securities Administrator, the Custodian, the Responsible Party and the Trustee, are parties to the Pooling and Servicing Agreement, dated as of June 1, 2006 (the “Agreement”);

WHEREAS, Section 11.01 of the Agreement provides that the Agreement may be amended by the Depositor, the Servicer, the Securities Administrator, the Custodian, the Responsible Party and the Trustee; and

NOW, THEREFORE, in consideration of the foregoing and of other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

1. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Agreement.

2. Amendments:

The following provisions shall be added to the end of Schedule V to the Agreement:

(4) With respect to each Group I Mortgage Loan which is a Second Lien Mortgage Loan (A) such lien is on a one-to four-family residence that is the principal residence of the related Mortgagor, (B) the original principal balance was within one-half of Xxxxxxx Mac’s and Xxxxxx Mae’s dollar amount limits for one-unit conforming one-to four-family mortgage loans for first lien mortgage loans, without regard to the number of units in the related Mortgaged Property and (C) the original principal balance of the related first lien mortgage loan plus the original principal balance of any subordinate lien mortgage loans relating to the same Mortgaged Property was within Xxxxxxx Mac’s and Xxxxxx Mae’s dollar amount limits for first lien mortgage loans for that property type.

3. Except as expressly modified or amended in this Amendment, all of the terms, covenants, provisions, agreements and conditions of the Agreement are hereby ratified and confirmed in every respect and shall remain unmodified and unchanged and shall continue in full force and effect.

4. The Depositor certifies that all conditions for the execution of this Amendment have been satisfied.

5. This Amendment shall become effective as of the date hereof when, and only when, the Agent shall have received executed counterparts of this Amendment from the parties hereto.

6. This Amendment may be executed in counterparts, each of which shall be an original but all of which, taken together, shall constitute one and the same instrument. This Amendment shall be construed in accordance with the laws of the State of New York (excluding provisions regarding conflicts of laws) and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws.

IN WITNESS WHEREOF, the parties have duly executed this Amendment No. 2 as of the date first above written.

							XXXXXX XXXXXXX ABS CAPITAL I INC., as Depositor
							By:	/s/ Xxxxxx Xxxxxxx
							Name:	Xxxxxx Xxxxxxx
							Title:	Managing Director

							WMC MORTGAGE CORP., as Responsible Party
							By:	/s/ Xxxxx Xxxxxxxx
							Name:	Xxxxx Xxxxxxxx
							Title:	Senior Vice President

							XXXXX FARGO BANK, N.A., as Securities Administrator
							By:	/s/ Xxxxxxxx Xxxxx
							Name:	Xxxxxxxx Xxxxx
							Title:	Vice President

							XXXXX FARGO BANK, N.A., as Servicer
							By:	/s/ Xxxxxx XxXxxxxx
							Name:	Xxxxxx XxXxxxxx
							Title:	Vice President

							XXXXX FARGO BANK, N.A., as Custodian
							By:	/s/ Xxxxxxxx Xxxxx
							Name:	Xxxxxxxx Xxxxx
							Title:	Vice President

							DEUTSCHE BANK NATIONAL TRUST COMPANY, as Trustee
							By:	/s/ Xxxxxxx Xxxxx
							Name:	Xxxxxxx Xxxxx
							Title:	Vice President
							By:	/s/ Xxxxxxxx Xxxxxxxxxxx
							Name:	Xxxxxxxx Xxxxxxxxxxx
							Title:	Associate