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IndyMac Home Equity Mortgage Loan Asset-Backed Trust, Series 2007-H1, et al. – ‘424B5’ on 3/22/07

On:  Thursday, 3/22/07, at 5:26pm ET   ·   Accession #:  930413-7-2673   ·   File #s:  333-134691, -08

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 3/22/07  IndyMac Home Equity Mtge… 2007-H1 424B5                  1:2.0M                                   Command Financial
          Indymac ABS Inc

Document/Exhibit                   Description                      Pages   Size 

 1: 424B5       Prospectus                                          HTML   1.71M 

PROSPECTUS SUPPLEMENT DATED MARCH 21, 2007
(To Prospectus dated December 11, 2006)

$650,071,000
(Approximate)

INDYMAC ABS, INC
DEPOSITOR

IndyMac Home Equity Mortgage Loan Asset-Backed Trust, Series 2007-H1
Issuing Entity
Home Equity Mortgage Loan Asset-Backed Notes, Series 2007-H1
Distributions payable on the 25th day of each month or, if the 25th day is not a business day, the next business day,
beginning in April 2007.
__________________

     The issuing entity will hold a pool of adjustable rate, first lien and second lien revolving home equity line of credit loans. The issuing entity will issue one class of notes that is offered hereby. In addition to the notes, the issuing entity will also issue three classes of certificates that are not offered hereby.

     The assets of the issuing entity will primarily consist of a pool of adjustable rate, first lien and second lien revolving home equity line of credit loans. Two REMIC elections will be made with respect to the assets of the issuing entity.

     The notes offered by this prospectus supplement have the benefit of a financial guaranty insurance policy from the insurer that will guarantee timely payment of interest and the ultimate payment of principal, as described in this prospectus supplement.

Consider carefully the risk factors beginning on page S-14 in this prospectus supplement and on page 6 in the accompanying prospectus. The notes represent obligations of the issuing entity only and do not represent an interest in or obligation of IndyMac ABS, Inc., IndyMac Bank, F.S.B., or any of their affiliates. This prospectus supplement may be used to offer and sell the notes only if accompanied by the accompanying prospectus.

This prospectus supplement and the accompanying prospectus relate only to the offering of the notes and not to the classes of certificates that will be issued by the issuing entity.      Credit enhancement for the notes will consist of:      • Excess cash flow and overcollateralization as described in this prospectus supplement under “Description of the Notes—Credit Enhancement;” and      • A financial guaranty insurance policy as described in this prospectus supplement under “The Insurer and the Policy.” Neither the sponsor nor the depositor is or is affiliated with a government agency, instrumentality or government sponsored enterprise. The notes are not bank accounts and are not insured by the FDIC or any other governmental entity.

     NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES OR DETERMINED THAT THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

     The Attorney General of the State of New York has not passed on or endorsed the merits of this offering. Any representation to the contrary is unlawful.

     On or about March 23, 2007, delivery of the notes offered by this prospectus supplement will be made through the book-entry facilities of The Depository Trust Company, Clearstream Banking Luxembourg and the Euroclear System. See “Description of the Notes—General” in this prospectus supplement and “Description of the Securities—Book-Entry Securities” in the accompanying prospectus.

TABLE OF CONTENTS

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     Important Notice About Information Presented in this prospectus supplement and the accompanying prospectus

      We provide information to you about the notes in two separate documents that progressively provide more detail:

• the accompanying prospectus, which provides general information, some of which may not apply to your series of notes; and
• this prospectus supplement, which describes the specific terms of your series of notes.

     The information in this prospectus supplement, if conveyed prior to the time of your contractual commitment to purchase any of the notes, supersedes any information contained in any prior similar materials relating to the notes, is being delivered to you solely to provide you with information about the offering of the notes referred to in this prospectus supplement and to solicit an offer to purchase the notes, when, as and if issued. Any such offer to purchase made by you will not be accepted and will not constitute a contractual commitment by you to purchase any of the notes, until we have accepted your offer to purchase the notes.

     The notes are being sold when, as and if issued. The depositor is not obligated to issue the notes or any similar security and the underwriters’ obligation to deliver the notes is subject to the terms and conditions of its underwriting agreement with the depositor and the availability of the notes when, as and if issued by the depositor. You are advised that the terms of the notes, and the characteristics of the mortgage pool backing them, may change (due, among other things, to the possibility that mortgage loans that comprise the mortgage pool may become delinquent or defaulted or may be removed or replaced and that similar or different mortgage loans may be added to the mortgage pool), at any time prior to issuance or availability of a final prospectus. You are advised that the notes may not be issued that have the characteristics described in this prospectus supplement and the accompanying prospectus. The underwriters’ obligation to sell any of the notes to you is conditioned on the mortgage loans and the notes having the characteristics described in this prospectus supplement. If for any reason the depositor does not deliver the notes, the underwriters will notify you, and none of the depositor, the master servicer or the underwriter will have any obligation to you to deliver all or any portion of the notes which you have committed to purchase, and none of the depositor, the master servicer or the underwriter will be liable for any costs or damages whatsoever arising from or related to such non-delivery.

     Some of the statements contained in or incorporated by reference in this prospectus supplement and the accompanying prospectus consist of forward-looking statements relating to future economic performance or projections and other financial items. These statements can be identified by the use of forward-looking words such as “may,” “will,” “should,” “expects,” “believes,” “anticipates,” “estimates,” or other comparable words. Forward-looking statements are subject to a variety of risks and uncertainties that could cause actual results to differ from the projected results. Those risks and uncertainties include, among others, general economic and business conditions, regulatory initiatives and compliance with governmental regulations, customer preferences and various other matters, many of which are beyond our control. Because we cannot predict the future, what actually happens may be very different from what we predict in our forward-looking statements.

     The discussion contained in this prospectus supplement as to tax considerations is not intended or written to be used, and cannot be used, for the purpose of avoiding United States Federal income tax penalties. Such discussion is written to support the promotion or marketing of the transactions or matters addressed in this prospectus supplement. Each taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor.

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S-2

RISK FACTORS

The following information, which you should carefully consider, identifies certain significant sources of risk associated with an investment in the notes. You should also carefully consider the information under “Risk Factors” beginning on page 6 in the accompanying prospectus.

You may have difficulty selling your notes

     The underwriters intend to make a secondary market in the notes purchased by them, but the underwriters have no obligation to do so. We cannot assure you that a secondary market will develop or, if it develops, that it will continue. Consequently, you may not be able to sell your notes readily or at prices that will enable you to realize your desired yield. The market values of the notes are likely to fluctuate; these fluctuations may be significant and could result in significant losses to you.

     The secondary markets for mortgage backed and asset backed securities have experienced periods of illiquidity and can be expected to do so in the future. Illiquidity can have a severely adverse effect on the prices of securities, especially those that are sensitive to prepayment, credit or interest rate risk or that have been structured to meet the investment requirements of limited categories of investors.

Cash flow limited in early years of HELOCs

     Each HELOC in the statistical calculation HELOC pool has a draw period that lasts for the first 5 to 15 years and substantially all have a repayment term for the last 10, 15 or 20 years of the term (as more fully described in this prospectus supplement). No principal or a minimal amount of principal is due during the draw period although a borrower may voluntarily make a principal payment. Monthly principal payments during the repayment period are required in amounts that will evenly amortize the amount outstanding at the commencement of the repayment period over the remaining term of the HELOC. Collections on the HELOCs may also vary due to seasonal purchasing and payment habits of borrowers. As a result there may be limited collections available to make payments to you and you may receive payments of principal more slowly than anticipated.

Delays in payment on your notes may result because the servicer is not required to advance

     The servicer is not obligated to advance scheduled monthly payments of interest or principal on HELOCs that are delinquent or in default. As a result, noteholders will not receive a regular stream of payments from HELOCs that become delinquent or go into default. The rate of delinquency and default of second lien HELOCs may be greater than that of mortgage loans secured by first liens on comparable properties.

The servicer has limited ability to change the terms of the HELOCs.

     The servicer may agree to changes in the terms of a HELOC under the circumstances and subject to the limitations and conditions set forth under “Servicing of the HELOCS—Modification of the HELOCs” below. Any increase in the credit limit related to a HELOC could increase the combined loan-to-value ratio or loan-to-value ratio, as applicable, of that HELOC and, accordingly, may increase the likelihood and could increase the severity of loss in the event of a default under that HELOC. In addition, any reduction in the loan rate of a HELOC could reduce the excess cash flow available to absorb charge-offs and to build or maintain the specified overcollateralization amount.

Modification of HELOCs by the servicer may adversely affect your yield

     The servicer will have the right to modify any HELOC in lieu of the borrower refinancing if it purchases the HELOC from the issuing entity. Modifications may include, but are not limited to, interest rate reductions. The servicer may identify borrowers who are likely to refinance and inform them of the alternative of a modification. Generally, borrowers that are informed of this option choose it. The proceeds of any such repurchases will be treated as prepayments in full of the applicable HELOCs and will have the same effect on the yields on the notes as prepayments in full.

      See “Servicing of the HELOCs—Certain Modifications and Refinancings” in this prospectus supplement.

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Interest payable on the notes and interest payable on the HELOCs differ

     Interest payable on the HELOCs may be insufficient to pay interest on the notes, which accrues on the basis of LIBOR plus the applicable margin set forth in the table on page S-5, subject to a maximum rate based in part on the interest rates on the HELOCs. Interest payable on the HELOCs will accrue at a variable rate based on the prime rate plus a designated margin, subject to maximum limitations on adjustments. As a result, the notes may accrue less interest than they would accrue if the interest rate on the notes were based solely on LIBOR plus the applicable margin set forth in the table on page S-5.

     If the sum of LIBOR plus the applicable margin set forth in the table on page S-5 exceeds the maximum rate of interest allowed on the notes, such shortfalls will be paid to the related noteholders only if amounts are available for such payment on a subsequent payment date and at a lower priority than interest is normally paid to those noteholders. Such shortfalls will not be guaranteed by the insurer.

     LIBOR and the prime rate may not respond to the same economic factors and there is not necessarily a correlation between them. Any reduction in the spread between LIBOR and the prime rate will also reduce the amount of interest receipts on the HELOCs that would be available to absorb charge-offs. In that event, if the overcollateralization were depleted and the insurer failed to perform under the policy, you would experience a loss.

Ratings on notes based primarily on claims paying ability of the insurer

     The rating on the notes depends primarily on the claims paying ability of the insurer. Therefore, a reduction in the financial strength rating of the insurer may result in a corresponding reduction in the credit ratings assigned to the notes. A reduction in the credit rating assigned to the notes would reduce the market value of the notes and may affect your ability to sell them. The insurer does not guarantee the market value of the notes, or the credit ratings assigned to them.

See “Ratings” in this prospectus supplement.

Limited information regarding prepayment history

     All of the HELOCs may be prepaid in whole or in part at any time. Neither the seller nor the servicer is aware of any publicly available studies or statistics on the rate of prepayment of HELOCs. HELOCs usually are not viewed by borrowers as permanent financing and may experience a higher rate of prepayment than traditional mortgage loans. The trust’s prepayment experience may be affected by a wide variety of factors, including:

• general economic conditions;
• interest rates;
• the availability of alternative financing;
• homeowner mobility; and
• changes affecting the ability to deduct interest payments on HELOCs for federal income tax purposes.

     Prepayments on the HELOCs will result in earlier payments of principal on your notes. In addition, substantially all of the statistical calculation HELOCs contain due-on-sale provisions, which may affect the rate of prepayment.

      See “Yield, Maturity and Prepayment Considerations” in this prospectus supplement.

S-15

Yield to maturity of notes may be affected by repurchases

     The yield to maturity of the notes may be affected by certain repurchase requirements. The seller will be required to purchase HELOCs from the trust in the event certain breaches of representations and warranties made by it have not been cured. These purchases will have the same effect on the noteholders as a prepayment of the HELOCs.

Relocation of the servicer’s default management services may result in increased delinquencies and defaults which may adversely affect the yield on the notes

     The servicer intends to relocate its default management, collections, and loss mitigation functions from Pasadena, California to Texas in 2007. Fewer than 70 of the servicer’s employees will be affected by this relocation. Although certain of these employees will be offered the opportunity to relocate, the servicer expects that a substantial number of these employees may elect not to do so.

     If a substantial number of employees in default management services resign prior to the relocation or elect not to relocate, the servicer’s collection and default management processes may be disrupted which may result in an increase in delinquencies and defaults. Although any increase in delinquencies and defaults is expected to be temporary, there can be no assurance as to the duration or severity of any disruption in the collection and default management processes or as to the resulting effects on the yield of the notes. In an attempt to mitigate any disruptions from these processes, the servicer will continue to provide default management services from its current offices in Pasadena, California until the relocation of those services to Texas has been completed and the default management, collections, and loss mitigation functions in the new site are fully operational.

Inability to Replace Servicer Could Affect Collections and Recoveries on the HELOCs

     The structure of the servicing fee might affect the ability to find a replacement servicer. Although the indenture trustee is required to replace the servicer if the servicer is terminated or resigns, if the indenture trustee is unwilling or unable to appoint a replacement servicer, there would likely be significant delays in collecting payments from borrowers. Because the servicing fee is structured as a percentage of the principal balance of each HELOC, it may be difficult to replace the servicer at a time when the balance of the HELOCs has been significantly reduced because the fee may be insufficient to cover the costs associated with servicing the HELOCs and related REO properties remaining in the pool. The performance of the HELOCs may be negatively impacted, beyond the expected transition period during a servicing transfer, if a replacement servicer is not retained within a reasonable amount time.

Consequences of owning book-entry notes

     Issuance of the notes in book-entry form may reduce the liquidity of the notes in the secondary trading market since investors may be unwilling to purchase securities for which they cannot obtain physical notes.

     Since transactions in the notes can be effected only through DTC, Clearstream, Euroclear, participating organizations, indirect participants and banks, your ability to pledge your notes to persons or entities that do not participate in the DTC, Clearstream or Euroclear systems or otherwise to take actions in respect of the notes, may be limited due to lack of a physical security representing the notes.

     As a beneficial owner, you may experience some delay in your receipt of payments of interest on and principal of your notes since payments will be forwarded by the indenture trustee to DTC and DTC will credit payments to the accounts of its participants which will credit them to the accounts of the beneficial owners either directly or indirectly through indirect participants.

     See “Description of the Notes—General” in this prospectus supplement and “Description of the Securities—Book-Entry Securities” in the accompanying prospectus.

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An optional redemption may adversely affect the yield on the notes

     On any payment date on or after which the outstanding principal amount of the notes, prior to giving effect to payments of principal on such payment date, is reduced to an amount less than or equal to 10% of the outstanding principal amount of the notes on the closing date, the servicer or its assignee may purchase all of the HELOCs and thereby cause a termination of the underlying trust. See “Description of the Notes—Optional Redemption” in this prospectus supplement. If this event happens, it will have the same effect as if all of the remaining borrowers made prepayments in full. Notes purchased at a premium could be adversely affected by such an optional redemption.

      See “Yield, Maturity and Prepayment Considerations” in this prospectus supplement.

The obligations of the seller, the depositor and the servicer are limited

     None of the seller, the depositor, the indenture trustee or the servicer is obligated to make any payments of principal or interest on the notes. The only obligation of the seller to make any payment in respect of the HELOCs is the seller’s obligation to repurchase from the trust those HELOCs with respect to which there is a defect in the documentation or for which there is a material breach of its representations and warranties. There is no guarantee, however, that the seller will have the financial ability to repurchase any of those HELOCs.

Increased risk of loss as a result of the amortization lockout period of the HELOCs

     The HELOCs in the statistical calculation HELOC pool require no principal payments or minimal principal payments during the first 5 to 15 years following origination, and substantially all of the HELOCs in the statistical calculation HELOC pool require repayment of the principal balance outstanding at the commencement of the repayment period over the remaining term in equal monthly installments. HELOCs with terms like these pose a special payment risk because the borrower must start making substantially higher monthly payments at the start of the repayment period. If the borrower is unable to make such increased payments, the borrower may default. You may suffer a loss if the collateral for such HELOC, and the other forms of credit enhancement, are insufficient or unavailable to cover the loss and the insurer fails to perform under the insurance policy.

The incurrence of additional debt by borrowers could increase your risk

     With respect to HELOCs that were used for debt consolidation, there can be no assurance that the borrower will not incur further debt. This reloading of debt could impair the ability of borrowers to service their debts, which in turn could result in higher rates of delinquency and loss on the HELOCs.

      See “Description of the HELOCs” in this prospectus supplement.

Negative amortization on first lien mortgage loans could increase your risk

     Approximately 24.13% of the HELOCs in the statistical calculation HELOC pool, by statistical cut-off date principal balance, are second lien HELOCs junior to a first lien mortgage on the related mortgaged properties that permit negative amortization. To the extent the payment option under any of these first lien mortgage loans selected by the related borrower from time to time increases the principal balance of that loan, the combined loan-to-value of the related HELOC will be increased and the portion of the value of the related mortgaged property available to repay the related HELOC will be reduced in the event of a default on the related HELOC.

      See “Description of the HELOCs” in this prospectus supplement.

Insolvency may affect the timing and amount of distributions on the notes

     The transfer of the HELOCs by the seller to the depositor will be characterized in the mortgage loan purchase agreement as a sale transaction. Nevertheless, in the event of insolvency of the seller, the Federal Deposit Insurance Corporation (“FDIC”), as conservator or receiver, could attempt to recharacterize the sale of the HELOCs to the depositor as a borrowing secured by a pledge of the HELOCs. If such an attempt to recharacterize the transfer

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of the HELOCs were to be successful, the FDIC could elect to accelerate payment of the notes and liquidate the HELOCs, with the holders of the notes entitled to no more than the outstanding principal balance, if any, of the notes, together with interest thereon at the note rate. In the event of an acceleration of the notes, the holders of the notes would lose the right to future payments of interest, might suffer reinvestment losses in a lower interest rate environment and may fail to recover their initial investment. Further, with respect to an acceleration by the FDIC, interest may be payable only through the date of appointment of the FDIC as conservator or receiver. The FDIC has a reasonable period of time (which it has stated will generally not exceed 180 days after the date of its appointment) to elect to accelerate payment. Whether or not an acceleration takes place, delays in payments on the notes and possible reductions in the amount of such payments could occur. For a further discussion see “Certain Regulatory Matters Related to Banks—Certain Matters Relating to Conservatorship and Receivership” in this prospectus supplement.

Developments in certain states could have a disproportionate effect on the pool of HELOCs due to geographic concentration of mortgaged properties

     The chart entitled “Geographic Distribution” presented in Annex I to this prospectus supplement lists the states with the highest concentrations of statistical calculation HELOCs. Because of the relative geographic concentration of the mortgaged properties within certain states, losses on the HELOCs may be higher than would be the case if the mortgaged properties were more geographically diversified. For example, some of the mortgaged properties may be more susceptible to certain types of special hazards, such as earthquakes, hurricanes, floods, wildfires and other natural disasters and major civil disturbances, than residential properties located in other parts of the country.

     Economic conditions in states with high concentrations of HELOCs may affect the ability of borrowers in those states to repay their loans on time. Changes in economic conditions and declines in the residential real estate market in states with high concentrations of HELOCs may reduce the values of properties located in those states, which would result in an increase in the loan-to-value ratios. Conversely, other changes in economic conditions and increases in the market values of properties located in states with high concentrations of HELOCs would reduce the loan-to-value ratios and could therefore make alternative sources of financing available to the borrowers at lower interest rates, which could result in an increased rate of prepayment of the HELOCs.

     Approximately 55.07% of the aggregate stated principal balance of the HELOCs in the statistical calculation HELOC pool are secured by mortgaged properties located in California. Properties in California may be more susceptible than homes located in other parts of the country to some types of uninsured hazards, such as earthquakes, mudslides, hurricanes, floods, wildfires and eruptions, and civil disturbances such as riots. Since 2001, California has experienced intermittent energy shortages that have resulted in unpredictable rolling blackouts and higher energy costs. This potential crisis could someday spread to other states and affect the entire nation. In addition, recently the cost of crude oil reached record highs. These higher energy and fuel costs could reduce the amount of money that the affected obligors have available to make monthly payments. Higher energy costs and blackouts could also cause business disruptions, which could cause unemployment and an economic downturn. Such obligors could potentially become delinquent in making monthly payments or default if they were unable to make payments due to increased energy or fuel bills or unemployment. The trust’s ability to make payments on the notes could be adversely affected if the related obligors were unable to make timely payments. The depositor cannot predict whether, or to what extent or for how long, such events may occur.

     In addition, California has imposed legal limits on the remedies of a secured lender in the event that the proceeds of any sale under a deed of trust or other foreclosure proceedings are insufficient to pay amounts owed to that secured lender. In California, if a lender simultaneously originates a loan secured by a senior lien on a particular property and a loan secured by a junior lien on the same property, that lender as the holder of the junior lien may be precluded from obtaining a deficiency judgment with respect to the excess of the aggregate amount owed under both the senior and junior loans, over the proceeds of sale under a deed of trust or other foreclosure proceedings. This anti-deficiency law, therefore, is likely to result in increases of losses in the event the borrowers default on the related HELOCs because mortgages and deeds of trust securing such HELOCs are primarily junior liens.

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     There will be variations in the HELOCs from the characteristics described in this prospectus supplement

     The pool of HELOCs used to derive the statistical information herein includes HELOCs the characteristics of which will vary from the specific characteristics reflected in the final pool of HELOCs, although the extent of such variance is not expected to be material. A detailed description of the HELOCs actually delivered on the closing date will be filed with the Securities and Exchange Commission by the depositor on Form 8-K within four business days of the closing date.

Notes may not be appropriate for certain investors

     The notes may not be an appropriate investment for investors who do not have sufficient resources or expertise to evaluate the particular characteristics of the notes. This may be the case because, among other things:

• the yield to maturity of the notes will be sensitive to the uncertain rate and timing of principal prepayments on the HELOCs;
• the rate of principal distributions on and the weighted average lives of the notes will be sensitive to the uncertain rate and timing of principal prepayments on the HELOCs and the priority of principal distributions on the notes. Accordingly, the notes may be an inappropriate investment if you require a distribution of a particular amount of principal on a specific date or an otherwise predictable stream of distributions;
• you may not be able to reinvest amounts distributed in respect of principal on a note (which, in general, are expected to be greater during periods of relatively low interest rates) at a rate at least as high as the note rate applicable to your note; or
• a secondary market for the notes may not develop or provide noteholders with liquidity of investment.

     You should also carefully consider the further risks discussed above and under the heading “Yield, Prepayment and Maturity Considerations” in this prospectus supplement and under the heading “Risk Factors” in the accompanying prospectus.

Notes are obligations only of the issuing entity

     The notes will not represent an ownership interest in or obligation of any entity except for the obligations of the seller pursuant to certain limited representations and warranties made with respect to the HELOCs and of the servicer with respect to its servicing obligations under the sale and servicing agreement (including the limited obligation to make certain monthly advances). Neither the notes nor the underlying HELOCs will be guaranteed or insured by any governmental agency or instrumentality. The notes are not bank accounts and are not insured by the FDIC. Proceeds of the assets included in the trust fund (including the HELOCs and any payments received under the financial guaranty insurance policy) will be the sole source of payments on the notes. You will not be able to receive money from any entity in the event that such proceeds are not enough to make all payments provided for under the notes.

     For a discussion of additional risks pertaining to the notes, see “Risk Factors” in the accompanying prospectus.

Impact of terrorist attacks

     The economic impact of the United States’ military operations in Iraq, Afghanistan and other parts of the world, as well as the possibility of terrorist attacks, domestically or abroad, is uncertain, but could have a material effect on general economic conditions, consumer confidence, and market liquidity. No assurance can be given as to the effect of these events on consumer confidence and the performance of the HELOCs. Any adverse impact resulting from these events would be borne by the holders of the notes. United States military operations may also

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increase the likelihood of shortfalls under the Servicemembers Civil Relief Act and similar state and local laws, including in the State of California.

     For a further discussion see “Certain Legal Aspects of the Mortgage Loans—Servicemembers Civil Relief Act” and “Risk Factors—Impact of World Events” in the accompanying prospectus.

Credit scores may not accurately predict the performance of the HELOCs

     Credit scores are obtained by many lenders, including IndyMac Bank, in connection with HELOC applications to help them assess a borrower’s creditworthiness. Credit scores are generated by models developed by a third party which analyzes data on consumers in order to establish patterns which are believed to be indicative of the borrower’s probability of default over a two-year period. The credit score is based on a borrower’s historical credit data, including, among other things, payment history, delinquencies on indebtedness, levels of outstanding indebtedness, length of credit history, types of credit and bankruptcy experience. Credit scores range from approximately 350 to approximately 840, with higher scores indicating an individual with a more favorable credit history compared to an individual with a lower score. However, a credit score purports only to be a measurement of the relative degree of risk a borrower represents to a lender (i.e., a borrower with a higher score is statistically expected to be less likely to default in payment than a borrower with a lower score). Lenders have varying ways of analyzing credit scores and, as a result, the analysis of credit scores across the industry is not consistent. In addition, it should be noted that credit scores were developed to indicate a level of default probability over a two year period, which does not correspond to the life of a HELOC. Furthermore, credit scores were not developed specifically for use in connection with HELOCs, but for consumer loans in general, and assess only the borrower’s past credit history. Therefore, a credit score does not take into consideration the effect of HELOC characteristics (which may differ from consumer loan characteristics) on the probability of repayment by the borrower. There can be no assurance that the credit scores of the mortgagors will be an accurate predictor of the likelihood of repayment of the related HELOCs.

Violation of various federal and state laws may result in losses on the HELOCs

     Applicable state laws generally regulate interest rates and other charges, require certain disclosure and require licensing of the seller to the extent any of these laws are not preempted by federal law. In addition, other state laws, public policy and general principles of equity relating to the protection of consumers, unfair and deceptive practices and debt collection practices may apply to the origination, servicing and collection of the HELOCs. The HELOCs are also subject to federal laws, including:

• the Federal Truth-in-Lending Act and Regulation Z promulgated thereunder, which require certain disclosures to the borrowers regarding the terms of the HELOCs;
• the Equal Credit Opportunity Act and Regulation B promulgated thereunder, which prohibit discrimination on the basis of age, race, color, sex, religion, marital status, national origin, receipt of public assistance or the exercise of any right under the Consumer Credit Protection Act, in the extension of credit;
• the Fair Credit Reporting Act, which regulates the use and reporting of information related to the borrower’s credit experience;
• the Depository Institutions Deregulation and Monetary Control Act of 1980, which preempts certain state usury laws; and
• the Alternative Mortgage Transaction Parity Act of 1982, which preempts certain state lending laws which regulate alternative mortgage transactions.

     Violations of certain provisions of these federal and state laws may limit the ability of the servicer to collect all or part of the principal of or interest on the HELOCs and in addition could subject the trust to damages and administrative enforcement. In particular, the seller’s failure to comply with certain requirements of the Federal

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Truth-in-Lending Act, as implemented by Regulation Z, could subject the trust to monetary penalties, and result in the borrowers’ rescinding the HELOCs against the trust. In addition to federal law, some states have enacted, or may enact, laws or regulations that prohibit inclusion of some provisions in HELOCs that have interest rates or origination costs in excess of prescribed levels, and require that borrowers be given certain disclosures prior to the consummation of the HELOCs and restrict the servicer’s ability to foreclose in response to the mortgagor’s default. The seller’s failure to comply with these laws could subject the trust to significant monetary penalties, could result in the borrowers rescinding any affected HELOCs whether held by the trust or a subsequent holder of such HELOCs and/or limit the servicer’s ability to foreclose upon the related mortgaged property in the event of a mortgagor’s default. See “Certain Legal Aspects of the Mortgage Loans—Anti-Deficiency Legislation and Other Limitations on Lenders” in the accompanying prospectus.

     The seller will represent that as of the closing date, each HELOC is in compliance with applicable federal and state laws and regulations. The seller will also represent that none of the HELOCs are subject to the Home Ownership and Equity Protection Act and its implementing regulations nor have any of the mortgagors been required to purchase single-premium credit life insurance in connection with the origination of the related HELOC. In the event of a breach of such representation, the seller will be obligated to cure such breach or repurchase or replace the affected HELOC in the manner described in the accompanying prospectus. If the seller is unable or otherwise fails to satisfy such obligations, the yield on the notes may be materially and adversely affected.

     Under the anti-predatory lending laws of some states or local ordinances, the mortgagor is required to meet a net tangible benefits test in connection with the origination of the related HELOC and to comply with other disclosure requirements and restrictions. This test may be highly subjective and open to interpretation. As a result, a court may determine that a HELOC does not meet the test or any of these other requirements even if an originator reasonably believed that the test was satisfied. Any determination by a court that a HELOC does not meet the test will result in a violation of the state anti-predatory lending law and impose liability on the originator or assignees of the HELOCs including the issuing entity, in which case the seller will be required to purchase such HELOC from the trust.

Violation of environmental laws or the existence of hazards may result in losses to the trust

     Federal, state and local laws and regulations impose a wide range of requirements on activities that may affect the environment, health and safety. In certain circumstances, these laws and regulations impose obligations on owners or operators of residential properties such as those that secure the HELOCs. Failure to comply with these laws and regulations can result in fines and penalties that could be assessed against the trust as owner of the related property.

     In some states, a lien on the property due to contamination has priority over the lien of an existing mortgage. Further, a mortgage lender may be held liable as an “owner” or “operator” for costs associated with the release of petroleum from an underground storage tank under certain circumstances. If the trust is considered the owner or operator of a property, it may suffer losses as a result of any liability imposed for environmental hazards on the property. For further discussion see “Certain Legal Aspects of the Mortgage Loans—Environmental Risks” in the accompanying prospectus.

Recent developments in the residential mortgage market may adversely affect the performance and market value of the notes

     Recently, the residential mortgage market in the United States has experienced a variety of difficulties and economic conditions that may adversely affect the performance of the mortgage loans. Delinquencies and losses with respect to residential mortgage loans generally have increased in recent months, and may continue to increase, particularly in the sub-prime sector. Housing prices and appraisal values in many states have declined or stopped appreciating, after extended periods of significant appreciation. Decreasing or static housing prices will increase delinquencies and losses on the mortgage loans relative to delinquencies and losses when housing prices are increasing.

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     In periods when the applicable index is increasing, the monthly payments for borrowers with adjustable rate mortgage loans will increase on each payment date. Delinquency rates may increase when monthly payments on the mortgage loans increase.

     Borrowers seeking to avoid these increased monthly payments by refinancing their mortgage loans may no longer be able to find available replacement loans at comparably low interest rates. A decline in housing prices may also leave borrowers with insufficient equity in their homes to permit them to refinance. For mortgage loans with prepayment penalties, the amount of the prepayment penalty will increase the cost of refinancing. Borrowers who intend to sell their homes on or before the expiration of the fixed rate periods on their mortgage loans may find that they cannot sell their properties for an amount equal to or greater than the unpaid principal balance of their loans. These events, alone or in combination, may contribute to higher delinquency rates.

THE HELOC POOL

General

     The depositor will purchase home equity lines of credit included in the pool transferred on the Closing Date (the “HELOCs”) from IndyMac Bank, F.S.B. (“IndyMac Bank”) pursuant to a mortgage loan purchase agreement (“mortgage loan purchase agreement”), dated as of the Cut-off Date, between IndyMac Bank and the depositor. The trust will purchase the same HELOCs from the depositor pursuant to a sale and servicing agreement (“sale and servicing agreement”), dated as of the Cut-off Date, among IndyMac Bank, as seller and servicer, the depositor, the trust and the indenture trustee, and, pursuant to the indenture, will pledge the same HELOCs to the indenture trustee for the benefit of holders of the notes and the insurer. The HELOCs are expected to have an aggregate Stated Principal Balance as of the Cut-off Date of approximately $650,071,585.70. The HELOCs will have been acquired or originated by the seller in the normal course of its business.

     Under the sale and servicing agreement, the seller will make certain representations, warranties and covenants to the depositor and the trust relating to, among other things, certain characteristics of the HELOCs and, subject to the limitations described below under “—Assignment of HELOCs,” will be obligated to repurchase or substitute a similar HELOC for any HELOC as to which there exists deficient documentation or an uncured breach of any representation, warranty or covenant if the breach of representation, warranty or covenant materially and adversely affects the interests of the noteholders or the insurer in that HELOC. Under the indenture, the trust will assign all its right, title and interest in and to the representations, warranties and covenants (including the seller’s repurchase obligation) to the indenture trustee for the benefit of the noteholders or the insurer. The depositor will make no representations or warranties with respect to the HELOCs and will have no obligation to repurchase or substitute HELOCs with deficient documentation or which are otherwise defective. IndyMac Bank will sell the HELOCs without recourse and will have no obligation with respect to the notes in its capacity as seller other than the repurchase or substitution obligations described above and in “—Representations and Warranties” below. The obligations of IndyMac Bank, as servicer, with respect to the notes will be limited to the servicer’s contractual servicing obligations under the sale and servicing agreement.

HELOC Statistics

     Certain information with respect to the HELOCs in the statistical calculation HELOC pool is set forth herein (such HELOCs, the “Statistical Calculation HELOCs”). Between the Statistical Cut-off Date and the Cutoff Date, the stated principal balance of the Statistical Calculation HELOCs described in this prospectus supplement may be reduced through principal payments received on the Statistical Calculation HELOCs and may be increased by additional draws made on the Statistical Calculation HELOCs. In addition, Statistical Calculation HELOCs may be removed from the HELOC pool as a result of incomplete documentation or because they are determined not to meet the eligibility requirements for inclusion in the HELOC pool and any Statistical Calculation HELOCs that prepay in full prior to the closing date may be removed. In addition, Statistical Calculation HELOCs may be removed or added to the HELOC pool in order to cause the aggregate stated principal balance of the HELOC pool as of the Cut-off Date to equal the sum of the initial Note Principal Amount of the Notes and any initial overcollateralization, which is expected to be approximately $650,071,585.70.

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     However, the removal of such HELOCs and the addition of HELOCs to the HELOC pool on the closing date will not materially alter the characteristics of the HELOCs described in this prospectus supplement, although the range of mortgage rates and maturities and certain other characteristics of the HELOCs may vary. The depositor believes that the information in this prospectus supplement with respect to the statistical calculation HELOC pool is representative of the characteristics of the HELOC pool as it will be constituted at the closing date, although certain characteristics of the HELOCs in the HELOC pool will vary. Any statistic presented on a weighted average basis or any statistic based on the aggregate stated principal balance or aggregate credit limit of the HELOCs is subject to a variance of plus or minus 5%.

     Unless otherwise indicated, information presented below expressed as a percentage (other than rates of interest) are approximate percentages based on the outstanding stated principal balances of the Statistical Calculation HELOCs as of the Statistical Cut-off Date, which are referred to as the “Statistical Cut-Off Date Principal Balances”.

     For a further description of the pool of HELOCs being delivered, see “The Issuing Entity—The Mortgage Loans—General—Additional Information” in the accompanying prospectus.

     Approximately 80.38% of the statistical calculation HELOCs, by Statistical Cut-off Date Principal Balance, were originated by the seller and the remainder of the HELOCs were originated by other unaffiliated originators and purchased by the seller. All of the HELOCs in the pool will have been originated under mortgage loan agreements and disclosure statements (the “Credit Line Agreements”) and are secured by mortgages or deeds of trust, which are primarily first and second mortgages or second deeds of trust, on mortgaged properties. The mortgaged properties securing the HELOCs will consist primarily of residential properties that are one- to four-family properties, planned unit developments and condominiums. The HELOCs will have been underwritten in accordance with the underwriting guidelines of the applicable mortgage loan originator in effect at the time of origination. Current applicable underwriting standards of the seller are described under “Underwriting and Credit Criteria” in this prospectus supplement.

     In the information that follows, weighted average percentages are based upon the principal balances of the statistical calculation HELOC pool as of the Statistical Cut-off Date.

     The statistical calculation HELOC pool as of the Statistical Cut-off Date included a total of 8,659 HELOCs with an aggregate pool balance of approximately $650,071,585.70. As of the Statistical Cut-off Date, the average stated principal balance was approximately $75,074.67, the minimum principal balance was approximately $2,040.47, the maximum principal balance was approximately $845,957.45, the minimum loan rate and the maximum loan rate were approximately 4.000% and 17.000% per annum, respectively, and the weighted average loan rate was approximately 8.702% per annum. As of the Statistical Cut-off Date, the credit limit utilization rate was approximately 83.44%, the minimum credit limit utilization rate was approximately 10.08% and the maximum credit limit utilization rate was approximately 105.42% . The credit limit utilization rate is determined by dividing the principal balance of a HELOC by the credit limit of the related Credit Line Agreement. The weighted average original combined loan-to-value ratio of the statistical calculation HELOCs was approximately 83.73% (weighted by credit limit).

     As of the Statistical Cut-off Date, 0.58% of the statistical calculation HELOC pool had a combined loan to value ratio greater than 100%.

     The “combined loan-to-value ratio” or “CLTV” of a HELOC at any given time is a fraction, expressed as a percentage, (x) the numerator of which is the sum of (i) the credit limit of that HELOC at the date of determination, and (ii) the original unpaid principal balance of any mortgage loan on the related mortgaged property that was senior to that HELOC as of the date of origination of that HELOC and (y) the denominator of which is (i) in the case of a purchase, the lesser of the selling price of the mortgaged property or its appraised value at the time of sale, or (ii) in the case of a refinance, the appraised value of the mortgaged property at the time of the refinance.

     In addition, as of the Statistical Cut-off Date, 24.13% of the statistical calculation HELOCs were second lien HELOCs that were junior to a first lien mortgage loan on the related mortgaged property that permits negative amortization. These first lien mortgage loans permit the maximum principal balance of the mortgage loan to

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increase to a specified percentage in excess of the original principal balance of that mortgage loan. See the tables “Negatively Amortizing First Liens” and “Maximum Combined Loan-to-Value Ratios” in Annex I to this prospectus supplement.

     No assurance can be given that the value of any mortgaged property has remained or will remain at the level that existed on the appraisal date. If residential real estate values generally or in a particular geographic area decline, the combined loan-to-value ratios might not be a reliable indicator of the rates of delinquencies, foreclosures and losses that could occur with respect to the HELOCs.

     All of the HELOCs will provide for a fifteen (15) day grace period for monthly payments. Borrowers may elect for monthly payments to be deducted automatically from deposit accounts and may make payments by various means, including online transfers, phone payment and Western Union Quick Check, although an additional fee may be charged for these payment methods. A scheduled monthly payment with respect to a HELOC is generally considered “delinquent” if the mortgagor fails to make the scheduled monthly payment prior to the due date occurring immediately after the due date on which the scheduled monthly payment was originally due.

     As of the Statistical Cut-off Date, 0.03% of the statistical calculation HELOCs were 30 days delinquent in payment of principal and interest and none were greater than 30 days delinquent in payment of principal and interest, 0.25% of the statistical calculation HELOCs had been 30 to 59 days delinquent in payment of principal and interest in the last 12 months, and none of the statistical calculation HELOCs had been 60 days or more delinquent in payment of principal and interest in the last 12 months.

     The mortgagors may prepay their mortgage loans at any time without paying a prepayment penalty. For 66.39% of the statistical calculation HELOCs, by Statistical Cut-off Date Principal Balance, an early termination fee may be owed in connection with a termination of the related Credit Line Agreement within a specified period following its origination. The holders of the Class L Certificates will be entitled to all early termination fees received on the HELOCs, and those amounts will not be available for distribution on the notes. Under certain circumstances, as described in the sale and servicing agreement, the servicer may waive the payment of any otherwise applicable early termination fee.

     Each statistical calculation HELOC was originated on or after April 22, 2003 and no statistical calculation HELOC was originated after February 26, 2007. The earliest stated maturity date of any statistical calculation HELOC is May 1, 2020, and the latest stated maturity date of any HELOC is December 28, 2036.

     The interest rate on each HELOC is indexed to the “Prime Rate” as published in the “Money Rates” table of the Wall Street Journal.

     The statistical calculation HELOCs have the characteristics, as of the Statistical Cut-off Date, set forth in Annex I of this prospectus supplement (the sum in any column may not equal the total indicated due to rounding). The depositor believes that the information set forth in this prospectus supplement and in Annex I with respect to the statistical calculation HELOCs will be representative of the characteristics of the HELOC pool as it will be constituted at the time the notes are issued, although the range of loan rates and maturities and certain other characteristics of the HELOCs will vary.

See Annex I to this prospectus supplement.

Representation and Warranties

     The seller will make representations and warranties as to the accuracy in all material respects of information furnished to the indenture trustee and the issuing entity with respect to each HELOC. In addition, the seller will represent and warrant, on the Closing Date, with respect to each HELOC that, among other things: (1) at the time of transfer to the trust, the seller has transferred or assigned all of its right, title and interest in each HELOC and the related documents, free of any lien, subject to exceptions; (2) each HELOC was generated under a note or Credit Line Agreement that complied, at the time of origination, in all material respects with applicable state and federal laws including all applicable anti-predatory and anti-abusive lending laws; (3) each loan file contains the

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documents specified in the sale and servicing agreement; (4) as of the Cut-off Date, none of the HELOCs is more than 30 days delinquent; (5) all of the HELOCs were originated or acquired from third parties substantially in accordance with the applicable originator’s underwriting criteria in effect at the time of origination, (6) none of the HELOCs constitute “high cost loans” under applicable anti-predatory and anti-abusive lending laws, (7) none of the mortgaged properties securing the HELOCs is subject to any material damage by waste, fire, earthquake, windstorm, flood or other casualty which is not fully insured by a hazard insurance policy issued by an insurer acceptable under the Fannie Mae Guidelines and (8) any such hazard insurance policy referred to in the preceding clause is in full force and effect and contains a standard mortgagee clause naming the originator and its successors and assigns as loss payee and all premiums due thereon have been paid. Upon discovery of a breach of any representation and warranty that materially and adversely affects the interests of the noteholders or the insurer in a HELOC, the seller will have a period of 90 days after discovery or notice of the breach to effect a cure. If the breach cannot be cured within the 90-day period, the seller will be obligated to repurchase the HELOC and to deposit the Purchase Price (as defined below) into the Collection Account. Upon retransfer, the principal balance of the HELOC will be deducted from the pool balance. In lieu of any repurchase, a seller may substitute one or more Eligible Substitute Mortgage Loans (as defined below). Any repurchase or substitution will be considered a payment in full of the defective mortgage loan. The obligation of the seller to accept a retransfer of a defective HELOC through repurchase or substitution is the sole remedy regarding any defects in the HELOC and related documents available to the indenture trustee or the noteholders.

     With respect to any HELOC, the “Purchase Price” is equal to the principal balance of the HELOC at the time of any transfer described above plus (a) the greater of (i) accrued and unpaid interest at the applicable mortgage loan rate net of the servicing fee to the date of repurchase and (ii) 30 days’ interest, computed at the applicable mortgage loan rate and (b) any expenses incurred by the trust as a result of the defect, including any costs and damages actually incurred and paid by or on behalf of the trust in connection with any violation of such mortgage loan of any predatory or abusive lending laws.

     With respect to the substitution for any defective HELOC, one or more substitute HELOCs, an “Eligible Substitute Mortgage Loan”, that generally will, on the date of substitution, among other characteristics set forth in the sale and servicing agreement:

• have a principal balance (or in the case of a substitution of more than one HELOC for a defective HELOC, an aggregate principal balance) that is approximately equal to the principal balance of the defective HELOC,
• have a loan rate not less than the loan rate of the defective HELOC and not more than 1% in excess of the loan rate of the defective HELOC,
• have a margin not less than the margin of the defective HELOC and not more than 1% in excess of the margin of the defective HELOC,
• have a lien position of the same or higher priority as the defective HELOC at the time the defective HELOC was transferred to the issuing entity,
• have a combined loan-to-value ratio not greater than that of the defective HELOC,
• have a maturity not later than the final scheduled payment date,
• have a borrower that has a credit score at least equal to that of the borrower under the defective HELOC, and
• comply with all of the representations and warranties set forth in the sale and servicing agreement as of the date of substitution.

     Notwithstanding the foregoing, the seller may not substitute an Eligible Substitute Mortgage Loan for a defective HELOC if the date of substitution is more than two years after the Closing Date, unless the seller delivers

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to the indenture trustee an opinion of counsel to the effect that the substitution will not (i) result in the imposition of the tax on “prohibited transactions” on the issuing entity or (ii) cause any REMIC created under the trust agreement to fail to qualify as a REMIC at any time that Notes are outstanding.

     To the extent the principal balance of an Eligible Substitute Mortgage Loan is less than the purchase price of the related defective HELOC, a seller will be required to make a deposit to the Collection Account equal to the sum of such difference and any applicable accrued interest adjustment set forth in the sale and servicing agreement.

     Notwithstanding the foregoing, in lieu of providing the duly executed assignment of the mortgage to the indenture trustee and the original recorded assignment or assignments of the mortgage together with all interim recorded assignments of such mortgage, above, the depositor may at its discretion provide evidence that the related mortgage is held through the MERS® System. In addition, the mortgages for some or all of the HELOCs in the trust fund that are not already held through the MERS® System may, at the discretion of the servicer, in the future be held through the MERS® System. For any mortgage held through the MERS® System, the mortgage is recorded in the name of Mortgage Electronic Registration Systems, Inc., or MERS, as nominee for the owner of the HELOC, and subsequent assignments of the mortgages were, or in the future may be, at the discretion of the servicer, registered electronically through the MERS® System. For each of these HELOCs, MERS serves as mortgagee of record on the mortgage solely as a nominee in an administrative capacity on behalf of the indenture trustee, and does not have any interest in the HELOCs.

THE ORIGINATOR

IndyMac Bank, F.S.B

     Approximately 80.38% (measured by the principal balance of the statistical calculation HELOCs as of the Statistical Cut-off Date) of the statistical calculation HELOCs were originated by IndyMac Bank, and the remainder of the HELOCs were originated by unaffiliated originators and purchased by IndyMac Bank. See “The Sponsor and Seller” below for additional information regarding IndyMac Bank.

     No other originator originated 10% or more of the statistical calculation HELOC pool, by statistical cut-off date principal balance.

INDYMAC BANK HELOC PROGRAM

HELOC Origination

     IndyMac Bank originates HELOCs through multiple channels, but primarily through its mortgage professionals, consumer direct, correspondent and conduit channels (“Direct Channel”).

     The general terms of HELOCs originated by IndyMac Bank are described below under “Description of the HELOCs—HELOC Terms—IndyMac Bank HELOCs.” The underwriting criteria of HELOCs originated by IndyMac Bank are described below under “Underwriting and Credit Criteria—IndyMac Bank.”

Purchases of HELOC Pools

     Beginning in May 2004, IndyMac Bank started acquiring pools of HELOCs from third party originators on a servicing released basis. To date, the size of pools purchased from third party originators range from $5 million to $100 million. Third party originators that are authorized to sell pools of HELOCs to IndyMac Bank under IndyMac Bank’s purchase criteria are pre-approved by IndyMac Bank based on its review of such originators’ underwriting criteria, financial conditions and experience as mortgage loan originators. All of the approved third party originators are Fannie Mae and Freddie Mac approved seller/servicers and follow underwriting guidelines generally acceptable to institutional investors.

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HELOC Underwriting and Credit Criteria

     All of the HELOCs originated by the seller were either originated directly by the seller or originated indirectly by the seller through the Direct Channel by authorized third-party vendors based on the seller’s underwriting standards. All of the HELOCs were underwritten generally in accordance with the seller’s underwriting standards. The following is a brief description of the underwriting standards and procedures applicable to the HELOCs.

     The seller’s underwriting standards with respect to the HELOCs generally will conform to those published in the seller’s underwriting guidelines, including the provisions of the seller’s underwriting guidelines applicable to the seller’s Home Equity Line of Credit Program. However, seller may approve a mortgage loan that otherwise does not meet seller’s underwriting standards based on certain mitigating factors. Such determination is made on a loan-by-loan basis. In addition, the underwriting standards as set forth in the seller’s underwriting guidelines are continually revised based on prevailing conditions in the residential mortgage market and the market for mortgage securities.

     The underwriting standards set forth in the seller’s Home Equity Line of Credit Program provide for several different levels of documentation: (1) the “Full Documentation Program,” (2) the “Stated Income Program,” (3) the “Pre-Approved Program”, (4) the “Invitation-to-Apply Program” (also referred to as the “ITA Program” herein) and (5) the “FastForward Program.”

      See “Mortgage Loan Program—Underwriting Process” in the accompanying prospectus.

Asset, Income and Employment Documentation

Full Documentation Program

     For Full Documentation HELOCs, a prospective borrower is required to fill out a detailed application providing pertinent credit information, including tax returns if the borrower is self-employed or received income from dividends and interest, rental properties or other income which can be verified via tax returns. In addition, a borrower (other than a self-employed borrower) must demonstrate income and employment directly by providing alternative documentation in the form of a pay stub showing year-to-date earnings and a W-2 to provide verification of employment. Borrowers that claim other sources of income such as pension, social security, VA benefits and public assistance must provide written documentation that identifies the source and amount of such income, such as an award letter, and demonstrate that such income can reasonably be expected to continue for at least 3 years. Income in the form of alimony, child support or separate maintenance income must be substantiated by a copy of the divorce decree or separate maintenance agreement, as applicable.

Stated Income Program

     Borrowers who qualify for the Stated Income Program need to provide only verbal verification of employment, but will be required to demonstrate that he or she has an average account balance of at least one month’s stated income from qualified assets and sources. Closing balances and mortgage loan proceeds, for example, may not be used to meet this requirement. The types of assets that can be considered in determining whether the reserve requirement has been met include funds from checking, savings, money market or CD accounts, stocks, bonds, and mutual funds. The Stated Income Program is not available to borrowers whose credit reports do not show that the borrower has had a mortgage for at least 12 months within the past 3 years.

Pre-Approved Program and ITA Program

     Borrowers who qualify under the ITA Program must provide either two current consecutive pay stubs or two current consecutive tax returns as income verification. A credit report is also required. Because borrowers who qualify under the Pre-Approved Program have high credit scores relative to the combined loan-to-value on the related mortgaged properties, Pre-Approved HELOCs require no documentation with respect to the borrowers’ income or employment.

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FastForward Program

     Borrowers who qualify under the FastForward Program must state their income, provide a signed Internal Revenue Service Form 4506 (authorizing IndyMac Bank to obtain copies of their tax returns), and state their assets; IndyMac Bank does not require any verification of income or assets under this program.

Credit Criteria

Full Documentation Program and Stated Income Program

      Each borrower under the Full Documentation Program must meet the following credit criteria:

• credit scores reported by at least 2 credit bureaus with at least 2 trade lines open for at least 12 months, or, one credit score with at least 5 trade lines open at least 12 months, or, 12 months of prior mortgage history;
• no mortgage payments thirty days or more delinquent within the last twelve months;
• no foreclosures within the last three years;
• borrower has not participated in a consumer credit counseling plan within the last two years; and
• no bankruptcy within the last two years.

     The minimum credit amount for HELOCs is $10,000 for most states in which the seller originates HELOCs.

Pre-Approved Program and ITA Program

Each borrower under either the Pre-Approved Program or the ITA Program must meet the following credit criteria:

• no bankruptcy, foreclosures, repossessions or debt counseling within the past 3 years;
• no charge-offs, unpaid collections, tax liens or judgments in an amount over $1,000;
• no payment delinquency of 60 days or more on any trade within the past year;
• no payment delinquency of 30 days or more on a mortgage or home equity line of credit within the past 2 years;
• no non-standard addresses should be shown on the credit report (i.e., P.O. Boxes)(applicable only to Pre-Approved HELOCs); and
• miscellaneous status codes (i.e., I.D. Theft) are not allowed (applicable only to Pre-Approved HELOCs).

First Mortgage Requirements

Full Documentation Program and Stated Income Program

     For second lien HELOCs, the following additional requirements apply with respect to the first lien mortgage:

• the LTV of the first lien may not exceed 90% (based on the current principal balance);

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     Pre-Approved Program and ITA Program

For second lien HELOCs, the principal balance of the first lien may not exceed $1,000,000.

Title Insurance

Full Documentation Program and Stated Income Program

     Title insurance requirements vary among the different types of HELOCs. A lender’s ALTA policy is required for first lien HELOCs. For second lien HELOCs originated concurrently with a first mortgage, a copy of the preliminary title report, commitment, binder, or abstract obtained for the origination of the first mortgage is required. The lender’s title insurance coverage amount need not include the amount of the second mortgage. There can be no intervening liens between first and second mortgages. For second lien HELOCs that are not originated concurrently with a first mortgage, the seller requires at a minimum a legal/vesting report for any HELOC with a credit limit of up to $250,000 and, for any HELOC with a credit limit over $250,000, a lender’s ALTA title policy. Any HELOCs with a credit limit of up to $250,000 also requires an affidavit from the borrower that there are no liens other than the first and second liens in place.

Pre-Approved Program and ITA Program

     Provided that there are no intervening liens between the first and second mortgages, title insurance is not required. In lieu of a title insurance policy, a title or vesting report is typically obtained on a HELOC originated under these programs and a lien search will be conducted. No title or vesting report is required for a pre-approved HELOC that is subordinated to an IndyMac Bank first mortgage that is less than six months old.

Appraisal Requirements

Full Documentation Program and Stated Income Program

     Appraisal requirements differ depending on the mortgage type and loan amounts. For second lien HELOCs originated concurrently with a first mortgage, a copy of the appraisal and a set of original photos used for the origination of the new first mortgage are required. For second lien HELOCs that are not originated concurrently with a first mortgage, if the loan amount is less than $100,000, either an AVM (defined below) or a Freddie Mac form 2055 (Quantitative Analysis Report with exterior inspection only) may be used, depending on whether the AVM provides an appraised value. For second lien HELOCs that are not originated concurrently with a first mortgage, if the loan amount is greater than $100,000, but less than $250,000, a Freddie Mac form 2055

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(Quantitative Analysis Appraisal Report with exterior inspection only) is required and the report must include a photo of the front view of the subject property, a location map and comparable sales. For second lien HELOCs that are not originated concurrently with a first mortgage, if the loan amount is greater than $250,000, a Freddie Mac form 1004 (Full Appraisal) is required.

Pre-Approved Program and ITA Program

      The appraisal requirement is dependent upon the loan amount and is as follows:

• loan amounts less than $75,000: an appraised value generated by the appraisal value model (“AVM”)
• loan amounts between $75,001 to $100,000: desktop appraisal
• loan amounts between $100,001 to $150,000: drive-by appraisal
• loan amounts between $150,001 to $200,000: full appraisal

     No appraisal is required for a pre-approved HELOC that is subordinated to an IndyMac Bank first mortgage that is less than six months old.

Mortgaged Properties

     The properties which secure repayment of the HELOCs are referred to as the “mortgaged properties.” Generally, mortgaged properties must be owner-occupied at the time of origination.

     In general, the mortgaged properties will include primarily single family properties. Specifically, the mortgaged properties may consist of:

• detached single family dwellings;
• individual units in planned unit developments;
• attached single family dwellings;
• condominium dwellings; or
• two unit properties.

      Additionally, occupancy may be:

• owner occupancy second home; or
• investor owned.

      The HELOCs will generally be subordinated to other mortgages on the same mortgaged property.

     Principal amounts on the HELOCs may be drawn down up to a maximum amount as set forth in the line of credit agreement or repaid from time to time. New draws by borrowers under the HELOCs will automatically become part of the underlying trust. As a result, the aggregate balance of the HELOCs will fluctuate from day to day as new draws by borrowers are added to the underlying trust and principal payments are applied to the balances.

Exceptions

     The foregoing criteria are guidelines only. On a case-by-case basis, the seller might determine that an applicant warrants an exception as to credit limit, debt-to-income ratio, FICO score, seasoning requirements,

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prohibition against second homes and combined liens. The seller might also allow an exception if the application reflects certain compensating factors such as high FICO score, low combined loan-to-value ratio, low debt-to-income ratio and high reserves. Accordingly, certain borrowers may qualify for a HELOC that, in the absence of such compensating factors, would not satisfy the seller’s underwriting criteria.

THE SPONSOR AND SELLER

     The sponsor is IndyMac Bank, F.S.B., a federal savings bank (“IndyMac Bank”). The sponsor is the same entity as the seller and the servicer of HELOCs, and is the parent company of the depositor. The sponsor has been the sponsor of securitizations backed by residential mortgage loans since 1993 and, in particular, the sponsor of securitizations backed by HELOCs since 2004.

     The following table describes the approximate volume of mortgage loan securitizations sponsored by IndyMac Bank since 2002.

     The sponsor securitized approximately $1.57 billion of HELOCs in 2004, approximately $0.80 billion of HELOCs in 2005, and approximately $2.61 billion of HELOCs in 2006. The sponsor has been originating HELOCs since 2000.

     As the sponsor, IndyMac Bank originates and acquires mortgage loans and initiates their securitization by transferring the mortgage loans to a special purpose entity, such as the depositor. The mortgage loans are then transferred to the issuing entity for the related securitization. The sponsor works with underwriters and rating agencies in structuring its securitization transactions.

     IndyMac Bank is a wholly-owned subsidiary of IndyMac Intermediate Holdings, Inc. (“IndyMac Holdings”), which is a wholly-owned subsidiary of IndyMac Bancorp, Inc. (“IndyMac Bancorp”), a holding company organized under the laws of Delaware. IndyMac Bancorp’s common stock is listed on the New York Stock Exchange. The notes and the certificates do not represent interests in or obligations of IndyMac Bank, IndyMac Holdings, IndyMac Bancorp or any affiliate thereof.

     The principal executive office of IndyMac Bank is located at 888 East Walnut Street, Pasadena, California 91101-7211, telephone number (800) 669-2300.

     IndyMac Bank is an institution experienced in originating and servicing HELOCs of the type contained in the pool. IndyMac Bank is a seller/servicer approved by Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”). IndyMac Bank also is a mortgagee approved by the U.S. Department of Housing and Urban Development (“HUD”)and an institution the deposit accounts of which are insured by the FDIC.

SERVICING OF THE HELOCS

The Servicer

     IndyMac Bank will act as the servicer. The principal executive office of the servicer is located at 888 East Walnut Street, Pasadena, California 91101-7211, telephone number (800) 669-2300.

     IndyMac Bank has been servicing mortgage loans since 1993 and servicing mortgage loans directly (servicing without the use of a subservicer) since 1998. As of the date of this prospectus supplement, IndyMac Bank

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is rated (x) by Fitch, “RPS2+” as a servicer of alt/A, prime and sub-prime mortgage loans, (y) by Moody’s, “SQ2-” as a primary servicer of sub-prime mortgage loans, SQ2 as a primary servicer of prime mortgage loans and “SQ2-” as a special servicer and (z) by S&P, “strong” as a residential mortgage servicer and residential mortgage sub-prime servicer, and “average” for residential mortgage special servicing, residential mortgage master servicing and subordinate residential mortgage servicing.

     The servicer will be responsible for servicing the HELOCs in accordance with the terms set forth in the sale and servicing agreement employing the same degree of skill and care which it employs in servicing the HELOCs comparable to the HELOCs serviced by the servicer for itself or others. The servicer may perform its servicing obligations under the sale and servicing agreement through one or more subservicers selected by the servicer. Notwithstanding any subservicing agreement, the servicer will remain liable for its servicing duties and obligations under the sale and servicing agreement as if the servicer alone were servicing the HELOCs. The servicer will not have any custodial responsibilities for the mortgage loans.

     However, if the servicing of any mortgage loan were to be transferred from a subservicer to IndyMac Bank, or if any other servicing transfer were to occur, there may be an increase in all delinquencies and defaults due to misapplied or lost payments, data input errors, system incompatibilities or otherwise. Although any increase in delinquencies is expected to be temporary, there can be no assurance as to the duration or severity of any disruption in servicing the applicable mortgage loans as a result of any servicing transfer. See also “Risk Factors—Inability to Replace Servicer Could Affect Collections and Recoveries on the HELOCs” and “—Relocation of the Servicer’s Default Management Services May Result in Increased Delinquencies and Defaults Which May Adversely Affect the

     Yield on the Notes” in this prospectus supplement and “Risk Factors—Bankruptcy or Insolvency May Affect the Timing and Amount of Distributions on the Securities” in the accompanying prospectus.

     The following table describes the approximate volume of conventional mortgage loans owned by others serviced by IndyMac Bank since 2003.

     IndyMac Bank has a sub-servicing agreement with Card Management Corporation (“CMC”) pursuant to which CMC acts as the sub-servicer and provides servicing on HELOCs originated by IndyMac Bank and collection services on HELOCs that are 68 days or less delinquent. IndyMac Bank will assume servicing of HELOCs that are 69 days or more delinquent and will service such HELOCs in accordance with the sale and servicing agreement. CMC has an agreement with First Data Resources, Inc. (“FDR”) pursuant to which FDR provides data processing and settlement services to support and facilitate subservicing of the HELOCs by CMC for the benefit of the servicer.

     Servicer Responsibilities. IndyMac Bank, as the servicer will perform the following servicing responsibilities with respect to the HELOCs:

• receiving funds from borrowers, CMC and any other subservicer;
• reconciling servicing activity with respect to the HELOCs;
• calculating remittance amounts to the indenture trustee;
• sending remittances to the indenture trustee and the owner trustee for distributions to securityholders;
• coordinating loan repurchases;
• oversight of all servicing activity, including subservicers;
• following up with CMC with respect to home loans that are delinquent 68 days or less or for which servicing decisions may need to be made;
• servicing and employing loss mitigation strategies with respect to HELOCs that are delinquent 69 or more days delinquent;

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• management and liquidation of mortgaged properties acquired by foreclosure or deed in lieu of foreclosure; and
• providing certain notices and other responsibilities as detailed in the sale and servicing agreement.

     Subservicer Responsibilities. Under the related subservicing agreement, CMC or FDR, as applicable, is generally responsible for the following duties with respect to any HELOCs that have not become 69 days or more delinquent:

• communicating with borrowers;
• processing additional draw requests on the HELOCs;
• sending monthly remittance statements to borrowers;
• collecting payments from borrowers and performing collection services on HELOCs that are delinquent 68 days or less;
• accurate and timely accounting, reporting and remittance of the principal and interest portions of monthly installment payments to the servicer, together with any other sums paid by borrowers that are required to be remitted;
• security and fraud investigations;
• chargeback and dispute processing; and
• calculating and reporting payoffs.

     IndyMac Bank’s sub-servicing agreement with CMC is renewable automatically on an annual basis upon the expiration of its initial term in April 2009. This agreement can be terminated in the event that IndyMac Bank decides not to renew or that IndyMac Bank exercises its right to terminate for convenience. It is unlikely that IndyMac Bank will choose not to renew its agreement(s) with CMC or to exercise its right of termination because IndyMac Bank is obligated to pay a fee to CMC if IndyMac Bank chooses to terminate for convenience. IndyMac Bank is obligated to provide six months prior written notice to CMC if it chooses not to renew or to terminate its agreement(s) with CMC. The six-month notice period is intended to minimize the risk of any disruption in servicing that may be caused by the transfer of servicing responsibilities conducted by the subservicer.

     In addition, this agreement can be terminated after the expiration of any applicable grace period (x) at the election of IndyMac Bank, if CMC breaches any material terms of this agreement or certain performance guidelines, or upon any specified change of control of CMC, and (y) at the election of CMC, if IndyMac Bank breaches any material terms of this agreement, including its obligation to pay any servicing fees, FDR ceases to provide services to CMC or IndyMac Bank that are necessary for CMC to perform its obligations under the sub-servicing agreement (unless such cessation is caused by a breach of CMC’s obligations under its agreement with FDR) or upon any specified change of control of CMC. CMC is generally obligated to reasonably cooperate with IndyMac Bank during this six-month period to ensure an effective transfer of servicing responsibilities to either IndyMac Bank or a replacement sub-servicer selected by IndyMac Bank. Notwithstanding the termination of the sub-servicing arrangements, IndyMac Bank, as the servicer, will remain liable for its servicing duties and obligations under the sale and servicing agreement.

All fees of the subservicer with respect to the HELOCs will be paid by the servicer.

Card Management Corporation

     CMC is a corporation organized under the laws of the State of Indiana and is a wholly-owned subsidiary of Fifth Third Bancorp. CMC has been providing servicing and/or sub-servicing of credit card accounts since 1988. CMC has been sub-servicing credit cards tied to home equity line of credit loans since 1995 and has acted as the sub-servicer for credit cards tied to six securitized pools of home equity line of credit loans. IndyMac Bank is CMC’s only significant client for whom CMC provides servicing or sub-servicing of credit cards tied to home equity line of credit loans. CMC’s sub-servicing portfolio of credit cards tied to securitized home equity line of credit loans has grown as indicated by the following approximate totals:

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     CMC provides inbound and outbound customer services, collection services through 68 day delinquency, security and fraud investigations, and chargeback/dispute processing for such loans. There are no material legal or governmental proceedings pending against CMC, or of which any property of CMC is subject, that are material to the Noteholders, nor is CMC aware of any proceedings of this type contemplated by any governmental authorities.

First Data Resources, Inc.

     FDR was established in 1969 as the data processing unit of Mid-America Bankcard Association. In 1980, American Express acquired FDR and in 1992, FDR became an independent company as a subsidiary of First Data Corporation. According to FDR, it is a global provider of comprehensive transaction processing products and services to credit, debit, commercial, private label and oil card trusts. FDR’s home office in the United States is located in Omaha, Nebraska. Pursuant to CMC’s agreement with FDR, FDR has provided IndyMac Bank with services including account maintenance using FDR’s computer systems, daily and monthly reporting on account activities and distribution of monthly statements to borrowers.

Delinquency and Loss Experience

     Historically, a variety of factors, including the appreciation of real estate values, has limited the servicer’s loss and delinquency experience on its portfolio of serviced mortgage loans. There can be no assurance that factors beyond the servicer’s control, such as national or local economic conditions or downturns in the real estate markets of its lending areas, will not result in increased rates of delinquencies and foreclosure losses in the future. For example, a general deterioration of the real estate market regions where the mortgaged properties are located may result in increases in delinquencies of loans secured by real estate, slower absorption rates of real estate into the market and lower sales prices for real estate. A general weakening of the economy may result in decreases in the financial strength of borrowers and decreases in the value of collateral serving as collateral for loans. If the real estate market and economy continue to decline, the servicer may experience an increase in delinquencies on the loans it services and higher net losses on liquidated loans.

Servicing Compensation and Payment of Expenses

     The issuing entity has agreed to pay a monthly fee (the “Servicing Fee”) to the servicer with respect to each HELOC, equal to 0.50% annually on the principal balance of each HELOC (the “Servicing Fee Rate”). Any successors to the servicer will in all cases receive a fee in an amount equal to, but not greater than, the Servicing Fee calculated at the Servicing Fee Rate. As additional servicing compensation, the servicer is entitled to retain all servicing-related fees, including assumption fees, modification fees, ancillary servicing fees, extension fees, nonsufficient fund fees and late payment charges to the extent collected from the borrower (excluding early termination fees), together with any interest or other income earned on funds held in the custodial accounts, escrow accounts, the Collection Account and the Payment Account.

     The servicer will be entitled to reimbursement for certain expenses prior to payment of any amounts to noteholders. See “The Agreements—Servicing and Other Compensation and Payment of Expenses” in the accompanying prospectus.

     In addition, other fees and expenses of the issuing entity will be paid from collections received on the HELOCs prior to distributions to the noteholders, as described in “Description of the Notes—Fees and Expenses” in this prospectus supplement.

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Collection of Taxes, Assessments and Similar Items

     The servicer will, to the extent required by the related loan documents, ensure that payment of hazard insurance premiums and real estate taxes with respect to the HELOCs, are made and will make servicing advances with respect to delinquencies in required payments by the related borrowers to the extent necessary to avoid the loss of a Mortgaged Property due to a tax sale or the foreclosure thereof as a result of a tax lien.

Insurance Coverage

     The servicer is required to obtain and thereafter maintain in effect a bond, corporate guaranty or similar form of insurance coverage (which may provide blanket coverage), or any combination thereof, insuring against loss occasioned by the errors and omissions of their respective officers and employees.

Evidence as to Compliance

     Under the sale and servicing agreement, and unless a Form 15 Suspension Notice has been filed, the servicer will be required to furnish to the indenture trustee and the insurer an annual servicer report detailing the servicer’s assessment of its compliance with the servicing criteria set forth in the relevant SEC regulations for asset-backed securities transactions, including Item 1122 of Regulation AB, as of and for the period ending the end of each fiscal year of the trust and the servicer’s assessment report will identify any material instance of noncompliance. In addition, on or before the last day of the third month after the end of each fiscal year of the trust (commencing on the first year after the issuance of the Notes), a firm of nationally recognized independent certified public accountants who may also render other services to the servicer or to its affiliates will furnish to the indenture trustee and the insurer (so long as the Notes are outstanding or amounts remain due and owing to the insurer and no Insurer Default has occurred and is continuing) with an attestation report as to such assessment report by the servicer during the servicer’s preceding fiscal year (or since the date of the issuance of the Notes in the case of the first such statement). The form of assessment report and attestation report required under the sale and servicing agreement may be replaced by any similar form using any standards that are now or in the future in use by the servicer for comparable assets and which otherwise comply with any note, regulation, “no-action” letter or similar guidelines promulgated by the SEC.

Servicer Default

     If the servicer is in default in its obligations under the sale and servicing agreement, the indenture trustee may with the consent of the insurer and shall, if directed to do so by the insurer or, if the Notes are no longer outstanding and no amounts remain due and owing to the insurer or if an insurer default has occurred and is continuing, the noteholders evidencing more than 50% of the Note Principal Amount of the Notes, terminate the servicer, and the indenture trustee shall either appoint a successor servicer acceptable to the insurer in accordance with the sale and servicing agreement or succeed to the responsibilities of the servicer.

Certain Matters regarding the Servicer

     For a description of the servicer’s discretion to waive certain charges in connection with the HELOCs, see “The Agreements—Collection Procedures” in the accompanying prospectus. For a description of replacement of the servicer after the occurrence of a Event of Servicer Termination or Insurance Agreement Event of Default, see “The Mortgage Loan and Purchase Agreement and the Sale and Servicing Agreement—Event of Servicer Termination; Rights Upon Event of Servicer Termination” in this prospectus supplement. For a discussion of the circumstances in which the servicer may resign or be removed, see “The Agreements—Certain Matters Regarding the Servicer and the Depositor” in the accompanying prospectus. For a discussion of the appointment of a successor servicer if the indenture trustee is unwilling or unable to act as successor to the servicer, see “The Agreements—Events of Default” in the accompanying prospectus.

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Modification of the HELOCS

     Except as is set forth in the following sentence, the servicer may not modify any HELOC unless that HELOC is in default or if default is reasonably foreseeable, and if the servicer has determined the modification of that HELOC to be in the best interests of the noteholders and the insurer. In addition, the servicer may modify a HELOC that is not in default and default is not reasonably foreseeable if it has delivered to the indenture trustee and the insurer (so long as the Notes are outstanding or any reimbursement amounts remain due and owing to the insurer) an opinion of counsel to the effect that such modification would not cause any REMIC created under the trust agreement to fail to qualify as a REMIC or result in the imposition of any prohibited transaction tax; provided it complies with accepted servicing practices of prudent HELOC servicers and no rate modification is greater than 0.25% per annum on any HELOC, and provided that the modification does not materially and adversely affect the interests of the noteholders, the certificateholders or the insurer (taking into account the aggregate effect of all previous modifications to date).

     In addition to the foregoing, the servicer’s ability to permit or effect servicing modifications will be subject to other limitations described in the sale and servicing agreement, including but not limited to the limitations described in this paragraph. Any amounts added to the credit limit of a HELOC will be required to be fully amortized over the remaining term, or the extended term, of the HELOC. The final maturity of any HELOC may not be extended beyond the third Payment Date prior to the Final Scheduled Payment Date. The aggregate current principal balance of all HELOCs subject to modifications can be no more than 3.50% of the aggregate principal balance of the HELOCs as of the cut-off date, but this limit may be increased from time to time with the consent of the insurer.

Certain Modifications and Refinancings

     The servicer will be permitted to modify any HELOC at the request of the related mortgagor, provided that the servicer purchases the HELOC from the issuing entity immediately preceding the modification. Any modification of a HELOC that relates to a reduction of the related interest rate may not be made unless the modified interest rate is approximately equal to a prevailing market rate. The servicer may identify mortgagors who are likely to refinance their HELOCs (and therefore cause a prepayment in full) and inform them of the availability of the option of modification in lieu of refinancing. Mortgagors who are informed of this option are more likely to request a modification than mortgagors who are not so informed. Any purchase of a HELOC subject to a modification will be for a price equal to 100% of the Principal Balance of that HELOC, plus accrued and unpaid interest on such HELOC up to the first day of the month in which the proceeds are to be distributed at the applicable mortgage rate, net of the servicing fee and any unreimbursed advances of principal and interest on the HELOC made by the servicer. The servicer will be required to deposit the purchase price in the Collection Account within one business day of the purchase of that HELOC and the purchase price will be treated by the servicer and the trustee as a prepayment in full of the related HELOC, and will be distributed by the trustee in accordance with the sale and servicing agreement. Purchases of HELOCs may occur when prevailing interest rates are below the interest rates on the HELOCs and mortgagors request modifications as an alternative to refinancings. The servicer will indemnify the issuing entity against liability for any prohibited transactions taxes and any interest, additions or penalties imposed on any REMIC as a result of any modification or purchase.

Limitations on Liability

     The servicer will not be liable to the trust or the noteholders for any action taken, or for refraining from the taking of any action, in good faith or for errors in judgment. This limitation on liability does not protect the servicer and any director, officer, employee or agent of the servicer from liability in connection with willful misfeasance, bad faith or negligence in the performance of duties or by reason of reckless disregard of obligations and duties. The terms of the sale and servicing agreement will provide that the servicer, depositor and sponsor will be indemnified and held harmless by the trust against any loss, liability, or expense incurred by the servicer, depositor or sponsor, as applicable, in connection with any legal action relating to the sale and servicing agreement or the notes other than any loss, liability or expense (i) incurred by the servicer’s, depositor’s or sponsor’s, as applicable, willful misfeasance, bad faith or negligence in the performance of the servicer’s duties under the sale and servicing agreement or (ii) by reason of reckless disregard, of the servicer’s, depositor’s or sponsor’s, as applicable, obligations and duties under the sale and servicing agreement. None of the servicer, the depositor or the sponsor

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will be under any obligation to appear in, prosecute or defend any legal action unless: (i) such action relates to the servicer’s, depositor’s or sponsor’s, as applicable, duties under the sale and servicing agreement; or (ii) the servicer, depositor or sponsor, as applicable, deems such action necessary or desirable. In the event that the servicer, depositor or sponsor, as applicable, appears in, prosecutes or defends any legal action, the sale and servicing agreement will provide that the servicer, depositor or sponsor, as applicable, and any director, officer, employee or agent of the servicer, depositor or sponsor, as applicable, will be reimbursed from the trust for all costs. See “The Agreements—Certain Matters Regarding the Servicer and the Depositor” in the accompanying prospectus.

STATIC POOL DATA

     Certain static pool information for IndyMac Bank’s seven other HELOC securitizations, three of which were issued in 2004 and four of which were issued in 2006, may be found at:

http://regab.IndyMacbank.com.

     Once you have accessed this internet address you will need to select “HELOC” under the tab for Deal Category, “2004” or “2006” under the tab for Vintage Year, “Heloc 2004-1,” “Heloc 2004-2,” “Heloc 2004-LH1,” “Heloc 2006-H1”, “Heloc 2006-H2” “Heloc 2006-H3” or “Heloc 2006-H4” under the tab for Deal Name and “Static” under the tab for Report Type. We refer you to this internet address solely for the purpose of providing you with the static pool information relating to the HELOCs. Access to this internet address is unrestricted and free of charge. Information provided through this internet address will not be deemed to be a part of this prospectus supplement, the accompanying prospectus or the registration statement.

      Each of these securitizations is unique, and the characteristics of each securitized mortgage pool vary from the others as well as from the mortgage loans to be included in the issuing entity that will issue the notes offered by this prospectus supplement. In addition, performance of a securitization pool may have been influenced by factors beyond the sponsor’s control, such as housing prices and market interest rates. Therefore, the performance of these prior securitizations is unlikely to be indicative of the future performance of the mortgage loans in this prospectus supplement. IndyMac Bank reports delinquency data for securitizations of HELOCs in a manner consistent with the methodology prescribed by the Office of Thrift Supervision in its instructions for the preparation of Thrift Financial Reports. Under this methodology, a payment is not considered thirty days delinquent unless it remains delinquent on the close of business on the following due date. This determination is made at the end of such following month. So, for instance, a mortgage loan that remains due for its March payment will be reported as current at the end of March and on the April statement to noteholders and will not be reported as 31-60 days past due until the end of April and on the May statement to noteholders. The effect of using this delinquency reporting methodology will be to understate the number and severity of delinquencies relative to the number and severity of delinquencies that would be reported under other methodologies such as those that treat a loan as thirty days delinquent if the payment has not been made by the end of the month in which it was first due.

     This static pool data is not deemed part of this prospectus supplement, the accompanying prospectus or the registration statement of which the accompanying prospectus is a part to the extent that the static pool data relates to:

• prior securitized pools of IndyMac Bank, F.S.B. that do not include the mortgage loans and that were established before January 1, 2006; or
• in the case of information regarding the HELOCs, information about the HELOCs for periods before January 1, 2006.

THE DEPOSITOR

     The depositor is IndyMac ABS, Inc., a Delaware corporation that is a wholly owned, limited purpose finance subsidiary of IndyMac Bank. Its address is 155 North Lake Avenue, Pasadena, California 91101, and its telephone number is (800) 669-2300. The depositor will not have any business operations other than securitizing mortgage assets and related activities.

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     The depositor is required to perform certain actions in connection with the notes on a continual basis, including but not limited to:

• to make all initial filings establishing or creating a security interest over the HELOCs and make all filings necessary to maintain the effectiveness of any original filings necessary under the relevant state commercial codes to perfect the indenture trustee’s security interest in the HELOCs and all proceeds thereof; and
• to assume the duties of the administrator or appoint a successor administrator in the event of the administrator’s automatic termination under the administration agreement.

     Generally, however, it is expected that the above functions will be performed by the depositor’s agents or one or more of the indenture trustee and the servicer in accordance with the related agreements.

     For additional information regarding the depositor, see “The Depositor” in the accompanying prospectus.

THE ISSUING ENTITY

     IndyMac Home Equity Mortgage Loan Asset-Backed Trust, Series 2007-H1 (the “issuing entity” or the “trust”), a Delaware statutory trust, will be created pursuant to and governed by a trust agreement, as amended and restated, among the seller, the depositor, the owner trustee and the indenture trustee, as registrar and paying agent. The trust agreement constitutes the “governing instrument” under the laws of the State of Delaware relating to statutory trusts. After its formation, the trust will not engage in any activity other than (1) acquiring, holding and managing the trust property described below, (2) issuing the notes and the certificates, (3) making payments on the notes and the certificates and (4) engaging in other activities that are necessary, suitable or convenient to accomplish these purposes.

     The trust’s principal offices are located in Wilmington, Delaware, in care of Wilmington Trust Company, as owner trustee, at Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001.

     The trust will be capitalized initially through a cash contribution by the depositor. The trust will not acquire any assets other than the property described above. Because the trust will have no operating history upon its establishment and will not engage in any business other than the duties discussed above, no historical, pro forma financial statements, or ratios of earnings to fixed changes with respect to the trust have been included in this prospectus supplement. The fiscal year end of the trust will be December 31.

     Since the issuing entity is a statutory trust, it may not be eligible for relief under the federal bankruptcy laws, unless it can be characterized as a “business trust” for purposes of the federal bankruptcy laws. Bankruptcy courts look at various considerations in making this determination, so it is not possible to predict with any certainty whether or not the issuing entity would be characterized as a “business trust.”

THE OWNER TRUSTEE

     Wilmington Trust Company (the “owner trustee”) is a Delaware banking corporation with trust powers incorporated in 1903. Wilmington Trust Company has served as owner trustee in numerous asset-backed securities transactions involving mortgage and mortgage-related receivables.

     Wilmington Trust Company is subject to various legal proceedings that arise from time to time in the ordinary course of business. Wilmington Trust Company does not believe that the ultimate resolution of any of these proceedings will have a materially adverse effect on its services as owner trustee.

     The owner trustee shall at all times be a corporation satisfying the provisions of Section 3807(a) of the Delaware trust statute, authorized to exercise corporate powers, having a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by Federal or state authorities, and, so long as the Notes are outstanding or any Reimbursement Amounts remain due and payable to the issuing entity and no Insurer Default has

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occurred and is continuing, acceptable to the Insurer in its reasonable discretion, and having (or having a parent which has) a short-term debt rating of at least A-1 or the equivalent by, or which is otherwise acceptable to, the Rating Agencies.

     The owner trustee may hold notes and certificates in its own name or as pledgee. To meet the legal requirements of certain jurisdictions, the owner trustee may appoint co-trustees or separate trustees of any part of the assets of the issuing entity under the trust agreement. All rights and obligations conferred or imposed on the owner trustee by the trust agreement will be conferred or imposed on any separate trustee or co-trustee. In any jurisdiction in which the owner trustee is incompetent or unqualified to perform any act, the separate trustee or co-trustee will perform the act solely at the direction of the owner trustee.

     The owner trustee may resign at any time on 30 days’ prior written notice, in which event the depositor must appoint a successor owner trustee. The depositor with the consent of the insurer may also remove the owner trustee if it becomes legally unable to act or becomes insolvent. Any resignation or removal of the owner trustee and appointment of a successor will not become effective until acceptance of the appointment by the successor.

     The owner trustee has no duty to manage, make any payment on, register, record, sell, dispose of, or otherwise deal with the trust property, or to otherwise take or refrain from taking any action under any document contemplated by the trust agreement, except as expressly provided by the trust agreement or in instructions received by the owner trustee pursuant to the trust agreement. The owner trustee will be required to perform only those duties specifically required of it under the trust agreement. The owner trustee will disburse all moneys actually received by it constituting part of the issuing entity pursuant the terms of the transaction documents, and it will not be accountable under the trust agreement or any other transaction document except in limited circumstances including, without limitation, (i) for its own willful misconduct, gross negligence or bad faith or (ii) for the inaccuracy of certain representations and warranties in the trust agreement.

THE INDENTURE TRUSTEE

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

     Notes may be surrendered at the offices designated by the indenture trustee from time to time for such purposes, which as of the Closing Date is of the indenture trustee located at DB Services Tennessee, 648 Grassmere Park Rd. Nashville, TN 37211-3658, Attention: Transfer Unit, or at any other address the indenture trustee designates from time to time. Correspondence may be directed to the indenture trustee at its corporate trust office located at 1761 East St. Andrew Place, Santa Ana, California 92705, Attention: Trust Administration IN07H1. Noteholders may access monthly statements from the indenture trustee’s website located at https://www.tss.db.com/invr. Noteholders may obtain assistance in operating the website by calling the indenture trustee’s investor relations desk at (800) 735-7777.

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

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     The indenture trustee will have the duties and responsibilities under the indenture, the sale and servicing agreement and the administration agreement described in this prospectus supplement and the accompanying prospectus, including collecting funds from the servicer to distribute to noteholders, providing noteholders and applicable rating agencies with monthly distribution statements, removing the servicer as a result of Event of Servicer Termination under the sale and servicing agreement, and appointing a successor servicer.

     The indenture trustee and any director, officer, employee or agent of the indenture trustee will be indemnified by the trust against any loss, liability or expense incurred by the indenture trustee arising out of or in connection with the acceptance or administration of its obligations and duties under the indenture or any other transaction document, other than any loss, liability or expense incurred by reason of willful misconduct, bad faith or negligence in the performance of the indenture trustee’s duties under the sale and servicing agreement or indenture.

     The servicer is required to indemnify the indenture trustee against any loss, liability or expense resulting from a breach of the servicer’s obligations and duties under the sale and servicing agreement or the indenture, including its failure to perform its duties and service the HELOCs in accordance with the terms of the sale and servicing agreement.

     The indenture trustee will be liable for its own negligent action, its own negligent failure to act or its own misconduct, its negligent failure to perform its obligations in compliance with the indenture, or any liability that would be imposed by reason of its willful misfeasance or bad faith. However, the indenture trustee will not be liable, individually or as indenture trustee:

• for an error of judgment made in good faith by a responsible officer of the indenture trustee, unless it is finally proven that the indenture trustee was negligent in ascertaining the pertinent facts,
• with respect to any action taken, suffered or omitted to be taken by it in good faith in accordance with the direction of insurer or, (i) if the Notes are no longer outstanding and no reimbursement amounts remain due and owing to the insurer or (ii) an Insurer Default has occurred and is continuing, the holders of notes evidencing not less than 25% of the voting rights of the notes relating to the time, method and place of conducting any proceeding for any remedy available to the indenture trustee, or exercising any trust or power conferred upon the indenture trustee under the indenture,
• for any action taken, suffered or omitted by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by the indenture, or
• for any loss on any investment of funds pursuant to the indenture (other than as issuer of the investment security).

     The indenture trustee may request and rely upon and shall be protected in acting or refraining from acting upon any resolution, officer’s note, note of auditors or any other note, statement, instrument, opinion, report, notice, request, consent, order, appraisal, bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties.

     The indenture trustee and any successor indenture trustee will, at all times, be a corporation or association organized and doing business under the laws of a state or the United States of America, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $100,000,000, subject to supervision or examination by federal or state authority and with a credit rating that would not cause any of the rating agencies to reduce their respective ratings of the Notes below the ratings issued on the Closing Date (or having provided security from time to time as is sufficient to avoid the reduction). If the indenture trustee no longer meets the foregoing requirements, the indenture trustee has agreed to resign immediately.

     The indenture trustee may at any time resign by giving written notice of resignation to the depositor, the issuing entity, the servicer, the insurer and each rating agency not less than 90 days before the specified resignation date.

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     The depositor or the servicer with the consent of the insurer (so long as the Notes are outstanding or amounts remain due and owing to the insurer and no Insurer Default has occurred and is continuing) may remove the indenture trustee and appoint a successor indenture trustee if:

• the indenture trustee ceases to meet the eligibility requirements described above,
• the indenture trustee becomes incapable of acting, or is adjudged as bankrupt or insolvent, or a receiver of the indenture trustee or of its property is appointed, or any public officer takes charge or control of the indenture trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, or
• a tax is imposed with respect to the issuing entity by any state in which the indenture trustee or the issuing entity is located and the imposition of the tax would be avoided by the appointment of a different indenture trustee.

     In addition, if the indenture trustee fails to meet the eligibility requirements described above, any noteholder may petition any court of competent jurisdiction for the removal of the indenture trustee and the appointment of a successor indenture trustee acceptable to the insurer. Notice of any removal of the indenture trustee shall be given to each rating agency by the successor indenture trustee. The party initiating the removal of a indenture trustee will bear any expense associated with the removal of the appointment of a new indenture trustee.

     Any successor indenture trustee must be reasonably acceptable to the insurer (so long as the Notes are outstanding or amounts remain due and owing to the insurer and no Insurer Default has occurred and is continuing). Any resignation or removal of the indenture trustee and appointment of a successor indenture trustee pursuant to any of the provisions described above will become effective upon acceptance of appointment by the successor indenture trustee. If a successor indenture trustee has not been appointed within 30 days after the indenture trustee gives notice of resignation, the resigning indenture trustee may petition any court of competent jurisdiction for the appointment of a successor indenture trustee.

     A successor indenture trustee will not be appointed unless the successor indenture trustee meets the eligibility requirements described above and its appointment does not adversely affect the then current ratings of the notes.

THE INSURER AND THE POLICY

The Insurer

     The following information set forth in this section and in the penultimate paragraph under "The Insurer and the Policy—The Policy" below has been provided by Financial Security Assurance Inc. (“FSA” or the “Insurer”). Accordingly, no representation is made by the issuing entity, the depositor, the seller, the servicer, the indenture trustee, the owner trustee or any underwriter as to the accuracy and completeness of this information. FSA accepts no responsibility for the accuracy or completeness of this prospectus supplement, or any other information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding FSA and its affiliates set forth under this heading or incorporated by reference herein. In addition, FSA makes no representation regarding the Notes or the advisability of investing in the Notes.

General

     Financial Security Assurance Inc., which is referred to in this prospectus supplement as “FSA” or the “Insurer”, is a monoline insurance company incorporated in 1984 under the laws of the State of New York. FSA is licensed to engage in financial guaranty insurance business in all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands and Guam.

     FSA and its subsidiaries are engaged in the business of writing financial guaranty insurance, principally in respect of securities offered in domestic and foreign markets and obligations under credit default swaps. Financial

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guaranty insurance provides a guaranty of scheduled payments on an issuing entity’s obligations—thereby enhancing the credit rating of those obligations—in consideration for the payment of a premium to the insurer. FSA and its subsidiaries principally insure asset-backed, collateralized and municipal obligations. Asset-backed obligations are typically supported by residential mortgage loans, consumer or trade receivables, securities or other assets having an ascertainable cash flow or market value. Collateralized obligations include public utility first mortgage bonds and sale/leaseback obligation bonds. Municipal obligations include general obligation bonds, special revenue bonds and other special obligations of state and local governments. Obligations may be insured on a funded basis through insurance of bonds or other securities or on an unfunded basis through insurance of credit default swaps referencing one or more bonds or other obligations (with or without a deductible or other provision for loss reduction). FSA insures both newly issued securities sold in the primary market and outstanding securities sold in the secondary market that satisfy FSA’s underwriting criteria.

     FSA is a wholly owned subsidiary of Financial Security Assurance Holdings Ltd., which is referred to in this prospectus supplement as “Holdings.” Holdings is an indirect subsidiary of Dexia S.A., a publicly held Belgian corporation. Dexia S.A., through its bank subsidiaries, is primarily engaged in the business of public finance, banking and asset management in France, Belgium and other European countries. No shareholder of Holdings or FSA is obligated to pay any debt of FSA or any claim under any insurance policy issued by FSA or to make any additional contribution to the capital of FSA.

     The principal executive offices of FSA are located at 31 West 52nd Street, New York, New York 10019, and its telephone number at that location is (212) 826-0100.

Reinsurance

     Under an intercompany agreement, liabilities on financial guaranty insurance written or reinsured from third parties by FSA or its domestic or Bermuda operating insurance company subsidiaries are generally reinsured among such companies on an agreed-upon percentage substantially proportional to their respective capital, surplus and reserves, subject to applicable statutory risk limitations. In addition, FSA reinsures a portion of its liabilities under certain of its financial guaranty insurance policies with other reinsurers under various treaties and on a transaction-by-transaction basis. This reinsurance is used by FSA as a risk management device and to comply with statutory and rating agency requirements; it does not alter or limit FSA’s obligations under any financial guaranty insurance policy.

     FSA’s financial strength is rated “triple-A” by Fitch Ratings, Moody’s Investors Service, Inc., Standard & Poor’s Ratings Services and Rating and Investment Information, Inc. These ratings reflect only the views of the respective rating agencies, are not recommendations to buy, sell or hold securities and are subject to revision or withdrawal at any time by those rating agencies.

Capitalization

     The following table sets forth the capitalization of FSA and its subsidiaries as of September 30, 2006 (unaudited) on the basis of accounting principles generally accepted in the United States of America:

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     For further information concerning FSA, see the Consolidated Financial Statements of FSA and Subsidiaries, and the notes thereto, incorporated by reference in this prospectus supplement. FSA’s financial statements are included as exhibits to reports filed with the Securities and Exchange Commission by Holdings pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 (as amended, the “Exchange Act”) and may be reviewed at the EDGAR web site maintained by the Securities and Exchange Commission. Copies of the statutory quarterly and annual statements filed with the State of New York Insurance Department by FSA are available upon request to the State of New York Insurance Department.

Incorporation of Certain Documents by Reference

     The consolidated financial statements of FSA included in, or as exhibits to, the following documents filed by Holdings with the Securities and Exchange Commission, are hereby incorporated by reference in this prospectus supplement:

     Please refer to FSA’s website at http://www.fsa.com by clicking on the Financial Information link, then clicking on the SEC Filings link to access the documents filed with the Securities and Exchange Commission referred to above. No information contained on the above referenced website, other than the financial information referenced above, is intended to be part of or conveyed with this prospectus supplement.

     All financial statements of FSA included in, or as exhibits to, documents filed by Holdings pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, after the filing of the last document referred to above and before the termination of the offering of the Notes shall be deemed incorporated by reference into this prospectus supplement.

     You may request a free copy of any filings incorporated by reference into this prospectus supplement by calling or writing the Depositor at 155 North Lake Avenue, Pasadena, California 91101, and its telephone number is (800) 669-2300.

     The issuing entity hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the trust’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 and each filing of the financial statements of Financial Security Assurance Inc. included in or as an exhibit to the annual report of Financial Security Assurance Holdings Ltd. filed pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in this prospectus supplement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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Insurance Regulation

     FSA is licensed and subject to regulation as a financial guaranty insurance corporation under the laws of the State of New York, its state of domicile. In addition, FSA and its insurance subsidiaries are subject to regulation by insurance laws of the various other jurisdictions in which they are licensed to do business. As a financial guaranty insurance corporation licensed to do business in the State of New York, FSA is subject to Article 69 of the New York Insurance Law which, among other things, limits the business of a financial guaranty insurer to writing financial guaranty insurance and related business lines, requires each financial guaranty insurer to maintain a minimum surplus to policyholders, establishes contingency, loss and unearned premium reserve requirements for each financial guaranty insurer, and limits the size of individual transactions and the volume of transactions that may be underwritten by each financial guaranty insurer. Other provisions of the New York Insurance Law, applicable to non-life insurance companies such as FSA, regulate, among other things, permitted investments, payment of dividends, transactions with affiliates, mergers, consolidations, acquisitions or sales of assets and incurrence of liability for borrowings.

The Policy

     The following summary of the terms of the Financial Guaranty Insurance Policy (the “Policy”) does not purport to be complete and is qualified in its entirety by reference to the Policy.

     Simultaneously with the issuance of the Notes, the Insurer will deliver the Policy to the indenture trustee for the benefit of each noteholder. Under the Policy, the Insurer unconditionally and irrevocably guarantees to the indenture trustee for the benefit of each Noteholder the full and complete payment of (i) Scheduled Payments (as defined below) on the Notes; and (ii) the amount of any Scheduled Payment which subsequently is avoided in whole or in part as a preference payment under applicable law.

     “Scheduled Payments” means, with respect to each Payment Date, the payment to be made to Noteholders in an aggregate amount equal to the sum, without duplication, of (i) accrued and unpaid interest for the related Interest Accrual Period at the Note Rate due on the Notes in accordance with the original terms of the Notes, the sale and servicing agreement and the indenture, (ii) for the Payment Date occurring in July 2037, the amount needed to pay the outstanding Note Principal Amount, and (iii) for any other Payment Date, the amount of the excess, if any, of the Note Principal Amount (in the case of clause (ii) above and this clause (iii), after giving effect to all allocations and payments of principal to be made on the Notes on the Payment Date, but without giving effect to payments under the Policy to be made on such Payment Date) over the Invested Amount for such Payment Date, in each case in accordance with the original terms of the Notes when issued and without regard to any amendment or modification of the Notes, the indenture or the sale and servicing agreement except amendments or modifications to which the Insurer has given its prior written consent. The Insurer may consent to any amendment of or modification to the indenture as permitted by the indenture; provided, however, that no such amendment or modification shall, without the consent of the Noteholder, change the entitlement of the Noteholder to payment under the Policy of any unpaid principal of the Notes due at final maturity or due on any scheduled principal amortization date, or any unpaid interest thereon due on any interest Payment Date. Scheduled Payments will not include, nor shall coverage be provided under the Policy in respect of, any interest shortfalls due to the application of the Relief Act, any prepayment interest shortfalls, any deferred interest or any amount required to increase the overcollateralization amount to the specified overcollateralization amount, that may be incurred or that may be distributable to the Notes. Scheduled Payments shall not include payments that become due on an accelerated basis as a result of a default by the issuing entity, an election by the issuing entity to pay principal on an accelerated basis, the occurrence of an event of default under the indenture or any other cause, unless the Insurer elects, in its sole discretion, to pay in whole or in part such principal due upon acceleration, together with any accrued interest to the date of acceleration. In the event the Insurer does not so elect, the Policy will continue to guarantee payment on the Notes in accordance with their original terms. Scheduled Payments shall not include any amounts due in respect of the Notes attributable to any increase in interest rate, penalty or other sum payable by the issuing entity by reason of any default or event of default in respect of the Notes, or by reason of any deterioration of the creditworthiness of the issuing entity, nor shall Scheduled Payments include, nor shall coverage be provided under the Policy in respect of, any taxes, withholding or other charge imposed by any governmental authority due in connection with the payment of any Scheduled Payment to a Noteholder.

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     Payment of claims on the Policy made in respect of Scheduled Payments will be made by the Insurer following Receipt by the Insurer of the appropriate notice for payment on the later to occur of (i) 12:00 noon, New York City time, on the second Business Day following Receipt of such notice for payment, and (ii) 12:00 noon, New York City time, on the date on which such payment was due on the Notes. The Insurer will be entitled to pay any amount under the Policy in respect of Scheduled Amounts on the Notes including any acceleration payment, whether or not any notice shall have been Received by the Insurer as provided above; provided, however, that by acceptance of the Policy, the indenture trustee agrees to provide upon request to the Insurer a notice in respect of any such payments made by the Insurer.

     If payment of any amount voided as a preference under applicable bankruptcy, insolvency, receivership or similar law is required to be made under the Policy, the Insurer shall cause such payment to be made on the later of (a) the date when due to be paid pursuant to the Order referred to below or (b) the first to occur of (i) the fourth Business Day following Receipt by the Insurer from the indenture trustee of (A) a certified copy of the order (the “Order”) of the court or other governmental body which exercised jurisdiction to the effect that the Noteholder is required to return principal or interest paid on the Notes during the term of the Policy because such payments were voidable as preference payments under applicable bankruptcy law, (B) a certificate of the Noteholder that the Order has been entered and is not subject to any stay, and (C) an assignment duly executed and delivered by the Noteholder, in such form as is reasonably required by the Insurer and provided to the Noteholder by the Insurer, irrevocably assigning to the Insurer all rights and claims of the Noteholder relating to or arising under the Notes against the Issuing entity or otherwise with respect to such preference payment, or (ii) the date of Receipt by the Insurer from the indenture trustee of the items referred to in clauses (A), (B) and (C) above if, at least four Business Days prior to such date of Receipt, the Insurer shall have Received written notice from the indenture trustee that such items were to be delivered on such date and such date was specified in such notice. Such payment shall be disbursed to the receiver, conservator, debtor-in-possession or trustee in bankruptcy named in the Order and not to the indenture trustee or any Noteholder directly (unless a Noteholder has previously paid such amount to the receiver, conservator, debtor-in-possession or trustee in bankruptcy named in the Order, in which case such payment shall be disbursed to the indenture trustee for distribution to such Noteholder upon proof of such payment reasonably satisfactory to the Insurer). In connection with the foregoing, the Insurer shall have the rights provided pursuant to Section 5.07 of the indenture, including, without limitation, the right to direct all matters relating to any preference claim and subrogation to the rights of the indenture trustee and each Noteholder in the conduct of any proceeding with respect to a preference claim.

     The terms “Receipt” and “Received,” with respect to the Policy, shall mean actual delivery to the Insurer and to the fiscal agent, if any, prior to 12:00 noon, New York City time, on a Business Day; delivery either on a day that is not a Business Day or after 12:00 noon, New York City time, shall be deemed to be Receipt on the next succeeding Business Day. If any notice or certificate given under the Policy by the indenture trustee is not in proper form or is not properly completed, executed or delivered, it shall be deemed not to have been Received, and the Insurer shall promptly so advise the indenture trustee and the indenture trustee may submit an amended notice.

     Under the Policy, “Business Day” means any day other than (a) a Saturday or Sunday or (b) a day on which banking institutions in the States of New York or California or in the city in which the corporate trust office or the office of the Insurer is located, are authorized or obligated by law, executive order or government decree to be closed.

     The Insurer’s obligations under the Policy in respect of Scheduled Payments shall be discharged to the extent funds are paid by the issuing entity in accordance with the indenture or disbursed by the Insurer as provided in the Policy whether or not such funds are properly applied by the indenture trustee.

     The Insurer shall be subrogated to the rights of each Noteholder to receive payments of principal and interest under the Notes to the extent of any payment by the Insurer under the Policy. For a discussion of the rights and powers of the Insurer upon an event of default under the indenture, see “The Trust Agreement, Indenture and Administration Agreement – Control Rights of the Insurer.”

     Pursuant to the sale and servicing agreement and the indenture, unless an insurer default exists, the Insurer will be treated as a Noteholder for certain purposes, will be entitled to exercise all rights of the Noteholders under the indenture without the consent of the Noteholders, and the Noteholders may exercise their rights under the

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indenture only with the written consent of the Insurer. In addition, the Insurer will have certain additional rights as a third party beneficiary to the sale and servicing agreement and the indenture.

     To the fullest extent permitted by applicable law, the Insurer agrees under the Policy not to assert, and waives, for the benefit of each Noteholder, all its rights (whether by counterclaim, setoff or otherwise) and defenses (including, without limitation, the defense of fraud), whether acquired by subrogation, assignment or otherwise, to the extent that such rights and defenses may be available to the Insurer to avoid payment of its obligations under the Policy in accordance with the express provisions of the Policy.

     Claims under the Policy constitute direct, unsecured and unsubordinated obligations of the Insurer ranking not less than pari passu with other unsecured and unsubordinated indebtedness of the Insurer for borrowed money. Claims against the Insurer under the Policy and claims against the Insurer under each other financial guaranty insurance policy issued thereby constitute pari passu claims against the general assets of the Insurer. The terms of the Policy cannot be modified or altered by any other agreement or instrument, or by the merger, consolidation or dissolution of the issuing entity. The Policy may not be cancelled or revoked prior to payment in full of the notes.

     The Policy is not covered by the property/casualty insurance security fund specified in Article 76 of the New York Insurance Law. The Policy is governed by the laws of the State of New York.

AFFILIATIONS AND RELATED TRANSACTIONS

     The depositor is a direct wholly owned, limited-purpose finance subsidiary of the sponsor. The sponsor is the servicer and the seller of the HELOCs.

     There is not currently, and there was not during the past two years, any material business relationship, agreement, arrangement, transaction or understanding that is or was entered into outside the ordinary course of business or is or was on terms other than would be obtained in an arm’s length transaction with an unrelated third party, between the sponsor and the depositor.

THE MORTGAGE LOAN PURCHASE AGREEMENT AND
THE SALE AND SERVICING AGREEMENT

General

     On the Closing Date, pursuant to the mortgage loan purchase agreement, the seller will sell the HELOCs to the depositor. Pursuant to the sale and servicing agreement, the depositor will, in turn, sell the HELOCs to the trust.

Assignment and Pledge of HELOCs

     The HELOCs will be assigned to the trust, together with all principal and interest received with respect to the HELOCs after the Cut-off Date, except for interest due on or prior to the Cut-off Date. Pursuant to the indenture, the trust will pledge all of its interest in such assets and any other property comprising the trust estate to the indenture trustee as security for the Notes.

     At the time of issuance of the Notes, the depositor will transfer to the trust all of its right, title and interest in and to each HELOC (including any Additional Balances arising in the future) and the related Credit Line Agreements, mortgages and other related documents (collectively, the “Related Documents”), including all collections received with respect to each such HELOC after the Cut-off Date (other than interest due on or prior to the Cut-off Date). Neither the trust nor the depositor will have any obligation to make additional funding under the Credit Line Agreements. The trust will in turn pledge to the indenture trustee under the indenture all of its right, title and interest in the foregoing property as collateral for the Notes and the insurer. Concurrently with such pledge, the indenture trustee will deliver the Notes on behalf of the trust. Each HELOC transferred to the trust will be identified on a schedule (the “HELOC Schedule”) delivered to the indenture trustee pursuant to the sale and servicing agreement, which will specify with respect to each HELOC, among other things, the original Principal Balance and

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the Cut-off Date Principal Balance, the loan rate, the maturity date, credit line, and applicable prepayment penalty provisions, if any.

     The sale and servicing agreement will require that, on or prior to the Closing Date, the depositor shall deliver to the indenture trustee, the Credit Line Agreement for each HELOC and, within 90 days following the Closing Date, executed assignments of mortgages related to each HELOC, other than HELOCs registered with Mortgage Electronic Registration Systems, Inc. (“MERS”) and the other Related Documents. In lieu of delivery of original mortgages, with respect to lost mortgages, the depositor may deliver true and correct copies thereof that with respect to lost mortgages have been certified as to the authenticity by the appropriate county recording office where such mortgage is recorded (or, subject to certain requirements set forth in the sale and servicing agreement, an optical image or representation thereof).

     An assignment of mortgage will only be recorded in those jurisdictions where recording is required by law to protect the interests of the owner trustee, indenture trustee, the Noteholders and the Certificateholders and only following the occurrence of a Recordation Event (as defined below) occurs. Upon the occurrence of a Recordation Event, the indenture trustee will complete and submit for recordation, at the expense of the seller, the assignments of the mortgages related to each such HELOC in favor of the indenture trustee within 90 days of the Recordation Event.

     A “Recordation Event” means (i) that the long-term senior unsecured debt rating of the seller (or any successor in interest thereto) is reduced to below “BBB-” by S&P or “Baa3” by Moody’s, (ii) an Event of Servicer Termination under the sale and servicing agreement has occurred and is continuing, (iii) the occurrence of a bankruptcy, insolvency or foreclosure relating to the servicer; provided, that any such Recordation Event may be waived by the insurer (so long as the Notes are outstanding or any Reimbursement Amounts remain due and owing to the insurer and no Insurer Default has occurred and is continuing) by providing written notice of such waiver to the servicer and the indenture trustee or (iv) at the written request of the insurer (so long as the Notes are outstanding or any Reimbursed Amounts remain due and owing to the insurer and no Insurer Default has occurred and is continuing), under certain circumstances specified in the sale and servicing agreement.

     Within 90 days of the Closing Date, the indenture trustee, pursuant to the sale and servicing agreement, will review the HELOCs and the Related Documents and if any HELOC or Related Document is found to be defective in any material respect and such defect is not cured within 90 days following notification thereof to the seller and the originator by the indenture trustee, the seller will be obligated to accept the transfer of such HELOC from the trust. Upon such transfer, the seller will be obligated to either substitute a HELOC or to purchase such HELOC at a purchase price equal to the Principal Balance of such HELOC plus an amount equal to all accrued but unpaid interest on such removed HELOC. The obligation of the seller either to accept a transfer of a defective HELOC and to convey a substitute HELOC or to repurchase such HELOC is the sole remedy regarding any defects in the HELOCs and Related Documents available to the indenture trustee or the Noteholders.

     The seller shall make no substitution more than two years after the Closing Date unless the seller delivers to the indenture trustee an opinion of counsel to the effect that such substitution will not (i) result in the imposition of the tax on “prohibited transactions” on the issuing entity or contributions after the “startup date,” as defined in Sections 860F(a)(2) and 860G(D) of the Code, respectively, or (ii) cause any REMIC created under the trust agreement to fail to qualify as a REMIC at any time that any Notes are outstanding.

Event of Servicer Termination; Rights Upon Event of Servicer Termination

     “Events of Servicer Termination” under the sale and servicing agreement include, among others:

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     So long as an Event of Servicer Termination remains unremedied under the sale and servicing agreement, the indenture trustee may with the consent of the insurer, and shall at the direction of the insurer (or if an Insurer Default has occurred and is continuing at the direction of the Noteholders evidencing not less than 66-2/3% of the aggregate Note Principal Amount of the Notes), terminate all of the rights and obligations of the servicer as servicer under the sale and servicing agreement and in and to the HELOCs (other than its right to recovery of other expenses and amounts advanced pursuant to the terms of the sale and servicing agreement), whereupon the indenture trustee will succeed to all the responsibilities, duties and liabilities of the servicer under the sale and servicing agreement and will be entitled to reasonable servicing compensation not to exceed the applicable servicing fee, together with other servicing compensation in the form of assumption fees, late payment charges or otherwise as provided in the sale and servicing agreement. Upon the occurrence of any Event of Servicer Termination, the insurer (or if an Insurer Default has occurred and is continuing, the indenture trustee or Noteholders evidencing more than 50% of the Notes) may declare the occurrence of a Rapid Amortization Event. See "Description of the Notes—Sale of HELOCs and Priority of Payment of Sale Proceeds Following Rapid Amortization Event" below for a description of the consequences of a Rapid Amortization Event.

     In addition, pursuant to the sale and servicing agreement, upon the occurrence of any Insurance Agreement Event of Default under the insurance and indemnity agreement, dated as of the Closing Date, between the issuing entity, the insurer, the seller, the servicer and the depositor (the “insurance agreement”), the indenture trustee will upon the direction of the insurer (so long as the Notes are outstanding or Reimbursement Amounts remain due and owing to the insurer and no Insurer Default has occurred and is continuing) terminate the rights and responsibilities of the servicer as servicer under the sale and servicing agreement (other than its right to recovery of other expenses and amounts advanced pursuant to the terms of the sale and servicing agreement). Upon any such termination of the servicer following an Insurance Agreement Event of Default, the insurer (or if an Insurer Default has occurred and is continuing, the indenture trustee or Noteholders evidencing more than 50% of the Notes) may declare the occurrence of a Rapid Amortization Event. See "Description of the Notes—Sale of HELOCs and Priority of Payment of Sale Proceeds Following Rapid Amortization Event" below for a description of the consequences of a Rapid Amortization Event.

     Upon the termination of the servicer following an Insurance Agreement Event of Default, the indenture trustee will succeed to all the responsibilities, duties and liabilities of the servicer or shall appoint a successor

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servicer as described below. “Insurance Agreement Events of Default” under the insurance agreement include, among others:

     In the event that the indenture trustee is unwilling or unable so to act, it may select, or petition a court of competent jurisdiction to appoint, an established housing and home finance institution, bank or mortgage servicing institution with a net worth of at least $15,000,000, which is acceptable to the insurer (so long as the Notes are outstanding or amounts remain due and owing to the insurer and no Insurer Default has occurred and is continuing) to act as successor servicer under the provisions of the sale and servicing agreement relating to the servicing of the HELOCs.

     During the continuance of any Event of Servicer Termination under the sale and servicing agreement, so long as such Event of Servicer Termination has not been remedied, the indenture trustee will have the right to take action to enforce its rights and remedies and to protect and enforce the rights and remedies of the Noteholders and the insurer, and the insurer may direct the time, method and place of conducting any proceeding for any remedy available to the indenture trustee or exercising any trust or power conferred upon the indenture trustee. However, the indenture trustee will not be under any obligation to pursue any remedy or to exercise any of the trusts or powers unless the indenture trustee has reasonable security or indemnity against the cost, expenses and liabilities that may be incurred by the indenture trustee therein or thereby. Also, the indenture trustee may decline to follow the direction of the insurer if the indenture trustee determines that the action or proceeding so directed may not lawfully be taken or would involve it in personal liability.

     No Noteholder, solely by virtue of that holder’s status as a Noteholder, will have any right under the sale and servicing agreement to institute any proceeding with respect to the sale and servicing agreement, unless an Insurer Default has occurred and is continuing, that holder previously has given to the indenture trustee notice of an Event of Servicer Termination and unless the Noteholders evidencing not less than a specified percentage of the aggregate Note Principal Amount of the Notes have made written request upon the indenture trustee to institute a

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proceeding in its own name as indenture trustee thereunder and have offered to the indenture trustee reasonable indemnity, and the indenture trustee for a specified number of days has neglected or refused to institute such a proceeding.

Amendment

     The sale and servicing agreement may be amended by the depositor, the issuing entity, the servicer and the indenture trustee, without consent of the Certificateholders and the Noteholders but (so long as the Notes are outstanding or amounts remain due and owing to the insurer and no Insurer Default has occurred and is continuing) with the consent of the insurer, (1) to cure any ambiguity, (2) to conform the provisions of the sale and servicing agreement to the information contained herein or to correct or supplement any provision therein, (3) to make any other provision with respect to matters or questions arising under the sale and servicing agreement or (4) to add, delete or amend any provision in order to comply with any requirements imposed by the Code, ERISA and their related regulations; provided, however, that no such amendment, as evidenced by an opinion of counsel, will adversely affect the status of the REMICs created by the trust agreement, nor shall such amendment adversely affect in any material respect the interests of any Noteholder or adversely affect the insurer without the consent of the insurer. Any such amendment will be deemed not to adversely affect in any material respect the interests of any Noteholder if the Rating Agencies confirms that such action would not adversely affect the then-current ratings on the Notes without regard to the Policy.

     The sale and servicing agreement may also be amended by the depositor, the trust, the servicer and the indenture trustee with the consent of Noteholders evidencing not less than 66-2/3% of the aggregate Note Principal Amount of the Notes, the insurer and Certificateholders evidencing not less than 66-2/3% of the aggregate principal balance of the Certificates of all of the Certificates affected thereby, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the sale and servicing agreement or modifying in any manner the rights of the parties to the sale and servicing agreement; provided, however, that no such amendment will be made unless an opinion of counsel has been delivered to the effect that such amendment will not adversely affect the status of the REMICs created by the trust agreement and no such amendment may (1) reduce in any manner the amount of, or delay the timing of, payments that are required to be made in respect of any Notes or Certificates or to the insurer without the consent of the Noteholders, the insurer (so long as the Notes are outstanding or amounts remain due and owing to the insurer) and the Certificateholders affected thereby or (2) reduce the percentage of Notes or Certificates the holders of which are required to consent to any such amendment without the consent of the Noteholders and holders of Certificates affected thereby.

Voting Rights

     Unless an Insurer Default exists, the insurer will be entitled to exercise all voting rights of the Noteholders as described under “The Trust Agreement, Indenture and Administration Agreement—Controlling Rights of the Insurer”. If an Insurer Default shall have occurred and is continuing, then 100% of all voting rights will be allocated to the Notes.

THE TRUST AGREEMENT, INDENTURE AND ADMINISTRATION AGREEMENT

General

     The Notes will be issued pursuant to the indenture. Notes in certificated form will be transferable and exchangeable at the Corporate Trust Office of the indenture trustee, which will serve as Note Registrar and Paying Agent. The indenture trustee will provide to a prospective or actual Noteholders, without charge, on written request, an electronic copy (without exhibits) of the indenture. Requests should be addressed to Deutsche Bank National Trust Company, 1761 East St. Andrew Place, Santa Ana, California 92705, Attention: Trust Administration IN07H1.

     The following summary describes certain terms of the trust agreement, the indenture and the administration agreement. The summary does not purport to be complete and is subject to, and qualified in its entirety by reference to, all the provisions of such agreements.

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Termination

     The trust will generally terminate on the later of (A) the Payment Date immediately following the payment in full of all amounts owing to the insurer and (B) the earliest of (i) the Payment Date on which the aggregate Note Principal Amount of the Notes (after application of any principal payments on such date) has been reduced to zero and all other amounts due and owing to the Noteholders have been paid in full, (ii) the Payment Date immediately following the final payment or other liquidation of the last HELOC in the trust, (iii) the Payment Date immediately following the Optional Redemption of the Notes by the servicer, as described below and (iv) the Payment Date in July 2037.

     The Notes are subject to redemption under the circumstances described under “Description of the Notes —Optional Redemption.”

     The indenture will be discharged upon the delivery to the indenture trustee for cancellation of all Notes or, with certain limitations, upon deposit with the indenture trustee of funds sufficient for the payment in full of all the Notes and upon payment of all Reimbursement Amounts owing to the insurer and the surrender of the Policy to the Insurer. Upon the payment in full of all outstanding Notes and the discharge of the indenture, the owner trustee will succeed to all the rights of the indenture trustee, and the holders of the Certificate will succeed to all the rights of the Noteholders pursuant to the sale and servicing agreement.

Administration

     Deutsche Bank National Trust Company (the “administrator”) or the depositor will agree, to the extent provided in the administration agreement, to provide certain notices and to perform certain other administrative obligations required to be performed by the trust under the sale and servicing agreement, the indenture and the trust agreement. In carrying out the foregoing duties, the administrator may enter into transactions with or otherwise deal with any of its affiliates; provided, however, that the terms of any such transactions or dealings are on terms no less favorable to the trust than would be available from unaffiliated parties. The administrator will receive compensation for its services as administrator as agreed between the administrator and the seller. The depositor will not receive additional compensation for its services under the administration agreement. The depositor is obligated to pay the administrator its compensation due under the administration agreement, including reasonable fees and expenses incurred by the administrator in performing its duties thereunder.

Amendment

     Generally, the trust agreement, the indenture and the administration agreement are subject to amendment by the parties thereto, in each case without consent of the holders of the Notes or Certificates but (so long as the Notes are outstanding or amounts remain due and owing to the insurer and no Insurer Default has occurred and is continuing) with the consent of the insurer, (1) to cure any ambiguity, (2) to conform the provisions of the applicable agreement to the information contained herein or to correct or supplement any provision therein, (3) to make any other provision with respect to matters or questions arising under the applicable agreement or (4) to add, delete or amend any provision in order to comply with any requirements imposed by the Code, ERISA and their related regulations; provided, however, that no amendment, as evidenced by an opinion of counsel, may adversely affect the status of the REMICs created by the trust agreement, nor may such amendment adversely affect in any material respect the interests of any Noteholder or any Certificateholder, or adversely affect the insurer without the consent of the insurer. Any amendment will be deemed not to adversely affect in any material respect the interests of any Noteholder if the Rating Agencies confirms that such action would not adversely affect the then-current ratings on the Notes without regard to the Policy.

     Additionally, each of the trust agreement, the indenture and the administration agreement may generally be amended by the parties thereto, with the consent of the insurer (so long as the Notes are outstanding or amounts remain due and owing to the insurer and no Insurer Default has occurred and is continuing) and the holders of the Notes and/or Certificates, as applicable, evidencing not less than 66-2/3% of the aggregate principal balance of the Notes and/or Certificates of each class, as applicable, affected thereby or all classes if all are affected for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the related agreement or modifying in any manner the rights of the parties to such agreement; provided, however, that no amendment may

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be made unless an opinion of counsel has been delivered to the effect that such amendment will not adversely affect the status of the REMICs created by the trust agreement and no amendment may (1) reduce in any manner the amount of, or delay the timing of, payments that are required to be made in respect of any Notes or Certificates without the consent of the Noteholders, the insurer (so long as the Notes are outstanding or amounts remain due and owing to the insurer) and the holders of the Class of Certificates affected thereby or (2) reduce the percentage of Notes or Certificates the holders of which are required to consent to any such amendment without the consent of the Noteholders and holders of Certificates affected thereby.

     In addition to the purposes described above, the indenture may be amended by the trust and the indenture trustee (so long as the Notes are outstanding or amounts remain due and owing to the insurer and no Insurer Default has occurred and is continuing), with the consent of the insurer and without obtaining the consent of the Noteholders, for the purpose of (1) correcting or amplifying the description of the trust estate subject to the indenture, (2) evidencing the succession of a successor to the trust, (3) adding to the covenants of the trust or surrendering any power conferred upon the trust under the indenture or (4) conveying or pledging any property to the indenture trustee. Any amendment of the provisions of the indenture will take the form of a supplemental indenture.

Servicing

     For a summary description of certain provisions of the sale and servicing agreement regarding servicing of the HELOCs, see “Servicing of the HELOCs” above.

Control Rights of the Insurer

     Pursuant to the terms of the indenture, unless an Insurer Default exists, the insurer will be deemed to be the Noteholder for all purposes, other than with respect to payment on the Notes and certain other limited purposes, and will be entitled to exercise all voting rights of the Noteholders thereunder, without the consent of the Noteholders, and the Noteholders may exercise such rights only with the prior written consent of the insurer. In addition, so long as an Insurer Default does not exist, the insurer will, as a third-party beneficiary to the indenture and the sale and servicing agreement, have, among others, the following rights:

• the right to give notices of breach or the right to terminate the rights and obligations of the servicer under the sale and servicing agreement in the event of an Event of Servicer Termination or an Insurance Agreement Event of Default and to institute proceedings against the servicer;
  
  
• the right to consent to or direct any waivers of defaults by the servicer;
  
  
• following the occurrence of a Rapid Amortization Trigger Event and so long as no Insurer Default has occurred and is continuing, the right to direct the indenture trustee to sell, dispose of or otherwise liquidate the trust property in a commercially reasonable manner and on commercially reasonable terms;
  
  
• the right to remove the indenture trustee upon an indenture trustee event of default pursuant to the indenture; and
  
  
• the right to require the seller to repurchase home equity lines of credit for breaches of representations and warranties or defects in documentation.

     So long as the Notes are outstanding or amounts remain due and owing to the insurer and no Insurer Default has occurred and is continuing, the insurer’s consent will be required prior to, among other things: (i) the removal of the indenture trustee or the servicer; (ii) the appointment of any successor indenture trustee or servicer; or (iii) any amendment to the indenture or the sale and servicing agreement.

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CERTAIN REGULATORY MATTERS RELATED TO BANKS

General

     The seller is a federal savings bank and, as such, the OTS and the FDIC have special powers under the banking laws to take certain actions upon the insolvency of the seller. For example, the FDIC has broad discretion and authority to appoint itself conservator or receiver of the seller.

Certain Matters Relating to Conservatorship and Receivership

     The transfer of the HELOCs by the seller to the depositor will be characterized in the mortgage loan purchase agreement as a sale transaction.

     The FDIC has issued a rule entitled “Treatment by the Federal Deposit Insurance Corporation as Conservator or Receiver of Financial Assets Transferred in Connection with a Securitization or Participation” (the “FDIA Rule”). Under the FDIA Rule, the FDIC has stated that it will not reclaim, recover, or recharacterize a financial institution’s transfer of financial assets such as the HELOCs if (i) the transfer involved a securitization of financial assets and meets specified conditions for treatment as a sale under relevant accounting principles (other than the condition that, as a result of the transfer, the financial assets are “legally isolated” from the seller), (ii) the financial institution received adequate consideration for the transfer at the time of the transfer, (iii) the parties intended that the transfer constitute a sale for accounting purposes and the relevant documents reflect such intentions, and (iv) the financial assets were not transferred fraudulently, in contemplation of the financial institution’s insolvency, or with the intent to hinder, delay, or defraud the financial institution or its creditors. The seller’s transfer of the HELOCs and the mortgage loan purchase agreement are intended to satisfy all of these conditions.

     Nevertheless, in the event of insolvency of the seller, if the FDIC were to take the position that the FDIA Rule did not apply to the seller’s transfer of the HELOCs or that such transfer failed to satisfy the requirements of the FDIA Rule, and if the FDIC were further successful in an attempt to recharacterize the transfer of the HELOCs as a borrowing secured by a pledge of the HELOCs instead of a sale, the FDIC as conservator or receiver, could elect to accelerate payment of the notes and liquidate the HELOCs. In the event of an acceleration of the notes, the trust would lose the right to future payments of interest, might suffer reinvestment losses in a lower interest rate environment and may fail to recover the initial investment made by the depositor in the HELOCs. Further, with respect to an acceleration by the FDIC, interest may be payable only through the date of appointment of the FDIC as conservator or receiver. The FDIC has a reasonable period of time (which it has stated will generally not exceed 180 days after the date of its appointment) to elect to accelerate payment. Whether or not an acceleration takes place, delays in payments on the notes could occur. As a result, funds available to the trust to make payments on the notes may be reduced.

     In addition, if the FDIC were appointed as receiver or conservator for the seller, the FDIC would also have the power under the Federal Deposit Insurance Act (the “FDIA”), as amended, either to repudiate or modify contracts involving the seller, including the sale and servicing agreement and other transaction documents. If the FDIC did repudiate a contract, it would be liable for damages provided in the FDIA. These damages are generally limited to “direct compensatory damages” determined as of the date the FDIC is appointed conservator or receiver.

     The seller and the depositor will take steps to structure the transfer of the loans held in the issuing entity by the seller to the depositor as a sale. See “The Agreements—Assignment of Issuing Entity Assets” and “Risk Factors—Bankruptcy or Insolvency May Affect the Timing and Amount of Distributions on the Securities” in the accompanying prospectus.

Certain Regulatory Matters

     If the bank regulatory authorities supervising the seller or the servicer were to find that any obligation of the seller or the servicer or any of their affiliates under any securitization or other agreement, or any activity of the seller, the servicer or any affiliate, constituted an unsafe or unsound practice or violated any law, rule, regulation or

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written condition or agreement applicable to the seller, the servicer or any affiliate, such regulatory authorities may have the power under the FDIA or other applicable laws to order the seller, the servicer or any affiliate, among other things, to rescind such agreement or contract, refuse to perform that obligation, terminate the activity, amend the terms of such obligation or take such other action as such regulatory authorities determine to be appropriate. In such an event, the seller, the servicer and such affiliates may not be liable to noteholders for contractual damages for complying with such an order and noteholders may have no recourse against the applicable regulatory authority.

     While the seller has no reason to believe that any applicable regulatory authority would consider provisions relating to the seller, the servicer or any affiliate or the payment or amount of a servicing fee to the servicer or any affiliate, or any other obligation of the seller, the servicer or an affiliate under the mortgage loan purchase agreement, the sale and servicing agreement, the administration agreement, the trust agreement or the indenture, to be unsafe or unsound or violative of any law, rule or regulation applicable to them, there can be no assurance that any such regulatory authority would not conclude otherwise in the future. If such a bank regulatory authority did reach such a conclusion, and ordered the seller, the servicer or any affiliate to rescind or amend these agreements, payments to you could be delayed or, if the insurer fails to perform under the Policy, reduced.

DESCRIPTION OF THE NOTES

General

     Pursuant to the trust agreement (the “trust agreement”), dated as of the Cut-off Date and entered into among IndyMac ABS, Inc. (the “depositor”), the owner trustee and Deutsche Bank National Trust Company, as administrator, the trust will issue three classes of certificates, the Class B, Class L and Class R Certificates (collectively, the “Certificates”) on or about March 23, 2007 (the “Closing Date”). Pursuant to the indenture dated as of the Cut-off Date between the trust and the indenture trustee (the “indenture”), the trust will issue the Notes (collectively, the “Notes”). The Certificates represent the beneficial ownership interests in the trust and are not offered hereby. The Notes represent debt obligations of the trust. Payments on the Notes and certain rights of investors in the Notes will be governed by the indenture and the sale and servicing agreement. As used herein, the term, “Noteholder”, means, as to a particular Note, the holder of the Note set forth on the note register. The following summaries describe certain provisions of the indenture, the sale and servicing agreement and the trust agreement. For additional information on the provisions of the indenture, the sale and servicing agreement and the trust agreement, see “The Mortgage Loan Purchase Agreement and the Sale and Servicing Agreement” and “The Trust Agreement, Indenture and Administration Agreement” above and “The Agreements” in the accompanying prospectus.

     Payments on the Notes will be made on the 25th day of each month or, if the 25th day is not a Business Day, on the next succeeding Business Day, beginning in April 2007 (each, a “Payment Date”), to Noteholders on the applicable Record Date. The “Record Date” for the Notes with respect to each Payment Date will be the close of business on the Business Day immediately preceding such Payment Date (or, in the case of any Notes issued to beneficial holders in definitive form, the last Business Day of the calendar month preceding the month in which the related Payment Date occurs). A “Business Day” is generally any day other than a Saturday or Sunday or a day on which banks in New York or California or the city in which the corporate trust office of the indenture trustee or office of the insurer is located are required or authorized by law to be closed.

     Payments on the Notes will be made to each registered holder entitled thereto, by check or by wire transfer in immediately available funds; provided, that the final payment in respect of any Note will be made only upon presentation and surrender of such Note at the corporate trust office of the indenture trustee. See “The Trust—The Indenture Trustee” in this prospectus supplement.

     The Notes will be issued, maintained and transferred on the book-entry records of The Depository Trust Company (“DTC”) and its participants and for such purpose are referred to as “Book-Entry Notes.” The Notes will be offered in denominations of $250,000 and multiples of $1,000 in excess thereof. The Notes will be issued in book-entry form only. Definitive Notes, if issued, will be transferable and exchangeable at the corporate trust office of the indenture trustee, which will initially act as registrar (the “Registrar”). No service charge will be made for any registration of exchange or transfer of the Notes, but the indenture trustee may require payment of a sum sufficient to cover any tax or other governmental charge.

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     The Book-Entry Notes will be represented by one or more global notes that equal in the aggregate the initial Note Principal Amount of the Notes registered in the name of the nominee of DTC. The depositor has been informed by DTC that DTC’s nominee will be Cede & Co. No person acquiring an interest in a Book-Entry Note (each, a “Beneficial Owner”) will be entitled to receive a physical security representing such person’s interest (a “Definitive Note”, except as set forth below under “—Definitive Notes.” Unless and until Definitive Notes are issued for the Book-Entry Notes under the limited circumstances described in this prospectus supplement, all references to actions by Noteholders with respect to the Book-Entry Notes shall refer to actions taken by DTC upon instructions from its participants, and all references in this prospectus supplement to payments, notices, reports and statements to Noteholders with respect to the Book-Entry Notes shall refer to payments, notices, reports and statements to DTC or Cede & Co., as the registered holder of the Book-Entry Notes, for payment to Beneficial Owners by DTC in accordance with DTC procedures.

     Payments on the Book-Entry Notes will be made on each Payment Date by the indenture trustee to DTC. DTC will be responsible for crediting the amount of such payments to the accounts of the applicable DTC participants in accordance with DTC’s normal procedures. Each DTC participant will be responsible for disbursing such payment to the Beneficial Owners of the Book-Entry Notes that it represents and to each Financial Intermediary for which it acts as agent. Each such Financial Intermediary will be responsible for disbursing funds to the Beneficial Owners of the Book-Entry Notes that it represents.

     For additional information regarding DTC, and the Notes, see “Description of the Securities—Book-Entry Securities” in the accompanying prospectus.

Definitive Notes

     Definitive Notes will be issued to Beneficial Owners or their nominees, respectively, rather than to DTC or its nominee, only if DTC or the depositor advises the indenture trustee in writing that DTC is no longer willing or able to properly discharge its responsibilities as depository for the Notes and the depositor is unable to locate a qualified successor or after the occurrence of a Rapid Amortization Trigger Event, Beneficial Owners of the Book-Entry Notes representing at least a majority of the aggregate Note Principal Amount of the Book-Entry Notes advise DTC in writing that the continuation of a book-entry system through DTC is no longer in the best interests of such Beneficial Owners. Upon the occurrence of an event described above, the indenture trustee is required to direct DTC to notify participants that have ownership of Book-Entry Notes as indicated on the records of DTC of the availability of Definitive Notes for their Book-Entry Notes. Upon surrender by DTC of the Definitive Notes representing the Book-Entry Notes and upon receipt of instructions from DTC for re-registration, the indenture trustee will re-issue the Book-Entry Notes as Definitive Notes in the respective Note Principal Amounts owned by individual Beneficial Owners, and thereafter the indenture trustee will recognize the holders of such Definitive Notes as Noteholders under the indenture and the sale and servicing agreement.

Interest Payments

     Interest on the Notes will be payable monthly on each Payment Date, commencing in April 2007, at the Note Rate for the related Interest Accrual Period, in accordance with the priority of payment set forth in “—Priority of Payment” below.

     The “Note Rate” for any Interest Accrual Period will be the lesser of (1) the annual rate as described in the tables beginning on page S-5 and (2) the Maximum Rate for the related Interest Accrual Period.

     The “Maximum Rate” with respect to the Notes on any Payment Date is equal to the quotient of

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     The “Premium Amount” is 0.12% per annum on the Note Balance immediately prior to the related Payment Date multiplied by a fraction, the numerator of which is the number of days in the related Interest Accrual Period for the Notes and the denominator of which is 360.

     With respect to any Payment Date and HELOC, the “Collection Period” is the 14^th day of the calendar month immediately preceding such Payment Date to the 13^th day of the calendar month of such Payment Date.

     To the extent the Maximum Rate is less than the annual interest rate set forth on page S-5 for the Notes and any Payment Date, the deficiency will be deferred (the “Deferred Interest” respect to the Notes). The Policy issued by the insurer to the indenture trustee for the benefit of the Noteholders will not guarantee the payment of such Deferred Interest.

     Interest Accrual Period. The “Interest Accrual Period” with respect to each Payment Date will be the period from and including the preceding Payment Date (or, in the case of the first Payment Date, from the Closing Date) to, but excluding the current Payment Date. For any Payment Date, the interest then due with respect to the Notes (the “Interest Payment Amount”) will be calculated on the basis of the actual number of days in the Interest Accrual Period and a 360-day year using the Note Rate for such Payment Date.

Determination of LIBOR

     On the second LIBOR Business Day (as defined below) preceding the commencement of each Interest Accrual Period (each such date, a “LIBOR Determination Date”), the indenture trustee will determine LIBOR for purposes of calculating interest on the Notes based on the “Interest Settlement Rate” for U.S. dollar deposits of one month maturity set by the British Bankers’ Association (the “BBA”) as of 11:00 a.m. (London time) on the LIBOR Determination Date (“LIBOR”).

     The BBA’s Interest Settlement Rates are currently displayed on Reuters Monitor Money Rates Service page “LIBOR01” (such page, or such other page as may replace page LIBOR01 on that service or such other service as may be nominated by the BBA as the information vendor for the purpose of displaying the BBA’s Interest Settlement Rates for deposits in U.S. dollars, the “Designated Telerate Page”). Such Interest Settlement Rates are also currently available on Bloomberg L.P. page “BBAM.” The BBA’s Interest Settlement Rates currently are rounded to five decimal places.

     A “LIBOR Business Day” is any day on which banks in London and New York are open for conducting transactions in foreign currency and exchange.

     With respect to any LIBOR Determination Date, if the BBA’s Interest Settlement Rate does not appear on the Designated Telerate Page as of 11:00 a.m. (London time) on such date, or if the Designated Telerate Page is not available on such date, the indenture trustee will obtain such rate from the Reuters or Bloomberg page. If such rate is not published for such LIBOR Determination Date, LIBOR for such date will be the most recently published Interest Settlement Rate. In the event that the BBA no longer sets an Interest Settlement Rate, the indenture trustee will designate an alternative index that has performed, or that the indenture trustee expects to perform, in a manner substantially similar to the BBA’s Interest Settlement Rate.

     The establishment of LIBOR on each LIBOR Determination Date by the indenture trustee and the indenture trustee’s calculation of the rate of interest applicable to the Notes for the related Interest Accrual Period will (in the absence of manifest error) be final and binding.

     LIBOR for the first Interest Accrual Period will be 5.3200% .

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Principal Payments

     Principal Payment Amount. On each Payment Date, the Noteholders will receive, to the extent of Available Funds in accordance with the priority of payment set forth in “—Priority of Payment” below, the Principal Payment Amount for such Payment Date until the Note Principal Amount of the Notes has been reduced to zero.

     The Noteholders will receive, to the extent of Net Available Funds and until the Note Principal Amount of the Notes has been reduced to zero, the “Note Principal Payment Amount” on each Payment Date equal to (a) prior to the Stepdown Date or if a Trigger Event is in effect or a Rapid Amortization Trigger Event has occurred, the Principal Payment Amount for that Payment Date and (b) on or after the Stepdown Date unless a Trigger Event is in effect or a Rapid Amortization Trigger Event has occurred, the lesser of (i) the excess of (A) the Note Principal Amount of the Notes immediately prior to the applicable Payment Date over (B) the Note Target Amount for that Payment Date and (ii) the Principal Payment Amount for that Payment Date.

     The “Note Target Amount” for each Payment Date will equal the lesser of (a) the product of (i) approximately 95.50% and (ii) the Invested Amount for such Payment Date and (b) the excess if any of (i) the Invested Amount for such Payment Date over (ii) 0.50% of the Initial Invested Amount.

     The amount of principal paid on the Notes on any Payment Date depends on whether the Payment Date is during the Managed Amortization Period or the Rapid Amortization Period and on the Floating Allocation Percentage. The “Managed Amortization Period” is the period commencing on the first Payment Date, and ending on the earlier to occur of (x) the 120th Payment Date or (y) the Payment Date which immediately follows the occurrence of a Rapid Amortization Trigger Event. The “Rapid Amortization Period” is the period which immediately follows the end of the Managed Amortization Period. A “Rapid Amortization Trigger Event” ”will occur if a Rapid Amortization Event is declared to have occurred or has occurred automatically as set forth in “Description of the Notes—Rapid Amortization Events” below.

     With respect to each Payment Date and the Notes, the “Principal Payment Amount” will equal the excess of (a) the Maximum Principal Payment over (b) the Overcollateralization Reduction Amount, if any, in each case, with respect to that Payment Date. With respect to each Payment Date and the Notes, the “Maximum Principal Payment” will equal (i) during the Managed Amortization Period, the Net Principal Collections with respect to that Payment Date, and (ii) during the Rapid Amortization Period, the Floating Allocation Percentage of Principal Collections relating to that Payment Date. With respect to each Payment Date, “Net Principal Collections” for each Payment Date will equal the positive difference between (x) the Floating Allocation Percentage of Principal Collections with respect to that Payment Date and (y) the Floating Allocation Percentage of the aggregate principal amount of all Additional Balances arising during the related Collection Period.

     The “Additional Balances” with respect to any HELOC on any date, are the aggregate amount of all additional borrowings by the related borrower subsequent to the Cut-off Date that are conveyed to the issuing entity pursuant to the sale and servicing agreement.

     The “Floating Allocation Percentage” on any Payment Date, is the percentage equivalent of a fraction the numerator of which is the Invested Amount for the preceding Payment Date (or in the case of the first Payment Date, the Initial Invested Amount) and the denominator of which is the Pool Balance at the end of the Collection Period preceding the previous Payment Date (or in the case of the first Payment Date, the Cut-off Date Principal Balance), provided such percentage shall not be greater than 100%.

     The “Invested Amount” on any Payment Date, is the Invested Amount for the preceding Payment Date (or in the case of the first Payment Date, the Initial Invested Amount) reduced by (i) the Maximum Principal Payment for that Payment Date and (ii) the Investor Charge-Off Amounts for that Payment Date. The “Initial Invested Amount” as of the Closing Date is expected to be approximately $650,071,585.70.

     The “Investor Charge-off Amount” on any Payment Date, is the Charge-Off Amounts incurred during the related Collection Period multiplied by the Floating Allocation Percentage.

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     The “Overcollateralization Reduction Amount” on any Payment Date, means the amount by which the Overcollateralization Amount exceeds the Specified Overcollateralization Amount, assuming that the Maximum Principal Payment had been distributed to the Noteholders on such Payment Date.

     The “Overcollateralization Amount” for any Payment Date is equal to the amount, if any, by which the Invested Amount for that Payment Date exceeds the aggregate Note Principal Amount of the Notes after taking into account any payments of principal on the related Payment Date.

     The “Specified Overcollateralization Amount” on any Payment Date prior to the Stepdown Date or if a Trigger Event is in effect is an amount equal to 2.25% of the Initial Invested Amount, and on any Payment Date on or after the Stepdown Date (provided no Trigger Event is in effect) is an amount equal to the greater of (i) 0.50% of the Initial Invested Amount and (2) 4.50% of the Invested Amount for such Payment Date.

     A “Trigger Event” will be in effect on any Payment Date if:

     (a) the sum of the Investor Charge-off Amounts for the Payment Date and all prior Payment Dates, expressed as a percentage of the Initial Invested Amount, is greater than:

(i) with respect to the first Payment Date to and including the 48th Payment Date, 1.75%,

(ii) with respect to the 49th Payment Date to and including the 60th Payment Date, 2.50%,

(iii) with respect to the 61st Payment Date to and including the 72nd Payment Date, 3.00%, and

(iv) with respect to the 73rd Payment Date and thereafter, 3.25%, or

     (b) the Six Month Rolling Delinquency Rate for such Payment Date is greater than 3.50% .

     The “Six Month Rolling Delinquency Rate” means, with respect to any Payment Date on and after the sixth Payment Date following the Closing Date, the average of the Principal Balances of 60+ Day Delinquent Mortgage Loans for the related Collection Period and the five preceding Collection Periods divided by the Pool Principal Balance, in each case on the last day of those Collection Periods, respectively.

     For any Collection Period, a “60+ Day Delinquent Mortgage Loan” is any HELOC that is (i) more than 60 days delinquent, (ii) for which the related borrower has filed for bankruptcy protection or is otherwise the subject of a bankruptcy or similar insolvency proceeding, (iii) that is in foreclosure, or (iv) with respect to which the related mortgaged property is characterized as REO property, in each case as of the end of that Collection Period.

     The “Stepdown Date” is the later to occur of (a) the 31st Payment Date and (b) the first Payment Date following the Payment Date on which the Overcollateralization Amount is greater than or equal to 4.50% of the Invested Amount on that Payment Date.

     In addition, on the Final Scheduled Payment Date, the Noteholders will be entitled to receive a payment of principal in an amount equal to the Note Principal Amount of the Notes. The Final Scheduled Payment Date with respect to the Notes is the date which is six months after the Payment Date immediately following the month of the last due date of the latest maturing HELOC.

     Accelerated Principal. On any Payment Date on which there exists Excess Cash Flow with respect to the Notes, an “Accelerated Principal Payment” will be made, in reduction of the Note Principal Amount thereof, in an amount equal to the lesser of (A) the Excess Cash Flow and (B) the amount required to cause the Overcollateralization Amount to equal the Specified Overcollateralization Amount for that Payment Date.

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     “Excess Cash Flow” with respect to a Payment Date means the Floating Allocation Percentage of Net Available Funds on deposit in the Payment Account during the related Collection Period after making the payments on such Payment Date specified in clauses 1 through 5 under the caption “Description of the Notes — Priority of Payments”.

Rapid Amortization Events

     As described above, the Managed Amortization Period will continue through the 120th Payment Date, unless a Rapid Amortization Event occurs prior to such date in which case the Rapid Amortization Period will commence immediately. A “Rapid Amortization Event,” with respect to the Notes, refers to any of the following events: