----

**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**FORM      10-K**

**[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT      OF      1934**

**[        ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND      EXCHANGE ACT OF 1934**

|   | Delaware                                                                                    |   | 30-0183252                                                         |   |
|--------|---------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------|--------|
|   | (State                or other jurisdiction ofincorporation                or organization) |   | (I.R.S.                Employer Identification                No.) |   |

|   | o                Yes |   | x No |
|--------|----------------------|--------|-----------|

|   | o                Yes |   | x                No |
|--------|----------------------|--------|---------------------|

|   | x                Yes |   | o                No |
|--------|----------------------|--------|---------------------|

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

**DOCUMENTS      INCORPORATED BY REFERENCE**

**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        Operation.**

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

**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        9A(T). Controls and Procedures.**

**Item        9B. Other Information.**

**PART        III**

**Item        10. Directors, Executive Officers and Corporate        Governances.**

**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, and Director Independences.        **

**Item        14. Principal Accounting Fees and Services.**

**ADDITIONAL        DISCLOSURE ITEMS UNDER REGULATION AB**

**Item        1112(b) of Regulation AB. Significant Obligors Financial        Information.**

**Item        1114(b)(2) and 1115(b) of Regulation AB. Significant Enhancement Provider        Financial Information.**

**Item        1117 of Regulation AB. Legal Proceedings**

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

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

**Item        1123 of Regulation AB. Servicer Compliance Statement**

**PART      IV**

**Item        15. Exhibits, Financial Statement Schedules.**

| **Exhibit                    Number** | **Description**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|---------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 1.1                                   | Terms                    Agreement, dated March 22, 2006, between Bear, Stearns & Co. Inc., as                    underwriter and Structured Asset Mortgage Investments II Inc.,                    as                    depositor, relating to the Underwriting Agreement, dated March                    22, 2006,                    between Bear, Stearns & Co. Inc., as underwriter and Structured Asset                    Mortgage Investments II Inc., as depositor. (As previously filed                    on Form                    8-K filed on April 14, 2006 and is hereby incorporated by reference                    into                    this report on Form 10-K) |
| 4.1                                   | Pooling                    and Servicing Agreement, dated as of March 1, 2006, among Structured                    Asset                    Mortgage Investments II Inc., as depositor, EMC Mortgage Corporation,                    as                    sponsor and master servicer and LaSalle Bank National Association,                    as                    trustee. (As previously filed on Form 8-K filed on April 14,                    2006 and is                    hereby incorporated by reference into this report on Form                    10-K)                                                                                                                          |
|  4.1                             | Amendment                    Number One to the Pooling and Servicing Agreement, dated as of                    March 1,                    2006, among Structured Asset Mortgage Investments II Inc., as                    depositor,                    EMC Mortgage Corporation, as sponsor and master servicer and                    LaSalle Bank                    National Association, as trustee. (As previously filed on Form                    8-K filed                    on October 16, 2006 and is hereby incorporated by reference into                    this                    report on Form 10-K)                                                                         |
| 31                                    | Sarbanes-Oxley                    Certification                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 33(a)                                 | Report                    on assessment of compliance with servicing criteria for asset-backed                    securities, EMC Mortgage Corporation, as Master                    Servicer                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 33(b)                                 | Report                    on assessment of compliance with servicing criteria for asset-backed                    securities, LaSalle Bank National Association, as Trustee and                    Custodian                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 33(c)                                 | Report                    on assessment of compliance with servicing criteria for asset-backed                    securities, Wells Fargo Bank, NA, as Custodian                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 33(d)                                 | Report                    on assessment of compliance with servicing criteria for asset-backed                    securities, LandAmerica Tax and Flood Services, Inc., as servicing                    function participant                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 33(e)                                 | Report                    on assessment of compliance with servicing criteria for asset-backed                    securities, Assurant, Inc., as servicing function                    participant                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 34(a)                                 | Attestation                    report on assessment of compliance with servicing criteria for                    asset-backed securities, EMC Mortgage Corporation, as Master                    Servicer                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 34(b)                                 | Attestation                    report on assessment of compliance with servicing criteria for                    asset-backed securities, LaSalle Bank National Association, as                    Trustee and                    Custodian                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 34(c)                                 | Attestation                    report on assessment of compliance with servicing criteria for                    asset-backed securities, Wells Fargo Bank, NA, as                    Custodian                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 34(d)                                 | Attestation                    report on assessment of compliance with servicing criteria for                    asset-backed securities, LandAmerica Tax and Flood Services,                    Inc., as                    servicing function participant                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 34(e)                                 | Attestation                    report on assessment of compliance with servicing criteria for                    asset-backed securities, Assurant, Inc., as servicing function                    participant                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 35(a)                                 | Servicer                    compliance statement, EMC Mortgage Corporation, as Master                    Servicer                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 35(b)                                 | Servicer                    compliance statement, LaSalle Bank National Association, as                    Trustee                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |

| (b)                  The exhibits required to be filed by Registrant pursuant to Item                  601 of                  Regulation S-K:                     |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  (31)                  Rule 13a-14(d)/15d-14(d) Certifications.                                                                                               |   |
|  (33)                  Reports on assessment of compliance with servicing criteria for                  asset-backed securities:                              |   |
|  1.                                                                                                                                                           | EMC                  Mortgage Corporation, as Master Servicer |   |
| 2.                                                                                                                                                                 | LaSalle                  Bank National Association, as Trustee and Custodian |   |
| 3.                                                                                                                                                                 | Wells                  Fargo Bank, NA, as Custodian |   |
| 4.                                                                                                                                                                 | LandAmerica                  Tax and Flood Services, Inc., as servicing function                  participant |   |
| 5.                                                                                                                                                                 | Assurant,                  Inc., as servicing function participant |   |
|  (34)                  Attestation reports on assessment of compliance with servicing                  criteria                  for asset-backed securities: |
| 1.                                                                                                                                                                 | EMC                  Mortgage Corporation, as Master Servicer |
| 2.                                                                                                                                                                 | LaSalle                  Bank National Association, as Trustee and Custodian |
| 3.                                                                                                                                                                 | Wells                  Fargo Bank, NA, as Custodian |
| 4.                                                                                                                                                                 | LandAmerica                  Tax and Flood Services, Inc., as servicing function                  participant |
| 5.                                                                                                                                                                 | Assurant,                  Inc., as servicing function participant |
| (35)                  Servicer Compliance Statements:                                                                                                              |
| 1.                                                                                                                                                                 | EMC                  Mortgage Corporation, as Master Servicer |
| 2.                                                                                                                                                                 | LaSalle                  Bank National Association, as Trustee |

----

**SIGNATURES**

|                                    | EMC                    Mortgage Corporation, as Master Servicer |
|-----------------------------------------|-----------------------------------------------------------------|
|                                    |                                                            |
|  March                    28, 2007 |  /s/                    John A. Vella                 |
|                                    | Name:                     John A. Vella                    |
|                                    | Title: President                    and CEO                |

----

**EXHIBIT      INDEX**

| **Exhibit                  Number** | **Description**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|-------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 1.1                                 | Terms                  Agreement, dated March 22, 2006, between Bear, Stearns & Co. Inc., as                  underwriter and Structured Asset Mortgage Investments II Inc.,                  as                  depositor, relating to the Underwriting Agreement, dated March                  22, 2006,                  between Bear, Stearns & Co. Inc., as underwriter and Structured Asset                  Mortgage Investments II Inc., as depositor. (As previously filed                  on Form                  8-K filed on April 14, 2006 and is hereby incorporated by reference                  into                  this report on Form 10-K) |
| 4.1                                 | Pooling                  and Servicing Agreement, dated as of March 1, 2006, among Structured                  Asset                  Mortgage Investments II Inc., as depositor, EMC Mortgage Corporation,                  as                  sponsor and master servicer and LaSalle Bank National Association,                  as                  trustee. (As previously filed on Form 8-K filed on April 14, 2006                  and is                  hereby incorporated by reference into this report on Form                  10-K)                                                                                                                        |
|  4.1                           | Amendment                  Number One to the Pooling and Servicing Agreement, dated as of                  March 1,                  2006, among Structured Asset Mortgage Investments II Inc., as depositor,                  EMC Mortgage Corporation, as sponsor and master servicer and LaSalle                  Bank                  National Association, as trustee. (As previously filed on Form                  8-K filed                  on October 16, 2006 and is hereby incorporated by reference into                  this                  report on Form 10-K)                                                                                          |
| 31                                  | Sarbanes-Oxley                  Certification                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 33(a)                               | Report                  on assessment of compliance with servicing criteria for asset-backed                  securities, EMC Mortgage Corporation, as Master                  Servicer                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 33(b)                               | Report                  on assessment of compliance with servicing criteria for asset-backed                  securities, LaSalle Bank National Association, as Trustee and                  Custodian                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 33(c)                               | Report                  on assessment of compliance with servicing criteria for asset-backed                  securities, Wells Fargo Bank, NA, as Custodian                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 33(d)                               | Report                  on assessment of compliance with servicing criteria for asset-backed                  securities, LandAmerica Tax and Flood Services, Inc., as servicing                  function participant                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 33(e)                               | Report                  on assessment of compliance with servicing criteria for asset-backed                  securities, Assurant, Inc., as servicing function                  participant                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 34(a)                               | Attestation                  report on assessment of compliance with servicing criteria for                  asset-backed securities, EMC Mortgage Corporation, as Master                  Servicer                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 34(b)                               | Attestation                  report on assessment of compliance with servicing criteria for                  asset-backed securities, LaSalle Bank National Association, as                  Trustee and                  Custodian                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 34(c)                               | Attestation                  report on assessment of compliance with servicing criteria for                  asset-backed securities, Wells Fargo Bank, NA, as                  Custodian                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 34(d)                               | Attestation                  report on assessment of compliance with servicing criteria for                  asset-backed securities, LandAmerica Tax and Flood Services, Inc.,                  as                  servicing function participant                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 34(e)                               | Attestation                  report on assessment of compliance with servicing criteria for                  asset-backed securities, Assurant, Inc., as servicing function                  participant                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 35(a)                               | Servicer                  compliance statement, EMC Mortgage Corporation, as Master                  Servicer                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 35(b)                               | Servicer                  compliance statement, LaSalle Bank National Association, as                  Trustee                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |

----