UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                  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, 2007

      OR


  / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934
      For the transition period from ____________ to ____________



      Commission file number: 333-130694-24

      Morgan Stanley Home Equity Loan Trust 2007-2
      (exact name of issuing entity as specified in its charter)

      Morgan Stanley ABS Capital I Inc.
      (exact name of the depositor as specified in its charter)

      Morgan Stanley Mortgage Capital Holdings LLC, successor-in-interest by
      merger to Morgan Stanley Mortgage Capital Inc.
      (exact name of the sponsor as specified in its charter)



  New York                                54-2199210
  (State or other jurisdiction of         54-2199211
  incorporation or organization of        54-2199212
  issuing entity)                         54-2199213
                                          54-2199214
                                          54-6760641
                                          (I.R.S. Employer
                                          Identification No. of
                                          issuing entity)


   c/o Wells Fargo Bank, N.A.
   9062 Old Annapolis Road
   Columbia, MD                                 21045
   (Address of principal executive              (Zip Code of issuing
   offices of issuing entity)                   entity)


 Issuing entity's telephone number, including area code: (410) 884-2000




  Securities registered pursuant to Section 12(b) of the Act:

    NONE.



  Securities registered pursuant to Section 12(g) of the Act:

    NONE.



  Indicate by check mark if the registrant is a well-known seasoned issuer, as
  defined in Rule 405 of the Securities Act.

    Yes ___     No  X



  Indicate by check mark if the registrant is not required to file reports
  pursuant to Section 13 or Section 15(d) of the Act.

    Yes ___     No  X



  Indicate by check mark whether the registrant (1) has filed all reports
  required to be filed by Section 13 or 15(d) of the Securities Exchange Act
  of 1934 during the preceding 12 months (or for such shorter period that the
  registrant was required to file such reports), and (2) has been subject to
  such filing requirements for the past 90 days.

    Yes  X      No ___



  Indicate by check mark if disclosure of delinquent filers pursuant to Item
  405 of Regulation S-K (Section 229.405 of this chapter) is not contained
  herein, and will not be contained, to the best of registrant's knowledge, in
  definitive proxy or information statements incorporated by reference in Part
  III of this Form 10-K or any amendment to this Form 10-K.

    Not applicable.



  Indicate by check mark whether the registrant is a large accelerated filer,
  an accelerated filer, a non-accelerated filer, or a smaller reporting
  company.  See the definitions of "large accelerated filer", "accelerated
  filer" and "smaller reporting company" in Rule 12b-2 of the Act.

   Large accelerated filer ___
   Accelerated filer ___
   Non-accelerated filer X (Do not check if a smaller reporting company)
   Smaller reporting company ___

  Indicate by check mark whether the registrant is a shell company (as defined
  in Rule 12b-2 of the Act).

    Yes ___     No  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.



  DOCUMENTS INCORPORATED BY REFERENCE

    See Item 15(a).





                                     PART I

  Item 1.      Business.

               Not applicable.


  Item 1A.     Risk Factors.

               Not applicable.


  Item 1B.     Unresolved Staff Comments.

               None.


  Item 2.      Properties.

               Not applicable.


  Item 3.      Legal Proceedings.

               Not applicable.


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

               Not applicable.




                                     PART II

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

               Not applicable.


  Item 6.      Selected Financial Data.

               Not applicable.


  Item 7.      Management's Discussion and Analysis of Financial Condition and
               Results of Operation.

               Not applicable.


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

               Not applicable.


  Item 8.      Financial Statements and Supplementary Data.

               Not applicable.


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

               Not applicable.


  Item 9A.     Controls and Procedures.

               Not applicable.


  Item 9A(T).  Controls and Procedures.

               Not applicable.


  Item 9B.     Other Information.

               None.




                                    PART III

  Item 10.     Directors, Executive Officers and Corporate Governance.

               Not applicable.


  Item 11.     Executive Compensation.

               Not applicable.


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

               Not applicable.


  Item 13.     Certain Relationships and Related Transactions, and Director
               Independence.

               Not applicable.


  Item 14.     Principal Accounting Fees and Services.

               Not applicable.




                    ADDITIONAL DISCLOSURE ITEMS FOR REGULATION AB


Item 1112(b) of Regulation AB, Significant Obligor Financial Information.

No single obligor represents 10% or more of the pool assets held by the issuing
entity.



Item 1114(b)(2) of Regulation AB, Significant Enhancement Provider Financial
Information.

No entity or group of affiliated entities provides any external credit
enhancement or other support for the certificates within this transaction as
described under Item 1114 (a) of Regulation AB.



Item 1115(b) of Regulation AB, Certain Derivatives Instruments (Financial
Information).

Morgan Stanley Capital Services Inc. provides an interest rate cap agreement
and an interest rate swap agreement for the issuing entity. No additional
disclosure is necessary because the aggregate significance percentage for
the interest rate cap agreement and the interest rate swap agreement is less
than 10%



Item 1117 of Regulation AB, Legal Proceedings.

Legal Proceedings Regarding First NLC Financial Services, LLC

Pursuant to a Form 8-K filed on January 18, 2008 by Friedman, Billings,
Ramsey Group, Inc. ("FBR") (Commission File No. 000-50230; CIK No.
0001209028), the parent of First NLC Financial Services, LLC ("FNLC"), one
of the original loan sellers, FBR stated on January 11, 2008 FNLC filed a
voluntary petition for bankruptcy protection under Chapter 11 of the United
States Bankruptcy Code in the United States Bankruptcy Court for the
Southern District of Florida, West Palm Beach Division.

Legal Proceedings Regarding Accredited Home Lenders, Inc.

As disclosed in a 424(b)(5) filed on April 2, 2007, Accredited Home Lenders Inc.
("Accredited") stated that in December 2002, Accredited was served with a
complaint and motion for class certification in a class action lawsuit,
Wratchford et al. v. Accredited Home Lenders, Inc., brought in Madison County,
Illinois under the Illinois Consumer Fraud and Deceptive Business Practices Act,
the consumer protection statutes of the other states in which Accredited does
business and the common law of unjust enrichment. The complaint alleges that
Accredited has a practice of misrepresenting and inflating the amount of fees it
pays to third parties in connection with the residential mortgage loans that it
funds. The plaintiffs claim to represent a nationwide class consisting of others
similarly situated, that is, those who paid Accredited to pay, or reimburse
Accredited's payments of, third-party fees in connection with residential
mortgage loans and never received a refund for the difference between what they
paid and what was actually paid to the third party. The plaintiffs are seeking
to recover damages on behalf of themselves and the class, in addition to
pre-judgment interest, post-judgment interest, and any other relief the court
may grant. On January 28, 2005, the court issued an order conditionally
certifying (1) a class of Illinois residents with respect to the alleged
violation of the Illinois Consumer Fraud and Deceptive Business Practices Act
who, since November 19, 1997, paid money to Accredited for third-party fees in
connection with residential mortgage loans and never received a refund of the
difference between the amount they paid to Accredited and the amount Accredited
paid to the third party and (2) a nationwide class of claimants with respect to
an unjust enrichment cause of action included in the original complaint who,
since November 19, 1997 paid money to Accredited for third-party fees in
connection with residential mortgage loans and never received a refund of the
difference between the amount they paid Accredited and the amount Accredited
paid the third party. The court conditioned its order limiting the statutory
consumer fraud act claims to claimants in the State of Illinois on the outcome
of a case pending before the Illinois Supreme Court in which one of the issues
is the propriety of certifying a nationwide class based on the Illinois Consumer
Fraud and Deceptive Business Practices Act. That case has now been decided in a
manner favorable to Accredited's position, and, in light of this ruling,
Accredited intends to petition the Illinois Supreme Court for a supervisory
order reversing the lower court's class certification decision, the lower court
having denied Accredited's motion for reconsideration of (a) the court's order
granting class certification and (b) the court's denial of Accredited's request
for leave to take an interlocutory appeal of such order. There has not yet been
a ruling on the merits of either the plaintiffs' individual claims or the claims
of the class, and Accredited intends to continue to vigorously defend this
matter. The ultimate outcome of this matter and the amount of liability, if any,
that may result is not presently determinable, but Accredited does not believe
it will have a material adverse effect on its business.

In January 2004, Accredited was served with a complaint, Yturralde v. Accredited
Home Lenders, Inc., brought in Sacramento County, California. The named
plaintiff is a former commissioned loan officer of Accredited, and the complaint
alleges that Accredited violated California and federal law by misclassifying
the plaintiff and other non-exempt employees as exempt employees, failing to pay
the plaintiff on an hourly basis and for overtime worked, and failing to
properly and accurately record and maintain payroll information. The plaintiff
seeks to recover, on behalf of himself and all of our other similarly situated
current and former employees, lost wages and benefits, general damages, multiple
statutory penalties and interest, attorneys' fees and costs of suit, and also
seeks to enjoin further violations of wage and overtime laws and retaliation
against employees who complain about such violations. Accredited has been served
with eleven substantially similar complaints on behalf of certain other former
and current employees, which have been consolidated with the Yturralde action.
Subject to court approval, the parties have agreed to a settlement with respect
to the named plaintiffs and with respect to a class of current and former
Accredited employees which the parties will jointly request the court to
certify. The amount payable by Accredited under the settlement is not material
to Accredited's financial condition.

In September 2005, Accredited and Accredited Home Lenders Holding Company
("AHLHC") were served with a class action complaint, Phillips v. Accredited Home
Lenders Holding Company, et al., brought in the United States District Court,
Central District of California. The complaint alleges violations of the Fair
Credit Reporting Act in connection with prescreened offers of credit made by
Accredited. The plaintiff seeks to recover, on behalf of herself and similarly
situated individuals, damages, pre-judgment interest, declaratory and injunctive
relief, attorneys' fees, and any other relief the court may grant. On January 4,
2006, plaintiff re-filed the action in response to the court's December 9, 2005,
decision granting Accredited's and AHLHC's motion to (1) dismiss with prejudice
plaintiff's claim that Accredited's offer of credit failed to include the clear
and conspicuous disclosures required by FCRA, (2) strike plaintiff's request for
declaratory and injunctive relief, and (3) sever plaintiff's claims as to
Accredited and AHLHC from those made against other defendants unaffiliated with
Accredited or AHLHC. Plaintiff's remaining claim is that Accredited's offer of
credit did not meet FCRA's "firm offer" requirement. A motion to certify a class
has not yet been filed, there has been no ruling on the merits of either the
plaintiff's individual claims or the claims of the putative class, and
Accredited and AHLHC intend to continue to vigorously defend this matter. The
ultimate outcome of this matter and the amount of liability, if any, which may
result is not presently determinable. If, however, a class were to be certified
and were to prevail on the merits, the potential liability could have a material
adverse effect on Accredited.

In March 2006, Accredited was served with a class action complaint, Cabrejas v.
Accredited Home Lenders, Inc., brought in the Circuit Court for Prince George's
County, Maryland. The complaint alleges that Accredited's origination of second
lien loans in Maryland violated the Maryland Secondary Mortgage Loan Law (the
"SMLL") and Consumer Protection Act in that fees charged on such loans exceeded
10% of the respective loan amounts. The plaintiffs seek to recover, on behalf of
themselves and similarly situated individuals, damages, disgorgement of fees,
pre-judgment interest, declaratory and injunctive relief, attorneys' fees, and
any other relief the court may grant. On April 13, 2006, Accredited removed the
action to the United States District Court, District of Maryland. On May 15,
2006, Accredited filed a motion to dismiss plaintiffs' second cause of action
alleging a violation of the Maryland Consumer Protection Act on the basis that
full disclosure of the fees cannot be an unfair or deceptive trade practice,
which motion was granted on December 4, 2006. On January 3, 2007, plaintiffs
filed a Second Amended Complaint, alleging that Accredited's origination in
Maryland of second lien loans with balloon payments was also a violation of the
SMLL. On January 16, 2007, Accredited filed a motion to dismiss this new claim
on the basis that the SMLL's prohibition of balloon payments was and is
preempted by the federal Alternative Mortgage Transactions Parity Act. The court
has not yet ruled on this motion. A motion to certify a class has not yet been
filed, there has been no ruling on the merits of either the plaintiff's
remaining individual claims or the remaining claims of the putative class, and
Accredited intends to continue to vigorously defend this matter. The ultimate
outcome of this matter and the amount of liability, if any, which may result is
not presently determinable, but Accredited does not believe it will have a
material adverse effect on its business.

In October 2006, by virtue of the merger of AHLHC and Aames Investment
Corporation ("AIC"), and the related merger of certain subsidiaries of AHLHC and
AIC, AHLHC and certain of its subsidiaries succeeded to the litigation interests
of AIC and certain of its subsidiaries. Two of those matters, Webb, et al., v.
Aames Investment Corporation, et al. (U.S. District Court, Central District of
California) and Cooper, et al., v. Aames Funding Corporation (U.S. District
Court, Eastern District of Wisconsin), are class action complaints which allege
violations of the Fair Credit Reporting Act in connection with prescreened
offers of credit and are similar in nature to the Phillips matter referenced
above. The Cooper matter was transferred to the Central District of California
and consolidated with the Webb matter by stipulation of counsel on September 29,
2006. A motion to certify a class has not yet been filed, there has been no
ruling on the merits of either the plaintiffs' individual claims or the claims
of the putative class, and AHLHC and each affected subsidiary intend to continue
to vigorously defend this matter. The ultimate outcome of this matter and the
amount of liability, if any, which may result is not presently determinable. If,
however, a class were to be certified and were to prevail on the merits, the
potential liability could have a material adverse effect on Accredited.

In October 2006, as a result of the merger referenced above, Accredited
succeeded to the position of Aames Funding Corporation ("AFC") under a class
action complaint, Miller v. Aames Funding Corporation, filed in the United
States District Court, Eastern District of Texas. The complaint alleges that
adjustable-rate home equity loans originated by AFC in Texas violate the Texas
Constitution's requirement that such loans be scheduled to be repaid in
substantially equal installments. The plaintiffs seek to recover, on behalf of
themselves and similarly situated individuals, damages, declaratory and
injunctive relief, attorneys' fees, and any other relief the court may grant. On
September 29, 2006, the court on its own motion stayed the action, pending the
resolution of class certification issues in a similar action pending before the
court. A motion to certify a class has not yet been filed, there has been no
ruling on the merits of either the plaintiff's individual claims or the claims
of the putative class, and Accredited intends to continue to vigorously defend
this matter. The ultimate outcome of this matter and the amount of liability, if
any, which may result is not presently determinable. If, however, a class were
to be certified and were to prevail on the merits, the potential liability could
have a material adverse effect on Accredited.

In February 2007, Accredited acknowledged service of a class action complaint,
Sierra v. Aames Home Loan, brought in the Superior Court for Los Angeles County,
California. As a result of the merger referenced above, Accredited has succeeded
to the interest of Aames Home Loan (a trade name of AFC) in this lawsuit. The
named plaintiff is a former commissioned loan officer of AFC, and the complaint
alleges that AFC violated state law by requiring the plaintiff to work overtime
without compensation. The plaintiff seeks to recover, on behalf of himself and
other similarly situated employees, the allegedly unpaid overtime, general
damages, multiple statutory penalties and interest, attorneys' fees and costs of
suit. A motion to certify a class has not yet been filed, there has been no
ruling on the merits of either the plaintiffs' individual claims or the claims
of the putative class, and Accredited intends to vigorously defend this matter.
The ultimate outcome of this matter and the amount of liability, if any, which
may result is not presently determinable, but Accredited does not believe it
will have a material adverse effect on its business.

In March 2007, Accredited was served with a class action complaint, Edwards v.
Accredited Home Lenders, Inc., et al., brought in the United States District
Court for the Southern District of Alabama. The complaint alleges violations of
the federal Truth in Lending Act for allegedly failing to disclose title
insurance charges and recording fees as part of finance charges. A motion to
certify a class has not yet been filed, there has been no ruling on the merits
of either the plaintiff's individual claims or the claims of the putative class,
and Accredited intends to vigorously defend this action. The ultimate outcome of
this matter and the amount of liability, if any, which may result is not
presently determinable, but Accredited does not believe it will have a material
adverse effect on its business.

In March 2007, a class action complaint, Atlas v. Accredited Home Lenders
Holding Co., et al., was filed in the United States District Court for the
Southern District of California. The complaint alleges violations of federal
securities laws. AHLHC is aware that one or more similar securities class
actions have also recently been filed against it, but AHLHC has not yet been
served the Atlas complaint or any of the other actions. AHLHC intends to
vigorously defend Atlas and the similar actions when and if they are served. The
ultimate outcome of these matters and the amount of liability, if any, which may
result, is not presently determinable, but AHLHC does not believe these actions
will have a material adverse effect on its business.

Accredited has accrued for loss contingencies with respect to the foregoing
matters to the extent it is probable that a liability has been occurred at the
date of the consolidated financial statements and the amount of the loss can be
reasonably estimated. Management does not deem the amount of such accrual to be
material.

In addition, because the nature of our business involves the collection of
numerous accounts, the validity of liens and compliance with various state and
federal lending laws, we are subject to various legal proceedings in the
ordinary course of business related to foreclosures, bankruptcies, condemnation
and quiet title actions, and alleged statutory and regulatory violations. We are
also subject to legal proceedings in the ordinary course of business related to
employment matters. We do not believe that the resolution of these lawsuits will
have a material adverse effect on our financial position or results of
operations.

Legal Proceedings Regarding Countrywide Financial Corporation

Pursuant to a Form 10-K filed by Countrywide Financial Corporation ("the
Company") on February 29, 2008 (Commission File No. 001-8422; CIK No.
0000025191), the parent of Countrywide Home Loan Servicing LP, one of the
servicers, the Company stated that various lawsuits alleging claims for
derivative relief on behalf of the Company and securities, retirement plan, and
other class action suits have recently been brought against us and certain
current and former officers, directors and retirement plan administrators in
either federal district court in Los Angeles, California, or state superior
court in Los Angeles, or state court in Delaware. The Company stated that among
other things, these lawsuits allege breach of state law fiduciary duties and
violation of the federal securities laws and the Employee Retirement Income
Security Act of 1974 ("ERISA"). The Company stated that these cases allege,
among other things, that the Company did not disclose complete and accurate
information about mortgage lending practices and financial condition. The
Company stated that shareholder derivative cases brought in federal court are
brought on the Company's behalf and do not seek recovery of damages from the
Company.

The Company stated that two consolidated cases alleging claims for derivative
relief on behalf of the Company are also pending in federal district court in
Delaware, and allege, among other things, that certain of the Company's proxy
filings contain incorrect statements relating to the compensation of the Chief
Executive Officer.

The Company stated that various class action lawsuits relating to the proposed
merger with Bank of America have been filed in the state courts of California
and Delaware on behalf of a proposed class of shareholders against the Company,
the Company's directors and Bank of America. The Company stated that the class
action lawsuits filed in state court in California have been removed to federal
court in Los Angeles and that these lawsuits allege that the Company's directors
breached their fiduciary duties to the Company's shareholders by entering into
the merger agreement with Bank of America and that Bank of America allegedly
aided and abetted those alleged breaches. The Company stated that, similarly,
the plaintiffs in the shareholder derivative lawsuits brought in California
state and federal court recently have amended their complaints to add similar
class action allegations relating to the proposed merger with Bank of America.

The Company stated that it is difficult to predict the resulting outcome of
these proceedings, particularly where investigations and proceedings are in
early stages. The Company stated that given the inherent difficulty in
predicting the outcome of legal proceedings, the Company cannot estimate losses
or ranges of losses for legal proceedings where there is only a reasonable
possibility that a loss may be incurred, such as those discussed in the two
immediately preceding paragraphs. The Company stated that it provides for
potential losses that may arise out of legal proceedings to the extent such
losses are deemed probable and can be estimated. The Company stated that
although the ultimate outcome of the legal proceedings discussed above cannot be
ascertained at this time, the Company believes that any resulting liability will
not materially affect the consolidated financial position; such resolution,
however, could be material to operating results for a particular future period
depending upon the outcome of the proceedings and the operating results for a
particular period. The Company stated that its assessment is based, in part, on
the existence of insurance coverage.

Legal Proceedings Regarding Morgan Stanley Mortgage Capital Holdings LLC

In addition to the matters described below, in the normal course of
business, Morgan Stanley Mortgage Capital Holdings LLC ("the Company") has
been named, from time to time, as a defendant in various legal actions.
Certain of the actual or threatened legal actions include claims for
substantial compensatory and/or punitive damages or claims for indeterminate
amounts of damages.

Regulatory and Governmental Investigations: The Company and its affiliates
are currently responding to subpoenas and requests for information from
certain regulatory and governmental entities concerning the origination,
purchase, securitization and/or servicing of subprime and non-subprime
residential mortgages and related issues.

Civil Litigation re American Business Financial Services, Inc. The Company
has been named as one of a number of defendants in a matter styled Miller v.
Santilli, et al., which is pending in the Court of Common Pleas for
Philadelphia County, Pennsylvania. The complaint in this action was filed on
July 13, 2006 and is being brought by the bankruptcy trustee for American
Business Financial Services, Inc. ("ABFS"). The complaint alleges, inter
alia, that the Company, certain of the Company's affiliates, and various
other financial institutions deepened the insolvency of ABFS, and aided and
abetted fraud and breaches of fiduciary duties committed by certain former
officers and directors of ABFS, by providing warehouse loans to ABFS and
participating in securitization transactions with ABFS. The complaint seeks
damages in excess of $750 million. The deepening insolvency claim has been
dismissed, and the case is currently in discovery.

Bauer, et al., v. Saxon Mortgage Services, Inc., et al. is a matter filed on
December 1, 2004 in the Civil District Court for the Parish of Orleans,
State of Louisiana, Case No. 2004-17015. On February 17, 2005, the
plaintiffs re-filed the case as two separate class action lawsuits, Bauer,
et al., v. Dean Morris, et al., filed as Case No. 05-2173 in the Civil
District Court for the Parish of Orleans, State of Louisiana, and Patterson,
et al., v. Dean Morris, et al., filed as Case No. 05-2174 in the Civil
District Court for the Parish of Orleans, State of Louisiana. On January 24,
2006, the United States District Court for the Eastern District of Louisiana
granted the Company's motion to compel arbitration in Bauer, et al., v. Dean
Morris, et al. On January 25, 2006, the United States District Court for the
Eastern District of Louisiana granted the Saxon Mortgage Services' motion to
compel arbitration in Patterson, et al., v. Dean Morris, et al. At the
present time, neither plaintiff has initiated arbitration.

Jumar Hooks and Diane Felder, et al., v. Saxon Mortgage, Inc. is a matter
filed on October 12, 2005 in the Common Pleas Court for Cuyahoga County,
Ohio as Case No. CV 05 574577. The plaintiffs filed this case as a class
action, on behalf of themselves and similarly situated Ohio borrowers,
alleging that the Company's subsidiary, Saxon Mortgage, Inc. ("Saxon
Mortgage") engaged in unlawful practices in originating and servicing the
plaintiffs' loans. During the second quarter of 2006, the court granted the
Saxon Mortgage's motion to compel individual arbitration as to each of the
two named plaintiffs and stayed the court proceedings with no class having
been certified.

Jones, et al., v. ABN AMRO Mortgage Group, et al. is a matter filed on
September 24, 2007 in the Court of Common Pleas for Berks County,
Pennsylvania as Civil Action-Law No. 07-10540. The plaintiffs allege that
the putative class members were not credited properly for payments made on
their mortgage loans which were allegedly collected by non-affiliated
intermediary entities and forwarded to the servicer defendants. Saxon
Mortgage Services services two loans for putative class members. Saxon
Mortgage Services and other defendants filed a consolidated motion to
dismiss the case.

Legal Proceedings Regarding Saxon Mortgage Services, Inc.

Because Saxon Mortgage Services, Inc. (the "Company") and its affiliates
are subject to many laws and regulations, including but not limited to
federal and state consumer protection laws, it is regularly involved in
numerous lawsuits filed against it, some of which seek certification as
class action lawsuits on behalf of similarly situated individuals.

The Company and/or its affiliates are also involved, from time to time, in
other reviews, investigations and proceedings (both formal and informal) by
governmental agencies regarding the Company's and/or its affiliates
businesses, certain of which may result in adverse judgments, settlements,
fines, penalties, injunctions or other relief.

The Company contests liability and/or the amount of damages as appropriate
in each pending matter. In view of the inherent difficulty of predicting the
outcome of such matters, particularly in cases where claimants seek
substantial or indeterminate damages or where investigations and proceedings
are in the early stages, the Company cannot predict with certainty the loss
or range of loss, if any, related to such matters, how or if such matters
will be resolved, when they will ultimately be resolved, or what the
eventual settlement, fine, penalty or other relief, if any, might be.
Subject to the foregoing, the following matters are potentially material to
the financial condition of the Company.

Regulatory and Governmental Investigations: The Company and its affiliates
are currently responding to subpoenas and requests for information from
certain regulatory and governmental entities concerning the origination,
purchase, and/or servicing of subprime and non-subprime residential
mortgages and related issues.

Bauer, et al., v. Saxon Mortgage Services, Inc., et al. is a matter filed on
December 1, 2004 in the Civil District Court for the Parish of Orleans,
State of Louisiana, Case No. 2004-17015. On January 26, 2005, the plaintiffs
filed a motion to dismiss the case without prejudice, and the court entered
an order dismissing the case on January 31, 2005. On February 17, 2005, the
plaintiffs re-filed the case as two separate class action lawsuits, Bauer,
et al., v. Dean Morris, et al., filed as Case No. 05-2173 in the Civil
District Court for the Parish of Orleans, State of Louisiana, and Patterson,
et al., v. Dean Morris, et al., filed as Case No. 05-2174 in the Civil
District Court for the Parish of Orleans, State of Louisiana. On January 24,
2006, the United States District Court for the Eastern District of Louisiana
granted the Company's motion to compel arbitration and stayed the court
proceedings as to named plaintiffs Keenan and Karen Duckworth in Bauer, et
al., v. Dean Morris, et al., filed as Case No. 05-2173 in the Civil District
Court for the Parish of Orleans, State of Louisiana. On January 25, 2006,
the United States District Court for the Eastern District of Louisiana
granted the Saxon Mortgage Services's motion to compel arbitration and
stayed the court proceedings as to named plaintiff Debra Herron in
Patterson, et al., v. Dean Morris, et al., filed as Case No. 05-2174 in the
Civil District Court for the Parish of Orleans, State of Louisiana. The
court subsequently remanded the underlying court proceedings in both the
Bauer and Patterson cases to the Civil District Court for the Parish of
Orleans, State of Louisiana. At the present time, neither plaintiff has
initiated arbitration.

Jones, et al., v. ABN AMRO Mortgage Group, et al. is a matter filed on
September 24, 2007 in the Court of Common Pleas for Berks County,
Pennsylvania as Civil Action-Law No. 07-10540. The matter was subsequently
removed to the United States District Court for the Eastern District of
Pennsylvania as Civil Action No. 2:07-cv-04328-JG. The plaintiffs filed an
Amended Complaint on October 9, 2007 naming the Company as a defendant. The
plaintiffs allege that the putative class members were not credited properly
for payments made on their mortgage loans which were allegedly collected by
non-affiliated intermediary entities and forwarded to the servicer
defendants. The Company services two loans for putative class members. The
plaintiffs subsequently voluntarily dismissed all named plaintiffs except
for the Jones's. Saxon Mortgage Services and other defendants filed a
consolidated motion to dismiss the case.

Jumar Hooks and Diane Felder, et al., v. Saxon Mortgage, Inc. is a matter
filed on October 12, 2005 in the Common Pleas Court for Cuyahoga County,
Ohio as Case No. CV 05 574577. The plaintiffs filed this case as a class
action, on behalf of themselves and similarly situated Ohio borrowers,
alleging that the Company's affiliate, Saxon Mortgage, Inc. ("Saxon
Mortgage") engaged in unlawful practices in originating and servicing the
plaintiffs' loans. During the second quarter of 2006, the court granted the
Saxon Mortgage's motion to compel individual arbitration as to each of the
two named plaintiffs and stayed the court proceedings with no class having
been certified.



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

The information regarding this Item has been previously filed in a 424(b)(5)
filed on April 2, 2007 (Commission File No. 333-130694-24).



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

The reports on assessment of compliance with the servicing criteria for
asset-backed securities and the related attestation reports on such assessments
of compliance are attached hereto under Item 15(a).



Item 1123 of Regulation AB, Servicer Compliance Statement.

The servicer compliance statements are attached hereto under Item 15(a).



                               Part IV

  Item 15. Exhibits, Financial Statement Schedules.

  (a) Exhibits.

  (1) Not applicable.

  (2) Not applicable.

  (3) Exhibits filed herewith.

  (4) Pooling and Servicing Agreement, dated as of March 1, 2007, by and
      among Morgan Stanley ABS Capital I Inc., as depositor, Countrywide Home
      Loans Servicing LP, as a servicer, Saxon Mortgage Services, Inc., as a
      servicer, Wells Fargo Bank, National Association, as master servicer,
      securities administrator and a servicer, First NLC Financial Services,
      LLC, as responsible party and Deutsche Bank National Trust Company, as
      trustee. (Filed as part of the Registrant's Current Report on Form 8-K
      filed on April 18, 2007 (Commission File No. 333-130694-24) and is
      incorporated by reference herein.)

  (31) Rule 13a-14(d)/15d-14(d) Certification.

  (33) Reports on assessment of compliance with servicing criteria for
       asset-backed securities.


    <TABLE>
    
      <c>

    33.1 Countrywide Home Loans Servicing LP as Servicer
    33.2 Deutsche Bank National Trust Company as Trustee
    33.3 First American Real Estate Solutions of Texas, L.P. as Sub-Contractor for Saxon Mortgage Services, Inc.
    33.4 FIS Tax Services f/k/a LSI Tax Services as Sub-Contractor for Saxon Mortgage Services, Inc.
    33.5 Saxon Mortgage Services, Inc. as Servicer
    33.6 Southwest Business Corporation as Sub-Contractor for Saxon Mortgage Services, Inc.
    33.7 Wells Fargo Bank, N.A. as Master Servicer and as Securities Administrator

    </TABLE>


  (34) Attestation reports on assessment of compliance with servicing
       criteria for asset-backed securities.


    <TABLE>
    
      <c>

    34.1 Countrywide Home Loans Servicing LP as Servicer
    34.2 Deutsche Bank National Trust Company as Trustee
    34.3 First American Real Estate Solutions of Texas, L.P. as Sub-Contractor for Saxon Mortgage Services, Inc.
    34.4 FIS Tax Services f/k/a LSI Tax Services as Sub-Contractor for Saxon Mortgage Services, Inc.
    34.5 Saxon Mortgage Services, Inc. as Servicer
    34.6 Southwest Business Corporation as Sub-Contractor for Saxon Mortgage Services, Inc.
    34.7 Wells Fargo Bank, N.A. as Master Servicer and as Securities Administrator

    </TABLE>


   (35) Servicer compliance statement.


    <TABLE>
    
       <c>

    35.1 Countrywide Home Loans Servicing LP as Servicer
    35.2 Saxon Mortgage Services, Inc. as Servicer
    35.3 Wells Fargo Bank, N.A. as Master Servicer and as Securities Administrator

    </TABLE>


   (b) See (a) above.

   (c) Not applicable.



                          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.


   Morgan Stanley Home Equity Loan Trust 2007-2
   (Issuing Entity)

   Wells Fargo Bank, N.A.
   (Master Servicer)

   /s/ Diane Courtney
   Diane Courtney, Vice President
   (senior officer in charge of the servicing function of the master
   servicer)


    Date:   March 26, 2008



  Exhibit Index

  Exhibit No.


   (4) Pooling and Servicing Agreement, dated as of March 1, 2007, by and
       among Morgan Stanley ABS Capital I Inc., as depositor, Countrywide Home
       Loans Servicing LP, as a servicer, Saxon Mortgage Services, Inc., as a
       servicer, Wells Fargo Bank, National Association, as master servicer,
       securities administrator and a servicer, First NLC Financial Services,
       LLC, as responsible party and Deutsche Bank National Trust Company, as
       trustee. (Filed as part of the Registrant's Current Report on Form 8-K
       filed on April 18, 2007 (Commission File No. 333-130694-24) and is
       incorporated by reference herein.)

   (31) Rule 13a-14(d)/15d-14(d) Certification.

   (33) Reports on assessment of compliance with servicing criteria for
        asset-backed securities.


    <TABLE>

    
      <c>
    33.1 Countrywide Home Loans Servicing LP as Servicer
    33.2 Deutsche Bank National Trust Company as Trustee
    33.3 First American Real Estate Solutions of Texas, L.P. as Sub-Contractor for Saxon Mortgage Services, Inc.
    33.4 FIS Tax Services f/k/a LSI Tax Services as Sub-Contractor for Saxon Mortgage Services, Inc.
    33.5 Saxon Mortgage Services, Inc. as Servicer
    33.6 Southwest Business Corporation as Sub-Contractor for Saxon Mortgage Services, Inc.
    33.7 Wells Fargo Bank, N.A. as Master Servicer and as Securities Administrator

    </TABLE>

   (34) Attestation reports on assessment of compliance with servicing
        criteria for asset-backed securities.


    <TABLE>

    
      <c>
    34.1 Countrywide Home Loans Servicing LP as Servicer
    34.2 Deutsche Bank National Trust Company as Trustee
    34.3 First American Real Estate Solutions of Texas, L.P. as Sub-Contractor for Saxon Mortgage Services, Inc.
    34.4 FIS Tax Services f/k/a LSI Tax Services as Sub-Contractor for Saxon Mortgage Services, Inc.
    34.5 Saxon Mortgage Services, Inc. as Servicer
    34.6 Southwest Business Corporation as Sub-Contractor for Saxon Mortgage Services, Inc.
    34.7 Wells Fargo Bank, N.A. as Master Servicer and as Securities Administrator

    </TABLE>

   (35) Servicer compliance statement.


    <TABLE>

    
       <c>
    35.1 Countrywide Home Loans Servicing LP as Servicer
    35.2 Saxon Mortgage Services, Inc. as Servicer
    35.3 Wells Fargo Bank, N.A. as Master Servicer and as Securities Administrator

    </TABLE>