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**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

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**Form 10-K      **

**(Mark      One)**

|   | **x** | **Annual                report pursuant to Section 13 or 15(d) of the Securities                Exchange Act of 1934 for the fiscal year ended December 31,                2006.** |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**OR**

|   | **o** | **Transition                report pursuant to Section 13 or 15(d) of the Securities                Exchange Act of 1934 for the transition period                from                to                .** |
|--------|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **Delaware**                                                                                        | **52-2029487**                                                    |
|-----------------------------------------------------------------------------------------------------|-------------------------------------------------------------------|
| (State                or other jurisdiction ofincorporation                or organization)         | (I.R.S.                EmployerIdentification                No.) |
| **103                Springer Building, 3411 Silverside Road, Wilmington,                Delaware** | **19803**                                                         |
| (Address                of principal executive offices)                                             | (Zip                Code)                                         |

| **(302)                478-6160**                                                                   |
|-----------------------------------------------------------------------------------------------------|
| Registrant’s                telephone number, including area code:                            |
|                                                                                                |
| Securities                registered pursuant to Section 12(b) of the Act:** **      |
|                                                                                                |   |
| Title                of Each Class                                                                  | Name                of Each Exchange on which Registered |
|                                                                                                |   |
| None                                                                                                | None |
|                                                                                                |
| Securities                registered pursuant to Section 12(g) of the                Act: |
| None                                                                                                |
|                                                                                                |

***a      Form 15 for this transaction was filed on January 26,      2007.**

***the      closing date for the transaction was September 28, 2006**

**Not      Applicable to Registrant**

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| Large                accelerated filer o | Accelerated                filer o | Non-accelerated                filer x |
|------------------------------------------|------------------------------------|----------------------------------------|

State      the      aggregate market value of the voting and non-voting common equity held by      non-affiliates computed by reference to the price at which the common equity      was      last sold, or the average bid and asked price of such common equity, as of      the      last business day of the      registrant’s      most      recently completed second fiscal quarter. **Not      Applicable to Registrant**.

**DOCUMENTS      INCORPORATED BY REFERENCE:**

**None**

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**PART I**

*Item      1.           Business*

*Item      1A.           Risk      Factors*

*Item      1B.           Unresolved      Staff Comments *

*Item      2.           Properties*

*Item      3.           Legal      Proceedings*

*Item      4.           Submission      of Matters to a Vote of Security Holders*

**PART II**

*Item      5.           Market for      Registrant’s Common Equity, Related Stockholder Matters and Issuer      Purchases*
* *
*of      Equity Securities*

*Item      6.           Selected      Financial Data*

*Item      7.           Management’s      Discussion and Analysis of Financial Condition and Results of      Operations*

Omitted      pursuant to General Instruction J to Form 10-K. 

*Item      7A.           Quantitative      and Qualitative Disclosures About Market Risk*

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*Item      8.           Financial      Statements and Supplementary Data*

*Item      9.           Changes in      and Disagreements with Accountants on Accounting and Financial      Disclosure*

*Item      9A.           Controls      and Procedures*

*Item      9B.           Other      Information*

**PART III**

*Item      10.           Directors      and Executive Officers of Registrant*

*Item      11.           Executive      Compensation*

*Item      12.           Security      Ownership of Certain Beneficial Owners and Management and Related Stockholder      Matters*

*Item      13.           Certain      Relationships and Related Transactions*

*Item      14.           Principal      Accounting Fees and Services*

**PART IV**

*Item      15.           Exhibits      and Financial Statement Schedules*

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**Exhibit      No.**

|   | 4.1 | Pooling                and Servicing Agreement dated as of September 1, 2006 (incorporated                by                reference to Exhibit 4.1 of the issuing entity’s current report of Form                8-K filed September 29, 2006). |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.2 | Swap                Agreement dated as of September 28, 2006 (incorporated by reference                to                Exhibit 99.2 of the issuing entity’s current report on Form 8-K filed on                September 29, 2006). |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.3 | Cap                Agreement dated as of September 28, 2006 (incorporated                by reference to Exhibit 99.3 of the issuing entity’s current report on                Form 8-K filed on September 29, 2006). |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.1 | Subservicing                Agreement dated as of May 31, 2006, as amended (incorporated by reference                to Exhibit 99.1 of the issuing entity’s current report on Form 8-K filed                on September 29, 2006). |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 31.1 | Rule                13a-14(a)/15d-14(a) Certification (Section 302                Certification). |
|--------|------|---------------------------------------------------------------------------------------------------|

|   | 33.1 | Equity                One, Inc.’s and Popular Mortgage Servicing, Inc.’s Management Report on                Assessment of Compliance with Applicable Servicing                Criteria.* |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 33.2 | The                Bank of New York’s and The Bank of New York Trust Company’s Assertion of                Compliance with Applicable Servicing                Criteria. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 33.3 | JPMorgan                Chase Bank, National Association Management’s Report on Assessment of                Compliance with Applicable Servicing                Criteria. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 33.4 | JPMorgan                Chase Bank, National Association Management’s Report on Assessment of                Compliance with Applicable Servicing                Criteria. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 33.5 | JPMorgan                Chase Bank, National Association Management’s Report on Assessment of                Compliance with Applicable Servicing                Criteria. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 33.6 | ZC                Sterling Insurance Agency, Inc.’s Report on Assessment of Compliance with                Securities and Exchange Commission’s Regulation AB Servicing                Criteria. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 33.7 | ZC                Real Estate Tax Solutions Limited’s Report on Assessment of Compliance                with Securities and Exchange Commission’s Regulation AB Servicing                Criteria. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 34.1 | Report                of Independent Registered Public Accounting Firm (PricewaterhouseCoopers                LLP). |
|--------|------|---------------------------------------------------------------------------------------------------------------------|

|   | 34.2 | Report                of Independent Registered Public Accounting                Firm |
|--------|------|---------------------------------------------------------------------------------------|

|   |   | (Ernst                & Young, LLP). |
|--------|--------|------------------------------------------|

|   | 34.3 | Report                of Independent Registered Public Accounting Firm |
|--------|------|------------------------------------------------------------------------|

|   |   | (PricewaterhouseCoopers                LLP). |
|--------|--------|----------------------------------------------|

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|   | 34.4 | Report                of Independent Registered Public Accounting                Firm |
|--------|------|---------------------------------------------------------------------------------------|

|   |   | (PricewaterhouseCoopers                LLP). |
|--------|--------|----------------------------------------------|

|   | 34.5 | Report                of Independent Registered Public Accounting Firm |
|--------|------|------------------------------------------------------------------------|

|   |   | (PricewaterhouseCoopers                LLP). |
|--------|--------|----------------------------------------------|

|   | 34.6 | Report                of Independent Registered Public Accounting Firm |
|--------|------|------------------------------------------------------------------------|

|   |   | (Ernst                & Young, LLP). |
|--------|--------|------------------------------------------|

|   | 34.7 | Report                of Independent Registered Public Accounting                Firm |
|--------|------|---------------------------------------------------------------------------------------|

|   |   | (Ernst                & Young, LLP). |
|--------|--------|------------------------------------------|

|   | 35.1 | Servicing                Compliance Statement of Equity One,                Inc. |
|--------|------|----------------------------------------------------------------------------------|

|   | 35.2 | Servicing                Compliance Statement of Popular Mortgage Servicing,                Inc. |
|--------|------|--------------------------------------------------------------------------------------------------|

**Explanatory      Note**

**Substitute      Information provided in accordance with General Instruction J to Form      10-K**

*Item      1112(b) of Regulation      AB.           Significant      Obligors of Pool Assets *

*Item      1114(b)(2) of Regulation      AB.           Credit      Enhancement and Other Support, except for certain derivatives instruments*

*Item      1115(b)(2) of Regulation      AB.           Certain      Derivatives Instruments*

None.

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*Item      1117 of Regulation      AB.           Legal      Proceedings*

*1119      of Regulation      AB.           Affiliations      and Certain Relationships and Related Transactions*

*Item      1122 of Regulation      AB.           Compliance      with Applicable Servicing Criteria *

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*Item      1123 of Regulation      AB.           Servicer      Compliance Statement*

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**SIGNATURES**

**Pursuant      to the requirements of Section 13 or 15(d) of the Securities Exchange      Act of 1934, the Registrant has duly caused this report to be signed on its      behalf by the undersigned, thereunto duly authorized.**

|   |   | POPULAR                  ABS, INC.                                                                  |
|--------|--------|-----------------------------------------------------------------------------------------------------|
|   |   | (Depositor)                                                                                         |
|   |   |                                                                                                |
|   |   |                                                                                                |
|   | By:    | /s/                  Alberto Paracchini                                                             |
|   |   | Name:                  Alberto Paracchini                                                           |
|   |   | Title:                  Executive Vice President                                                    |
|   |   |                            and Chief Financial Officer |

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**Exhibit      Index**

**Exhibit      No.**

|   | 4.1 | Pooling                and Servicing Agreement dated as of September 1, 2006 (incorporated                by                reference to Exhibit 4.1 of the issuing entity’s current report of Form                8-K filed September 29, 2006). |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.2 | Swap                Agreement dated as of September 28, 2006 (incorporated by reference                to                Exhibit 99.2 of the issuing entity’s current report on Form 8-K filed on                September 29, 2006). |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.3 | Cap                Agreement dated as of September 28, 2006 (incorporated                by reference to Exhibit 99.3 of the issuing entity’s current report on                Form 8-K filed on September 29, 2006). |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.1 | Subservicing                Agreement dated as of May 31, 2006, as amended (incorporated by reference                to Exhibit 99.1 of the issuing entity’s current report on Form 8-K filed                on September 29, 2006). |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 31.1 | Rule                13a-14(a)/15d-14(a) Certification (Section 302                Certification). |
|--------|------|---------------------------------------------------------------------------------------------------|

|   | 33.1 | Equity                One, Inc.’s and Popular Mortgage Servicing, Inc.’s Management Report on                Assessment of Compliance with Applicable Servicing                Criteria. |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 33.2 | The                Bank of New York’s and The Bank of New York Trust Company’s Assertion of                Compliance with Applicable Servicing                Criteria. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 33.3 | JPMorgan                Chase Bank, National Association Management’s Report on Assessment of                Compliance with Applicable Servicing                Criteria. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 33.4 | JPMorgan                Chase Bank, National Association Management’s Report on Assessment of                Compliance with Applicable Servicing                Criteria. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 33.5 | JPMorgan                Chase Bank, National Association Management’s Report on Assessment of                Compliance with Applicable Servicing                Criteria. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 33.6 | ZC                Sterling Insurance Agency, Inc.’s Report on Assessment of Compliance with                Securities and Exchange Commission’s Regulation AB Servicing                Criteria. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 33.7 | ZC                Real Estate Tax Solutions Limited’s Report on Assessment of Compliance                with Securities and Exchange Commission’s Regulation AB Servicing                Criteria. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 34.1 | Report                of Independent Registered Public Accounting Firm (PricewaterhouseCoopers                LLP). |
|--------|------|---------------------------------------------------------------------------------------------------------------------|

|   | 34.2 | Report                of Independent Registered Public Accounting                Firm |
|--------|------|---------------------------------------------------------------------------------------|

|   |   | (Ernst                & Young, LLP). |
|--------|--------|------------------------------------------|

|   | 34.3 | Report                of Independent Registered Public Accounting Firm |
|--------|------|------------------------------------------------------------------------|

|   |   | (PricewaterhouseCoopers                LLP). |
|--------|--------|----------------------------------------------|

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|   | 34.4 | Report                of Independent Registered Public Accounting                Firm |
|--------|------|---------------------------------------------------------------------------------------|

|   |   | (PricewaterhouseCoopers                LLP). |
|--------|--------|----------------------------------------------|

|   | 34.5 | Report                of Independent Registered Public Accounting Firm |
|--------|------|------------------------------------------------------------------------|

|   |   | (PricewaterhouseCoopers                LLP). |
|--------|--------|----------------------------------------------|

|   | 34.6 | Report                of Independent Registered Public Accounting Firm |
|--------|------|------------------------------------------------------------------------|

|   |   | (Ernst                & Young, LLP). |
|--------|--------|------------------------------------------|

|   | 34.7 | Report                of Independent Registered Public Accounting                Firm |
|--------|------|---------------------------------------------------------------------------------------|

|   |   | (Ernst                & Young, LLP). |
|--------|--------|------------------------------------------|

|   | 35.1 | Servicing                Compliance Statement of Equity One,                Inc. |
|--------|------|----------------------------------------------------------------------------------|

|   | 35.2 | Servicing                Compliance Statement of Popular Mortgage Servicing,                Inc. |
|--------|------|--------------------------------------------------------------------------------------------------|

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