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|------------------------------------------------- | ------- | --------- | -------------- | ----- | -------------- |  | ----------------------- |  | --------------- |  | --------- |  |  |  | -------------- | 
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|                                                  |         |           |                |       |               
|Morgan Stanley ABS Capital I Inc. Series 2004-HE2
|                                                  |         |           |                |       |                |  |                         |  |                 |  |           |  |  |  |                | 
|2004 Annual Statement                            
|                                                  |         |           |                |       |                |  |                         |  |                 |  |           |  |  |  |                | 
|                                                  |         |           |                |       |                |  | DISTRIBUTION IN DOLLARS |  |                 |  |           |  | 
|                                                  |         |           |                |       |                |  |                         |  |                 |  |           |  |  |  | ENDING BALANCE | 
|PERIOD                                            |         | CLASS     |                | CUSIP |                |  | INTEREST                |  |                 |  | PRINCIPAL |  | 
|200405                                            | A-1     | 61744CCQ7 | $658,354.21    |       | $10,648,849.37 |  | $593,038,150.63         | 
|200406                                            | A-1     | 61744CCQ7 | $771,114.33    |       | $13,764,616.22 |  | $579,273,534.41         | 
|200407                                            | A-1     | 61744CCQ7 | $852,980.28    |       | $18,644,711.82 |  | $560,628,822.59         | 
|200408                                            | A-1     | 61744CCQ7 | $868,974.68    |       | $19,330,879.61 |  | $541,297,942.98         | 
|200409                                            | A-1     | 61744CCQ7 | $1,004,784.31  |       | $25,226,571.79 |  | $516,071,371.19         | 
|200410                                            | A-1     | 61744CCQ7 | $903,124.90    |       | $25,731,157.72 |  | $490,340,213.47         | 
|200411                                            | A-1     | 61744CCQ7 | $1,020,997.29  |       | $28,895,160.87 |  | $461,445,052.60         | 
|200412                                            | A-1     | 61744CCQ7 | $1,029,400.98  |       | $35,792,211.90 |  | $425,652,840.70         | 
|                                                  |         |           |                |       |                |  |                         |  |                 |  |           |  |  |  |                | 
|                                                  |         |           |                |       |                |  | $7,109,730.98           |  | $178,034,159.30 |  |           |  | 
|200405                                            | A-2     | 61744CCS3 | $20,857.49     |       | $0.00          |  | $18,632,000.00          | 
|200406                                            | A-2     | 61744CCS3 | $24,868.54     |       | $0.00          |  | $18,632,000.00          | 
|200407                                            | A-2     | 61744CCS3 | $28,077.39     |       | $0.00          |  | $18,632,000.00          | 
|200408                                            | A-2     | 61744CCS3 | $29,500.67     |       | $0.00          |  | $18,632,000.00          | 
|200409                                            | A-2     | 61744CCS3 | $35,268.82     |       | $0.00          |  | $18,632,000.00          | 
|200410                                            | A-2     | 61744CCS3 | $33,185.66     |       | $0.00          |  | $18,632,000.00          | 
|200411                                            | A-2     | 61744CCS3 | $39,458.44     |       | $0.00          |  | $18,632,000.00          | 
|200412                                            | A-2     | 61744CCS3 | $42,206.41     |       | $0.00          |  | $18,632,000.00          | 
|                                                  |         |           |                |       |                |  |                         |  |                 |  |           |  |  |  |                | 
|                                                  |         |           |                |       |                |  | $253,423.42             |  | $0.00           |  |           |  | 
|200405                                            | A-3     | 61744CCT1 | $359,775.00    |       | $14,796,507.66 |  | $390,203,492.34         | 
|200406                                            | A-3     | 61744CCT1 | $413,290.53    |       | $20,009,595.55 |  | $370,193,896.79         | 
|200407                                            | A-3     | 61744CCT1 | $455,852.65    |       | $28,487,599.17 |  | $341,706,297.62         | 
|200408                                            | A-3     | 61744CCT1 | $449,913.29    |       | $38,303,773.03 |  | $303,402,524.59         | 
|200409                                            | A-3     | 61744CCT1 | $485,317.62    |       | $34,316,645.79 |  | $269,085,878.80         | 
|200410                                            | A-3     | 61744CCT1 | $412,299.36    |       | $35,311,271.87 |  | $233,774,606.93         | 
|200411                                            | A-3     | 61744CCT1 | $428,586.78    |       | $36,279,558.98 |  | $197,495,047.95         | 
|200412                                            | A-3     | 61744CCT1 | $392,957.71    |       | $41,931,774.63 |  | $155,563,273.32         | 
|                                                  |         |           |                |       |                |  |                         |  |                 |  |           |  |  |  |                | 
|                                                  |         |           |                |       |                |  | $3,397,992.94           |  | $249,436,726.68 |  |           |  | 
|200405                                            | A-4     | 61744CCU8 | $461,505.03    |       | $0.00          |  | $437,676,000.00         | 
|200406                                            | A-4     | 61744CCU8 | $550,255.99    |       | $0.00          |  | $437,676,000.00         | 
|200407                                            | A-4     | 61744CCU8 | $625,633.53    |       | $0.00          |  | $437,676,000.00         | 
|200408                                            | A-4     | 61744CCU8 | $660,161.30    |       | $0.00          |  | $437,676,000.00         | 
|200409                                            | A-4     | 61744CCU8 | $792,375.93    |       | $0.00          |  | $437,676,000.00         | 
|200410                                            | A-4     | 61744CCU8 | $748,912.27    |       | $0.00          |  | $437,676,000.00         | 
|200411                                            | A-4     | 61744CCU8 | $891,886.43    |       | $0.00          |  | $437,676,000.00         | 
|200412                                            | A-4     | 61744CCU8 | $957,532.11    |       | $0.00          |  | $437,676,000.00         | 
|                                                  |         |           |                |       |                |  |                         |  |                 |  |           |  |  |  |                | 
|                                                  |         |           |                |       |                |  | $5,688,262.59           |  | $0.00           |  |           |  | 
|200405                                            | B-1     | 61744CCY0 | $41,530.99     |       | $0.00          |  | $20,177,000.00          | 
|200406                                            | B-1     | 61744CCY0 | $49,517.72     |       | $0.00          |  | $20,177,000.00          | 
|200407                                            | B-1     | 61744CCY0 | $52,992.65     |       | $0.00          |  | $20,177,000.00          | 
|200408                                            | B-1     | 61744CCY0 | $53,805.33     |       | $0.00          |  | $20,177,000.00          | 
|200409                                            | B-1     | 61744CCY0 | $62,237.64     |       | $0.00          |  | $20,177,000.00          | 
|200410                                            | B-1     | 61744CCY0 | $56,338.67     |       | $0.00          |  | $20,177,000.00          | 
|200411                                            | B-1     | 61744CCY0 | $66,046.05     |       | $0.00          |  | $20,177,000.00          | 
|200412                                            | B-1     | 61744CCY0 | $68,293.28     |       | $0.00          |  | $20,177,000.00          | 
|                                                  |         |           |                |       |                |  |                         |  |                 |  |           |  |  |  |                | 
|                                                  |         |           |                |       |                |  | $450,762.33             |  | $0.00           |  |           |  | 
|200405                                            | B-2     | 61744CCZ7 | $30,409.17     |       | $0.00          |  | $14,035,000.00          | 
|200406                                            | B-2     | 61744CCZ7 | $36,257.08     |       | $0.00          |  | $14,035,000.00          | 
|200407                                            | B-2     | 61744CCZ7 | $38,674.22     |       | $0.00          |  | $14,035,000.00          | 
|200408                                            | B-2     | 61744CCZ7 | $39,181.04     |       | $0.00          |  | $14,035,000.00          | 
|200409                                            | B-2     | 61744CCZ7 | $45,221.94     |       | $0.00          |  | $14,035,000.00          | 
|200410                                            | B-2     | 61744CCZ7 | $40,826.26     |       | $0.00          |  | $14,035,000.00          | 
|200411                                            | B-2     | 61744CCZ7 | $47,812.57     |       | $0.00          |  | $14,035,000.00          | 
|200412                                            | B-2     | 61744CCZ7 | $49,317.25     |       | $0.00          |  | $14,035,000.00          | 
|                                                  |         |           |                |       |                |  |                         |  |                 |  |           |  |  |  |                | 
|                                                  |         |           |                |       |                |  | $327,699.53             |  | $0.00           |  |           |  | 
|200405                                            | B-3     | 61744CDA1 | $52,457.89     |       | $0.00          |  | $15,790,000.00          | 
|200406                                            | B-3     | 61744CDA1 | $62,545.94     |       | $0.00          |  | $15,790,000.00          | 
|200407                                            | B-3     | 61744CDA1 | $65,265.33     |       | $0.00          |  | $15,790,000.00          | 
|200408                                            | B-3     | 61744CDA1 | $65,133.75     |       | $0.00          |  | $15,790,000.00          | 
|200409                                            | B-3     | 61744CDA1 | $74,035.36     |       | $0.00          |  | $15,790,000.00          | 
|200410                                            | B-3     | 61744CDA1 | $65,581.13     |       | $0.00          |  | $15,790,000.00          | 
|200411                                            | B-3     | 61744CDA1 | $76,248.16     |       | $0.00          |  | $15,790,000.00          | 
|200412                                            | B-3     | 61744CDA1 | $77,239.21     |       | $0.00          |  | $15,790,000.00          | 
|                                                  |         |           |                |       |                |  |                         |  |                 |  |           |  |  |  |                | 
|                                                  |         |           |                |       |                |  | $538,506.77             |  | $0.00           |  |           |  | 
|200405                                            | M-1     | 61744CCV6 | $148,127.33    |       | $0.00          |  | $122,814,000.00         | 
|200406                                            | M-1     | 61744CCV6 | $176,613.36    |       | $0.00          |  | $122,814,000.00         | 
|200407                                            | M-1     | 61744CCV6 | $197,764.66    |       | $0.00          |  | $122,814,000.00         | 
|200408                                            | M-1     | 61744CCV6 | $206,736.90    |       | $0.00          |  | $122,814,000.00         | 
|200409                                            | M-1     | 61744CCV6 | $245,986.21    |       | $0.00          |  | $122,814,000.00         | 
|200410                                            | M-1     | 61744CCV6 | $230,208.02    |       | $0.00          |  | $122,814,000.00         | 
|200411                                            | M-1     | 61744CCV6 | $273,192.92    |       | $0.00          |  | $122,814,000.00         | 
|200412                                            | M-1     | 61744CCV6 | $290,897.00    |       | $0.00          |  | $122,814,000.00         | 
|                                                  |         |           |                |       |                |  |                         |  |                 |  |           |  |  |  |                | 
|                                                  |         |           |                |       |                |  | $1,769,526.40           |  | $0.00           |  |           |  | 
|200405                                            | M-2     | 61744CCW4 | $102,003.85    |       | $0.00          |  | $61,407,000.00          | 
|200406                                            | M-2     | 61744CCW4 | $121,619.98    |       | $0.00          |  | $61,407,000.00          | 
|200407                                            | M-2     | 61744CCW4 | $132,195.63    |       | $0.00          |  | $61,407,000.00          | 
|200408                                            | M-2     | 61744CCW4 | $135,607.13    |       | $0.00          |  | $61,407,000.00          | 
|200409                                            | M-2     | 61744CCW4 | $158,455.65    |       | $0.00          |  | $61,407,000.00          | 
|200410                                            | M-2     | 61744CCW4 | $145,193.44    |       | $0.00          |  | $61,407,000.00          | 
|200411                                            | M-2     | 61744CCW4 | $170,984.38    |       | $0.00          |  | $61,407,000.00          | 
|200412                                            | M-2     | 61744CCW4 | $178,761.80    |       | $0.00          |  | $61,407,000.00          | 
|                                                  |         |           |                |       |                |  |                         |  |                 |  |           |  |  |  |                | 
|                                                  |         |           |                |       |                |  | $1,144,821.86           |  | $0.00           |  |           |  | 
|200405                                            | M-3     | 61744CCX2 | $37,159.31     |       | $0.00          |  | $20,177,000.00          | 
|200406                                            | M-3     | 61744CCX2 | $44,305.33     |       | $0.00          |  | $20,177,000.00          | 
|200407                                            | M-3     | 61744CCX2 | $47,780.26     |       | $0.00          |  | $20,177,000.00          | 
|200408                                            | M-3     | 61744CCX2 | $48,761.08     |       | $0.00          |  | $20,177,000.00          | 
|200409                                            | M-3     | 61744CCX2 | $56,688.96     |       | $0.00          |  | $20,177,000.00          | 
|200410                                            | M-3     | 61744CCX2 | $51,630.70     |       | $0.00          |  | $20,177,000.00          | 
|200411                                            | M-3     | 61744CCX2 | $60,665.51     |       | $0.00          |  | $20,177,000.00          | 
|200412                                            | M-3     | 61744CCX2 | $63,080.89     |       | $0.00          |  | $20,177,000.00          | 
|                                                  |         |           |                |       |                |  |                         |  |                 |  |           |  |  |  |                | 
|                                                  |         |           |                |       |                |  | $410,072.04             |  | $0.00           |  |           |  | 
|200405                                            | P       | MS04H2102 | $477,094.10    |       | $0.00          |  | $0.00                   | 
|200406                                            | P       | MS04H2102 | $708,668.27    |       | $0.00          |  | $0.00                   | 
|200407                                            | P       | MS04H2102 | $811,991.94    |       | $0.00          |  | $0.00                   | 
|200408                                            | P       | MS04H2102 | $1,193,054.89  |       | $0.00          |  | $0.00                   | 
|200409                                            | P       | MS04H2102 | $1,316,582.53  |       | $0.00          |  | $0.00                   | 
|200410                                            | P       | MS04H2102 | $1,382,358.95  |       | $0.00          |  | $0.00                   | 
|200411                                            | P       | MS04H2102 | $644,752.13    |       | $0.00          |  | $0.00                   | 
|200412                                            | P       | MS04H2102 | $1,594,165.30  |       | $0.00          |  | $0.00                   | 
|                                                  |         |           |                |       |                |  |                         |  |                 |  |           |  |  |  |                | 
|                                                  |         |           |                |       |                |  | $8,128,668.11           |  | $0.00           |  |           |  | 
|200405                                            | R       | MS04H2103 | $0.00          |       | $0.00          |  | $0.00                   | 
|200406                                            | R       | MS04H2103 | $0.00          |       | $0.00          |  | $0.00                   | 
|200407                                            | R       | MS04H2103 | $0.00          |       | $0.00          |  | $0.00                   | 
|200408                                            | R       | MS04H2103 | $0.00          |       | $0.00          |  | $0.00                   | 
|200409                                            | R       | MS04H2103 | $0.00          |       | $0.00          |  | $0.00                   | 
|200410                                            | R       | MS04H2103 | $0.00          |       | $0.00          |  | $0.00                   | 
|200411                                            | R       | MS04H2103 | $0.00          |       | $0.00          |  | $0.00                   | 
|200412                                            | R       | MS04H2103 | $0.00          |       | $0.00          |  | $0.00                   | 
|                                                  |         |           |                |       |                |  |                         |  |                 |  |           |  |  |  |                | 
|                                                  |         |           |                |       |                |  | $0.00                   |  | $0.00           |  |           |  | 
|200405                                            | REMIC I | MS04H2201 | $10,388,839.63 |       | $25,446,322.19 |  | $1,729,039,356.54       | 
|200406                                            | REMIC I | MS04H2201 | $10,479,273.29 |       | $33,774,211.77 |  | $1,695,265,144.77       | 
|200407                                            | REMIC I | MS04H2201 | $10,389,152.37 |       | $47,132,311.00 |  | $1,648,132,833.77       | 
|200408                                            | REMIC I | MS04H2201 | $10,495,082.87 |       | $57,634,652.64 |  | $1,590,498,181.13       | 
|200409                                            | REMIC I | MS04H2201 | $10,292,541.92 |       | $59,543,217.58 |  | $1,530,954,963.55       | 
|200410                                            | REMIC I | MS04H2201 | $10,016,724.25 |       | $61,042,429.59 |  | $1,469,912,533.96       | 
|200411                                            | REMIC I | MS04H2201 | $8,914,679.46  |       | $65,174,719.85 |  | $1,404,737,814.11       | 
|200412                                            | REMIC I | MS04H2201 | $9,015,246.19  |       | $77,723,986.53 |  | $1,327,013,827.58       | 
|                                                  |         |           |                |       |                |  |                         |  |                 |  |           |  |  |  |                | 
|                                                  |         |           |                |       |                |  | $79,991,539.98          |  | $427,471,851.15 |  |           |  | 
|200405                                            | X       | MS04H2101 | $7,999,565.26  |       | $965.16        |  | $35,089,713.63          | 
|200406                                            | X       | MS04H2101 | $7,520,216.22  |       | $0.00          |  | $35,089,713.63          | 
|200407                                            | X       | MS04H2101 | $7,079,943.83  |       | $0.01          |  | $35,089,713.62          | 
|200408                                            | X       | MS04H2101 | $6,744,252.81  |       | $0.00          |  | $35,089,713.62          | 
|200409                                            | X       | MS04H2101 | $6,015,586.95  |       | $0.00          |  | $35,089,713.62          | 
|200410                                            | X       | MS04H2101 | $5,947,064.89  |       | $0.00          |  | $35,089,713.62          | 
|200411                                            | X       | MS04H2101 | $5,194,048.80  |       | $0.00          |  | $35,089,713.62          | 
|200412                                            | X       | MS04H2101 | $4,271,394.25  |       | $0.00          |  | $35,089,713.62          | 
|                                                  |         |           |                |       |                |  |                         |  |                 |  |           |  |  |  |                | 
|                                                  |         |           |                |       |                |  | $50,772,073.01          |  | $965.17         |  |           |  | 
|                                                  |         |           |                |       |                |  | $159,983,079.96         |  | $854,943,702.30 |  |           |  |