Document:

ABSC 2003-HE3 PSA Amendment No. 2

EXHIBIT 4.3

AMENDMENT NO. 2

Dated as of June 30, 2006

to

POOLING AND SERVICING AGREEMENT

Dated as of June 1, 2003

among

ASSET BACKED SECURITIES CORPORATION

Depositor

DLJ MORTGAGE CAPITAL, INC.

Seller

OCWEN LOAN SERVICING, LLC.

Servicer

and

WELLS FARGO BANK, N.A.

Trustee

Asset Backed Securities Corporation Home Equity Loan Trust 2003-HE3,

Asset Backed Pass-Through Certificates, Series 2003-HE3

THIS AMENDMENT NO. 2, dated as of June 30, 2006 (the “Amendment”), to the Pooling and Servicing Agreement (the “Pooling and Servicing Agreement”), dated as of June 1, 2003, is among ASSET BACKED SECURITIES CORPORATION, a Delaware corporation, as depositor (the “Depositor”), DLJ MORTGAGE CAPITAL, INC., a Delaware corporation, as seller (the “Seller”), OCWEN LOAN SERVICING, LLC. (f/k/a OCWEN FEDERAL BANK FSB), a Delaware limited liability company, as the servicer (in such capacity, the “Servicer”), and WELLS FARGO BANK, N.A., a successor by merger to WELLS FARGO BANK MINNESOTA, N.A., a national banking association, as trustee (the “Trustee”).

W I T N E S S E T H

WHEREAS, the Depositor, the Seller, the Servicer and the Trustee entered into the Pooling and Servicing Agreement;

WHEREAS, Section 11.01 of the Pooling and Servicing Agreement permits amendments to the Pooling and Servicing Agreement time to time by the Depositor, the Seller, the Servicer and the Trustee, and if necessary, with the consent of the Counterparty (as described below), but without the consent of any of the Certificateholders, (i) to cure any ambiguity or defect, (ii) to correct, modify or supplement any provisions herein (including to give effect to the expectations of Certificateholders), (iii) to modify, eliminate or add to any of its provisions to such extent as shall be necessary or desirable to maintain the qualification of the Trust Fund as a REMIC at all times that any Certificate is outstanding or to avoid or minimize the risk of the imposition of any tax on the Trust Fund pursuant to the Code that would be a claim against the Trust Fund, provided that the Trustee, the Depositor, the Seller and the Servicer have received an Opinion of Counsel to the effect that (A) such action is necessary or desirable to maintain such qualification or to avoid or minimize the risk of the imposition of any such tax and (B) such action will not adversely affect the status of the Trust Fund as a REMIC or adversely affect in any material respect the interest of any Certificateholder, or (iv) to make any other provisions with respect to matters or questions arising under the Pooling and Servicing Agreement which shall not be inconsistent with the provisions of the Pooling and Servicing Agreement; provided that such action shall not, as evidenced by either (i) an Opinion of Counsel delivered to the Trustee, adversely affect in any material respect the interests of any Certificateholder or (ii) delivery to the Trustee of a letter from each Rating Agency confirming the then-current ratings of the Offered Certificates.  No amendment shall be deemed to adversely affect in any material respect the interests of any Certificateholder who shall have consented thereto, and no Opinion of Counsel shall be required to address the effect of any such amendment on any such consenting Certificateholder;

WHEREAS, this amendment gives effect to the expectations of the Certificateholders;

WHEREAS, the Depositor, the Seller and the Servicer desire to amend the Pooling and Servicing Agreement to amend the definition of “Trigger Event” as set forth in the Pooling and Servicing Agreement;

WHEREAS, the Trustee has received the a letter from each Rating Agency confirming that the ratings of the Offered Certificates will not be downgraded or withdrawn by this Amendment;

 WHEREAS, the Counterparty no longer remains Counterparty under the Yield Maintenance Agreement or is owed any amounts under the Pooling and Servicing Agreement and the consent of the Counterparty is no longer required for the adoption of any amendment to the Pooling and Servicing Agreement pursuant to Section 11.01 thereof;

NOW, THEREFORE, the parties hereto hereby agree as follows:

SECTION 1.  

DEFINED TERMS.

For purposes of this Amendment, unless the context clearly requires otherwise, all capitalized terms which are used but not otherwise defined herein shall have the respective meanings assigned to such terms in the Pooling and Servicing Agreement.

SECTION 2.  AMENDMENTS TO THE POOLING AND SERVICING AGREEMENT.

The definition of “Trigger Event” as set forth in Section 1.01 of the Pooling and Servicing Agreement is hereby amended and restated in its entirety as follows:

“Trigger Event”:  A Trigger Event has occurred with respect to any Distribution Date on or after the Stepdown Date if (i) the Delinquency Percentage exceeds 40% of the Credit Enhancement Percentage for such Distribution Date or (ii) the cumulative Realized Losses as a percentage of the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date is greater than the percentage set forth in the following table:

	Range of Distribution Dates

	Percentage

	July 2006 – June 2007

	2.75%*

	July 2007 – June 2008

	4.25%*

	July 2008 – June 2009

	5.75%*

	July 2009 and thereafter

	6.50%

_______________

*The percentages set forth in the table above are the percentage applicable for the first Distribution Date in the corresponding range of Distribution Date.  The percentage for each succeeding Distribution Date in a range increases incrementally by 1/12 of the positive difference between the percentage applicable to the first Distribution Date in that range and the percentage applicable to the first Distribution Date in the succeeding range.

SECTION 3.  

EFFECT OF AMENDMENT.

Upon execution of this Amendment, the Pooling and Servicing Agreement shall be, and be deemed to be, modified and amended in accordance herewith and the respective rights, limitations, obligations, duties, liabilities and immunities of the Depositor, the Seller, the Servicer and the Trustee shall hereafter be determined, exercised and enforced subject in all respects to such modifications and amendments, and all the terms and conditions of this Amendment shall be deemed to be part of the terms and conditions of the Pooling and Servicing Agreement for any and all purposes.  Except as modified and expressly amended by this Amendment, the Pooling and Servicing Agreement is in all respects ratified and confirmed, and all the terms, provisions and conditions thereof shall be and remain in full force and effect.

SECTION 4.  

BINDING EFFECT.

The provisions of this Amendment shall be binding upon and inure to the benefit of the respective successors and assigns of the parties hereto, and all such provisions shall inure to the benefit of the Depositor, the Seller, the Servicer and the Trustee.

SECTION 5.  EFFECTIVE DATE.

The provisions of this Amendment and the changes to the Pooling and Servicing Agreement provided for herein shall be effective as of the date hereof.

SECTION 6.  GOVERNING LAW.

This Amendment shall be construed in accordance with the laws of the State of New York and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws.

SECTION 7.  SEVERABILITY OF PROVISIONS.

If any one or more of the provisions or terms of this Amendment shall be for any reason whatsoever held invalid, then such provisions or terms shall be deemed severable from the remaining provisions or terms of this Amendment and shall in no way affect the validity or enforceability of the other provisions or terms of this Amendment.

SECTION 8.  SECTION HEADINGS.

The section headings herein are for convenience of reference only, and shall not limit or otherwise affect the meaning hereof.

SECTION 9.  COUNTERPARTS.

This Amendment may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

[signature pages follow]

IN WITNESS WHEREOF, the Depositor, the Seller, the Servicer and the Trustee, have caused their names to be signed hereto by their respective officers thereunto duly authorized as of the day and year first above written.

ASSET BACKED SECURITIES CORPORATION

as Depositor

By:  /s/ Lloyd Brown

Name: Lloyd Brown

Title: Vice President

DLJ MORTGAGE CAPITAL, INC.

as Seller

By:  /s/ Lloyd Brown

Name: Lloyd Brown

Title: Vice President

OCWEN LOAN SERVICING, LLC.,

as Servicer

By:  /s/ Richard Delgado

Name: Richard Delgado

Title: Authorized Representative

WELLS FARGO BANK, N.A.,

as Trustee

By:  /s/ Mary L. Sohlberg

Name: Mary L. Sohlberg

Title: Assistant Vice PresidentEXHIBIT 4.1

SUMMARY OF THE RUN-OFF PLAN

The principal components of the "Run-Off" plan that was approved by our board of
directors are a supervised sale of our credit assets by the end of 2008 and a
significant reduction in manpower and in operating expenses, subject to the
continued granting of the special line of credit by the Bank of Israel.

In this respect, the board of directors also approved the extensive and detailed
efficiency plan formulated by our management, which includes extensive cutbacks
in operating expenses and manpower, including termination and reduction in
banking services unrelated to the collection of debts.

In accordance with the "Run-Off" plan and the complementary efficiency plan, we
refrain from granting new loans and our activities concentrate on collection of
the existing loans. We implement, and intend to continue implementing, an
aggressive policy in all matters relating to collection of problematic debts. As
a result there has been a significant increase in our collection costs and legal
expenses.

As a direct result of our policy and the extensive efforts we have been
investing in collecting our loans, the balance of the loans still held by the
public has been significantly reduced. This balance (not including a certain
loan guaranteed by the State of Israel and granted out of a deposit that the
State of Israel has deposited with us for that purpose), which as of December
31, 2001, amounted to NIS 5,238 million, reached an amount of NIS 2,784 million
on December 31, 2003, an amount of NIS 1,276 million on December 31, 2004 and
NIS 1,276 million at December 31, 2005.

Even after taking into consideration the allowances for doubtful debts that were
made during this period, and which were deducted from this balance, the amount
of loans that was collected is considerable.

As a result of the developments in the third quarter of 2002, there was a
significant reduction in deposits from the public. The balance of the public's
deposits with us as of December 31, 2005 was NIS 178 million, compared with NIS
3,597 million on June 30, 2002.

As part of the implementation of our plans, we have reduced and/or ceased
activities we previously conducted. We have significantly reduced our foreign
currency and foreign trade activities, and we have completely or almost
completely discontinued the following activities: maintenance of a foreign
exchange dealing room (for customers), maintenance of current accounts and
securities accounts (for private customers), processing grants, independently
operating cash and clearing facilities and issuing credit cards.

The reduction in our operations was accompanied by a reduction in our staff. The
number of our employees, which as at January 1, 2002 was 170 and as at December
31, 2003 was 79, was reduced to 53 by December 31, 2005.

<PAGE>

In addition to the significant reduction in salary expenses because of the
reduction in the number of employees and the salary cutbacks that were made at
the beginning of 2003, we are also taking energetic steps to significantly
reduce our operating costs, and as part of these steps we moved our offices at
the end of the third quarter of 2003 to offices with lower rent and at the
beginning of 2004 we outsourced our computer services.

On July 26, 2005 the Bank's Board of Directors discussed a document that had
been prepared regarding the extension of the "Run-Off" plan. In light of the
document's conclusion regarding the advantages of extending the plan, the Board
of Directors approved extension of the plan until July 31, 2008, and its
continued implementation on the basis of the plan that was presented before it.
Furthermore, the Bank's Board of Directors decided that due to the reduction in
the Bank's activity pursuant to the "Run-Off" plan and the date to which the
plan was extended, the Bank would notify the Governor of the Bank of Israel that
it agrees that its banking license be restricted in a manner that reflects its
reduced activity as derived from the "Run-Off" plan, including the
non-acceptance of new deposits and the non-renewal of existing deposits that
have reached maturity, and to the restricted license specifying that it is valid
until the end of the plan (July 31, 2008).

On October 10, 2005 the Ministerial Committee for Social and Economic Affairs
(the Social Economic Cabinet) approved the extension of the Bank's "Run-Off"
plan, after two years earlier, on July 29, 2003, it had decided to adopt it. The
main principles of the Committee's decision from October 10, 2005 are as
follows:

     >    The assets of the Bank are to be sold of in a supervised process and
          over a period ending by July 31, 2008, in the framework of the
          "Run-Off" plan approved by the Bank's Board of Directors and with the
          changes to be determined by the Accountant General and the Government
          Companies Authority.

     >    The maximum amount of the special line of credit will at no time
          exceed NIS 1.25 billion and over the period of executing the Run-Off
          plan it will not exceed the amounts approved by the Bank of Israel.

     >    The Bank will not use the special line of credit or other sources for
          the purpose of providing new credit.

     >    The Government is responsible for the repayment of the special line of
          credit as from July 1, 2005, on the condition that the interest on the
          credit line until the end of the plan shall not exceed the Bank of
          Israel interest rate.

<PAGE>

     >    If at the end of the Run-Off plan there remains an unpaid balance of
          the special line of credit, the Government will repay the balance to
          Bank of Israel until July 31, 2008. The Government has noted before it
          the notice of the Governor of Bank of Israel that in exchange for its
          repayment of the credit balance, the collateral that was provided by
          the Bank for repayment of the credit line will be assigned in its
          favor (the debenture dated November 14, 2002 by which the Bank created
          a general floating lien in favor of the Bank of Israel). It is our
          understanding that the Government's assuming responsibility for the
          repayment of the balance of the special line of credit does not
          derogate from our primary obligation to repay the outstanding balance
          to the Bank of Israel.

We are presently operating under the terms of the "Run-Off" plan.

The financial statements do not contain any changes in the value and
classification of assets and liabilities that may be needed due to the
uncertainty of our future upon the expiration of the "Run-Off" plan.

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