Popular ABS, Inc. Depositor Equity One, Inc., a Delaware corporation A Seller and the Servicer Equity One, Incorporated Equity One, Inc., a Minnesota corporation Equity One Consumer Loan Company, Inc., a New Hampshire corporation and Popular Financial...

Popular ABS, Inc.

Depositor

Equity One, Inc., a Delaware corporation

A Seller and the Servicer

Equity One, Incorporated

Equity One, Inc., a Minnesota corporation

Equity One Consumer Loan Company, Inc., a New Hampshire corporation

and

Popular Financial Services, LLC

Sellers

and

JPMorgan Chase Bank, N.A.

Trustee

POOLING AND SERVICING AGREEMENT

Dated as of September 1, 2006

MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-D

TABLE OF CONTENTS

	Page
PRELIMINARY STATEMENT	1

ARTICLE I DEFINITIONS	10

40/30 LOANS	10
40 YEAR LOANS	10
60+ DAY DELINQUENT LOAN	10
ADJUSTED MORTGAGE RATE	10
ADJUSTED NET MORTGAGE RATE	10
ADVANCE	10
AGGREGATE CLASS B EARLY DISTRIBUTION AMOUNT	10
AGREEMENT	10
AMOUNT HELD FOR FUTURE DISTRIBUTION	10
APPLIED REALIZED LOSS AMOUNT	11
AVAILABLE FUNDS	11
AVM	11
BALLOON LOANS	11
BANKRUPTCY CODE	11
BASIC PRINCIPAL DISTRIBUTION AMOUNT	11
BENEFICIAL OWNER	11
BOOK-ENTRY CERTIFICATES	11
BORROWER RETENTION LOAN	11
BUSINESS DAY	11
CAP ACCOUNT	11
CAP AGREEMENT	12
CAP CLASS B-1 REALIZED LOSS AMORTIZATION AMOUNT	12
CAP CLASS B-2 REALIZED LOSS AMORTIZATION AMOUNT	12
CAP CLASS B-3 REALIZED LOSS AMORTIZATION AMOUNT	12
CAP CLASS M-1 REALIZED LOSS AMORTIZATION AMOUNT	12
CAP CLASS M-2 REALIZED LOSS AMORTIZATION AMOUNT	12
CAP CLASS M-3 REALIZED LOSS AMORTIZATION AMOUNT	12
CAP CLASS M-4 REALIZED LOSS AMORTIZATION AMOUNT	12
CAP CLASS M-5 REALIZED LOSS AMORTIZATION AMOUNT	12
CAP CLASS M-6 REALIZED LOSS AMORTIZATION AMOUNT	13
CAP COUNTERPARTY	13
CAP DISTRIBUTION AMOUNT	13
CAP EXTRA PRINCIPAL DISTRIBUTION AMOUNT	13
CAP NOTIONAL BALANCE	13
CAP STATED TERMINATION	13
CAP UNPAID REALIZED LOSS AMOUNT	13
CERTIFICATES	13
CERTIFICATE ACCOUNT	13
CERTIFICATE BALANCE	13
CERTIFICATEHOLDER OR HOLDER	14
CERTIFICATE REGISTER	14
CERTIFICATE REGISTRAR	14
CLASS	14
CLASS A-1 CERTIFICATE	14
CLASS A-2 CERTIFICATE	14
CLASS A-3 CERTIFICATE	14
CLASS B-1 APPLIED REALIZED LOSS AMOUNT	14

CLASS B-1 CERTIFICATE	14
CLASS B-1 PRINCIPAL DISTRIBUTION AMOUNT	15
CLASS B-1 REALIZED LOSS AMORTIZATION AMOUNT	15
CLASS B-2 APPLIED REALIZED LOSS AMOUNT	15
CLASS B-2 CERTIFICATE	15
CLASS B-2 PRINCIPAL DISTRIBUTION AMOUNT	15
CLASS B-2 REALIZED LOSS AMORTIZATION AMOUNT	16
CLASS B-3 APPLIED REALIZED LOSS AMOUNT	16
CLASS B-3 CERTIFICATE	16
CLASS B-3 PRINCIPAL DISTRIBUTION AMOUNT	16
CLASS B-3 REALIZED LOSS AMORTIZATION AMOUNT	16
CLASS CERTIFICATE BALANCE	16
CLASS I SHORTFALLS	17
CLASS INTEREST SHORTFALL	17
CLASS M-1 APPLIED REALIZED LOSS AMOUNT	17
CLASS M-1 CERTIFICATE	17
CLASS M-1 PRINCIPAL DISTRIBUTION AMOUNT	17
CLASS M-1 REALIZED LOSS AMORTIZATION AMOUNT	17
CLASS M-2 APPLIED REALIZED LOSS AMOUNT	17
CLASS M-2 CERTIFICATE	18
CLASS M-2 PRINCIPAL DISTRIBUTION AMOUNT	18
CLASS M-2 REALIZED LOSS AMORTIZATION AMOUNT	18
CLASS M-3 APPLIED REALIZED LOSS AMOUNT	18
CLASS M-3 CERTIFICATE	18
CLASS M-3 PRINCIPAL DISTRIBUTION AMOUNT	18
CLASS M-3 REALIZED LOSS AMORTIZATION AMOUNT	18
CLASS M-4 APPLIED REALIZED LOSS AMOUNT	19
CLASS M-4 CERTIFICATE	19
CLASS M-4 PRINCIPAL DISTRIBUTION AMOUNT	19
CLASS M-4 REALIZED LOSS AMORTIZATION AMOUNT	19
CLASS M-5 APPLIED REALIZED LOSS AMOUNT	19
CLASS M-5 CERTIFICATE	19
CLASS M-5 PRINCIPAL DISTRIBUTION AMOUNT	19
CLASS M-5 REALIZED LOSS AMORTIZATION AMOUNT	20
CLASS M-6 APPLIED REALIZED LOSS AMOUNT	20
CLASS M-6 CERTIFICATE	20
CLASS M-6 PRINCIPAL DISTRIBUTION AMOUNT	20
CLASS M-6 REALIZED LOSS AMORTIZATION AMOUNT	20
CLASS R CERTIFICATES	21
CLASS UNPAID INTEREST AMOUNTS	21
CLASS X CERTIFICATE	21
CLOSING DATE	21
CLOSING PLACE	21
CODE	21
COLLATERAL	21
COLLATERAL VALUE	21
COMBINED LOAN-TO-VALUE RATIO	22
COMMISSION	22
CORPORATE TRUST OFFICE	22
CORRESPONDING CLASS	22
CUSTODIAL AGREEMENT	22
CUSTODIAN	22
CUT-OFF DATE	22

CUT-OFF DATE POOL PRINCIPAL BALANCE	22
CUT-OFF DATE PRINCIPAL BALANCE	22
DEFECTIVE LOAN	22
DEFICIENT VALUATION	22
DEFINITIVE CERTIFICATES	22
DELETED LOAN	23
DENOMINATION	23
DEPOSITOR	23
DEPOSITORY	23
DEPOSITORY PARTICIPANT	23
DETERMINATION DATE	23
DISTRIBUTION ACCOUNT	23
DISTRIBUTION ACCOUNT DEPOSIT DATE	23
DISTRIBUTION DATE	23
DUE DATE	23
DUE PERIOD	23
ELIGIBLE ACCOUNT	23
EQUITY ONE-DELAWARE	24
EQUITY ONE-MINNESOTA	24
EQUITY ONE-NEW HAMPSHIRE	24
EQUITY ONE-PENNSYLVANIA	24
ERISA	24
ERISA QUALIFYING UNDERWRITING	24
ERISA-RESTRICTED CERTIFICATE	24
ESCROW ACCOUNT	24
EVENT OF DEFAULT	24
EXCESS CASHFLOW REALIZED LOSS AMORTIZATION XXXXXX	00
XXXXXXXX XXX	25
EXCESS PROCEEDS	25
EXCLUDED TRUST ASSETS	25
EXPENSE RATE	25
EXTERNAL TRUST	25
EXTRA PRINCIPAL DISTRIBUTION AMOUNT	25
FDIC	25
FHLMC	25
FINAL MATURITY DEFICIENCY	25
FINAL MATURITY RESERVE FUND	25
FINAL MATURITY RESERVE FUND ADDITION AMOUNT	25
FINAL MATURITY RESERVE FUND ADDITION RATE	26
FIRREA	26
FIXED SWAP PAYMENT	26
FLOATING SWAP PAYMENT	26
FMRF DISTRIBUTION AMOUNT	26
FNMA	26
INDIRECT PARTICIPANT	26
INITIAL CERTIFICATE ACCOUNT DEPOSIT	26
INSURANCE POLICY	26
INSURANCE PROCEEDS	26
INSURED EXPENSES	26
INTEREST ACCRUAL PERIOD	26
INTEREST DISTRIBUTION AMOUNT	27
INTEREST REMITTANCE AMOUNT	27
INVESTMENT LETTER	27

iii

LATEST POSSIBLE MATURITY DATE	27
LAST SCHEDULED DISTRIBUTION DATE	27
LIBOR	27
LIBOR DETERMINATION DATE	27
LIQUIDATED LOAN	27
LIQUIDATION PROCEEDS	28
LOANS	28
LOAN SCHEDULE	28
MAJORITY IN INTEREST	28
MERS (R)	28
MERS (R) SYSTEM	28
MIN	28
MOM LOAN	29
MONTHLY EXCESS CASHFLOW AMOUNT	29
MONTHLY EXCESS INTEREST AMOUNT	29
MONTHLY STATEMENT	29
XXXXX’X	29
MORTGAGE	29
MORTGAGED PROPERTY	29
MORTGAGE FILE	29
MORTGAGE NOTE	29
MORTGAGE RATE	29
MORTGAGOR	29
NET PREPAYMENT INTEREST SHORTFALLS	29
NET REALIZED LOSSES	29
NET RECOVERY REALIZED LOSSES	30
NET SWAP PAYMENT	30
NET WAC CAP	30
NET WAC CAP ACCOUNT	30
NET WAC CAP CARRYOVER	30
NET WAC RATE	30
NONRECOVERABLE ADVANCE	30
NOTICE OF FINAL DISTRIBUTION	30
OFFERED CERTIFICATES	30
OFFICER’S CERTIFICATE	30
OPINION OF COUNSEL	31
OPTIONAL TERMINATION DATE	31
OPTIONAL TERMINATION	31
ORIGINAL LOAN	31
OTS	31
OUTSTANDING	31
OUTSTANDING LOAN	31
OVERCOLLATERALIZATION AMOUNT	31
OVERCOLLATERALIZATION DEFICIENCY	31
OVERCOLLATERALIZATION RELEASE AMOUNT	32
OWNERSHIP INTEREST	32
PASS-THROUGH RATE	32
PAYING AGENT	32
PERCENTAGE INTEREST	32
PERMITTED INVESTMENTS	32
PERMITTED TRANSFEREE	33
PERSON	33
PLAN	34

POOL PRINCIPAL BALANCE	34
POPULAR FINANCIAL	34
PRELIMINARY PROSPECTUS SUPPLEMENT	34
POST-STEPDOWN REMAINING PRINCIPAL DISTRIBUTION AMOUNT	34
PRE-STEPDOWN REMAINING PRINCIPAL DISTRIBUTION AMOUNT	34
PREPAYMENT INTEREST EXCESS	34
PREPAYMENT INTEREST SHORTFALL	34
PREPAYMENT PERIOD	34
PRIMARY MORTGAGE INSURANCE POLICY	34
PRINCIPAL DISTRIBUTION AMOUNT	34
PRINCIPAL PREPAYMENT	34
PRINCIPAL PREPAYMENT IN FULL	35
PRINCIPAL REMITTANCE AMOUNT	35
PROSPECTUS SUPPLEMENT	35
PUBLICLY OFFERED CERTIFICATES	35
PURCHASE PRICE	35
PTCE	35
RATING AGENCY	35
REALIZED LOSS AMOUNT	35
REALIZED LOSSES	36
REALIZED LOSS AMORTIZATION AMOUNT	36
RECORD DATE	36
RECOVERY	36
REFERENCE BANKS	36
REGULATION AB	36
REFINANCE LOAN	37
RELIEF ACT	37
RELIEF ACT REDUCTIONS	37
REMAINING EXCESS INTEREST AMOUNT	37
REMAINING INTEREST REMITTANCE AMOUNT	37
REMAINING OVERCOLLATERALIZATION RELEASE AMOUNT	37
REMAINING PRINCIPAL DISTRIBUTION AMOUNT	37
REMIC	37
REMIC 1	37
REMIC 1 REGULAR INTEREST	37
REMIC 2	37
REMIC 2 NET WAC CAP	37
REMIC 2 REGULAR INTEREST	38
REMIC 3	38
REMIC 3 REGULAR INTEREST	38
REMIC CHANGE OF LAW	38
REMIC PROVISIONS	38
REO PROPERTY	38
REQUEST FOR RELEASE	38
REQUIRED INSURANCE POLICY	38
RESPONSIBLE OFFICER	38
RULE 144A LETTER	38
SCHEDULED PAYMENT	38
SECOND LIEN LOAN	39
SECURITIES ACT	39
SELLERS	39
SENIOR CERTIFICATES	39
SENIOR ENHANCEMENT PERCENTAGE	39

SENIOR PRINCIPAL DISTRIBUTION AMOUNT	39
SENIOR SPECIFIED ENHANCEMENT PERCENTAGE	39
SERVICER	39
SERVICER ADVANCE DATE	39
SERVICING ADVANCES	39
SERVICING AMOUNT	39
SERVICING CRITERIA	40
SERVICING FEE	40
SERVICING FEE RATE	40
SERVICING OFFICER	40
S&P	40
STARTUP DAY	40
STATED PRINCIPAL BALANCE	40
STEPDOWN DATE	40
SUBORDINATE CERTIFICATES	40
SUBSERVICER	40
SUBSTITUTE LOAN	40
SUBSTITUTION ADJUSTMENT AMOUNT	41
SWAP ACCOUNT	41
SWAP AGREEMENT	41
SWAP CLASS B-1 REALIZED LOSS AMORTIZATION AMOUNT	41
SWAP CLASS B-2 REALIZED LOSS AMORTIZATION AMOUNT	41
SWAP CLASS B-3 REALIZED LOSS AMORTIZATION AMOUNT	41
SWAP CLASS M-1 REALIZED LOSS AMORTIZATION AMOUNT	41
SWAP CLASS M-2 REALIZED LOSS AMORTIZATION AMOUNT	41
SWAP CLASS M-3 REALIZED LOSS AMORTIZATION AMOUNT	42
SWAP CLASS M-4 REALIZED LOSS AMORTIZATION AMOUNT	42
SWAP CLASS M-5 REALIZED LOSS AMORTIZATION AMOUNT	42
SWAP CLASS M-6 REALIZED LOSS AMORTIZATION AMOUNT	42
SWAP COUNTERPARTY	42
SWAP COUNTERPARTY TRIGGER EVENT	42
SWAP DISTRIBUTION AMOUNT	42
SWAP EARLY TERMINATION	42
SWAP EXTRA PRINCIPAL DISTRIBUTION AMOUNT	42
SWAP LIBOR	43
SWAP NOTIONAL BALANCE	43
SWAP REALIZED LOSS AMORTIZATION AMOUNT	43
SWAP STATED TERMINATION	43
SWAP UNPAID REALIZED LOSS AMOUNT	43
SWAP TERMINATION PAYMENT	43
TARGETED OVERCOLLATERALIZATION AMOUNT	43
TAX MATTERS PERSON	43
TAX MATTERS PERSON CERTIFICATE	44
TERMINATION PRICE	44
TRANSFER	44
TRANSFER AFFIDAVIT	44
TRANSFEROR CERTIFICATE	44
TRIGGER EVENT	44
TRUSTEE	45
TRUSTEE FEE	45
TRUSTEE FEE RATE	46
TRUST FUND	46
TRUSTEE PERMITTED WITHDRAWAL AMOUNT	46

UNPAID REALIZED LOSS AMOUNT	46
UNDERWRITER EXEMPTION	46
UNDERWRITERS	46
VOTING RIGHTS	46
ARTICLE II CONVEYANCE OF LOANS; REPRESENTATIONS AND WARRANTIES	47
SECTION 2.01. CONVEYANCE OF LOANS	47
SECTION 2.02. ACCEPTANCE BY TRUSTEE OF THE TRUST FUND	49
SECTION 2.03. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLERS AND THE SERVICER	51
SECTION 2.03A. ADDITIONAL OBLIGATIONS OF EQUITY ONE-DELAWARE	53
SECTION 2.04. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR AS TO THE LOANS	53
SECTION 2.05. DELIVERY OF OPINION OF COUNSEL IN CONNECTION WITH SUBSTITUTIONS	53
SECTION 2.06. EXECUTION AND DELIVERY OF CERTIFICATES	54
SECTION 2.07. REMIC MATTERS	54
SECTION 2.08. COVENANTS OF THE SERVICER	55
ARTICLE III ADMINISTRATION AND SERVICING OF LOANS	55
SECTION 3.01. SERVICER TO SERVICE LOANS	55
SECTION 3.02. SUBSERVICING; ENFORCEMENT OF THE OBLIGATIONS OF SERVICERS	56
SECTION 3.03. RIGHTS OF THE DEPOSITOR AND THE TRUSTEE IN RESPECT OF THE SERVICER	56
SECTION 3.04. TRUSTEE TO ACT AS SERVICER	57
SECTION 3.05. COLLECTION OF LOAN PAYMENTS; CERTIFICATE ACCOUNT; DISTRIBUTION ACCOUNT	57
SECTION 3.06. PAYMENT OF TAXES, ASSESSMENTS, HAZARD INSURANCE PREMIUMS AND SIMILAR ITEMS; ESCROW ACCOUNTS	59
SECTION 3.07. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING THE LOANS	60
SECTION 3.08. PERMITTED WITHDRAWALS FROM THE CERTIFICATE ACCOUNT AND DISTRIBUTION ACCOUNT	60
SECTION 3.09. MAINTENANCE OF HAZARD INSURANCE; MAINTENANCE OF PRIMARY INSURANCE POLICIES	61
SECTION 3.10. ENFORCEMENT OF DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS	62
SECTION 3.11. REALIZATION UPON DEFAULTED LOANS; REPURCHASE AND SALE OF CERTAIN LOANS	63
SECTION 3.12. DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF SERVICER TO BE HELD FOR THE TRUSTEE	65
SECTION 3.13. SERVICING COMPENSATION	65
SECTION 3.14. ACCESS TO CERTAIN DOCUMENTATION	66
SECTION 3.15. ANNUAL STATEMENT AS TO COMPLIANCE	66
SECTION 3.16. SERVICER’S ANNUAL SERVICING STATEMENT; INDEPENDENT PUBLIC ACCOUNTANTS’ ATTESTATION	66
SECTION 3.17. ERRORS AND OMISSIONS INSURANCE; FIDELITY BONDS	67
SECTION 3.18. ENGAGEMENT BY SERVICER OF AFFILIATES OR THIRD PARTY VENDORS	67
SECTION 3.19. DELINQUENT LOANS	68
ARTICLE IIIA RESERVE FUNDS AND EXTERNAL TRUST	68
SECTION 3A.01. SWAP ACCOUNT AND SWAP AGREEMENT	68
SECTION 3A.02. CAP ACCOUNT AND CAP AGREEMENT	69
SECTION 3A.03. THE FINAL MATURITY RESERVE FUND	70
SECTION 3A.04. NET WAC CAP ACCOUNT	71
SECTION 3A.05. EXTERNAL TRUST	71

vii

ARTICLE IV DISTRIBUTIONS AND ADVANCES BY THE SERVICER	72
SECTION 4.01. ADVANCES	72
SECTION 4.02. PRIORITIES OF DISTRIBUTION AND ALLOCATION	72
SECTION 4.02A. RECOVERIES	85
SECTION 4.03. MONTHLY STATEMENTS TO CERTIFICATEHOLDERS	86
SECTION 4.04. REPORTING	89
SECTION 5.01. THE CERTIFICATES	89
SECTION 5.02. CERTIFICATE REGISTER; REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES	90
SECTION 5.03. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES	94
SECTION 5.04. PERSONS DEEMED OWNERS	94
SECTION 5.05. ACCESS TO LIST OF CERTIFICATEHOLDERS’ NAMES AND ADDRESSES	94
SECTION 5.06. MAINTENANCE OF OFFICE OR AGENCY	94
ARTICLE VI THE DEPOSITOR AND THE SERVICER	95
SECTION 6.01. RESPECTIVE LIABILITIES OF THE DEPOSITOR AND THE SERVICER	95
SECTION 6.02. MERGER OR CONSOLIDATION OF THE DEPOSITOR OR THE SERVICER	95
SECTION 6.03. LIMITATION ON LIABILITY OF THE DEPOSITOR, THE SELLERS, THE SERVICER AND OTHERS	95
SECTION 6.04. LIMITATION ON RESIGNATION OF SERVICER	96
SECTION 6.05. INDEMNIFICATION	96
ARTICLE VII DEFAULT	96
SECTION 7.01. EVENTS OF DEFAULT	96
SECTION 7.02. TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR	98
SECTION 7.03. NOTIFICATION TO CERTIFICATEHOLDERS	99
SECTION 7.04. SURVIVABILITY OF SERVICER LIABILITIES	99
ARTICLE VIII CONCERNING THE TRUSTEE	99
SECTION 8.01. DUTIES OF TRUSTEE	99
SECTION 8.02 CERTAIN MATTERS AFFECTING THE TRUSTEE	100
SECTION 8.03. TRUSTEE NOT LIABLE FOR CERTIFICATES OR LOANS	102
SECTION 8.04. TRUSTEE MAY OWN CERTIFICATES	102
SECTION 8.05. TRUSTEE’S FEES AND EXPENSES	102
SECTION 8.06. ELIGIBILITY REQUIREMENTS FOR TRUSTEE	103
SECTION 8.07. RESIGNATION AND REMOVAL OF TRUSTEE	103
SECTION 8.08. SUCCESSOR TRUSTEE	104
SECTION 8.09. MERGER OR CONSOLIDATION OF TRUSTEE	104
SECTION 8.10. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE	104
SECTION 8.11. TAX MATTERS	105
SECTION 8.12. PERIODIC FILINGS	107
SECTION 8.13. APPOINTMENT OF CUSTODIANS	107
SECTION 8.14. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF CERTIFICATES	107
SECTION 8.15. SUITS FOR ENFORCEMENT	108
SECTION 8.16. TRUSTEE’S ANNUAL SERVICING STATEMENT; INDEPENDENT PUBLIC ACCOUNTANTS’ ATTESTATION	108
SECTION 8.17. ENGAGEMENT BY TRUSTEE OF AFFILIATES OR THIRD PARTIES	109
SECTION 8.18. REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE	109
ARTICLE IX TERMINATION	109
SECTION 9.01. TERMINATION UPON LIQUIDATION OR PURCHASE OF ALL LOANS	110
SECTION 9.02. FINAL DISTRIBUTION ON THE CERTIFICATES	110
SECTION 9.03. ADDITIONAL TERMINATION REQUIREMENTS	111

viii

ARTICLE X MISCELLANEOUS PROVISIONS	111
SECTION 10.01. AMENDMENT.	112
SECTION 10.02. RECORDATION OF AGREEMENT; COUNTERPARTS.	113
SECTION 10.03. GOVERNING LAW.	113
SECTION 10.04. INTENTION OF PARTIES.	113
SECTION 10.05. NOTICES.	115
SECTION 10.06. SEVERABILITY OF PROVISIONS.	116
SECTION 10.07. ASSIGNMENT.	116
SECTION 10.08. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.	116
SECTION 10.09. INSPECTION AND AUDIT RIGHTS.	116
SECTION 10.10. CERTIFICATES NONASSESSABLE AND FULLY PAID.	117
SECTION 10.11. THE CLOSING.	117
SECTION 10.12. INTERPRETATION.	117
SECTION 10.13. MATERIAL LITIGATION; AFFILIATIONS.	117
SECTION 10.14. NO PARTNERSHIP.	117
SECTION 10.15. PROTECTION OF ASSETS.	118
SECTION 10.16. EXECUTION OF SWAP AGREEMENT AND CAP AGREEMENT.	118

SCHEDULE I	S-I-1

SCHEDULE IIA	S-IIA-1

SCHEDULE IIB	S-IIB-1

SCHEDULE IIC	S-IIC-1

SCHEDULE IID	S-IID-1

SCHEDULE IIE	S-IIE-1

SCHEDULE IIF	S-IIF-1

SCHEDULE IIX	S-IIX-1

SCHEDULE IIIA	S-IIIA-1

SCHEDULE IIIB	S-IIIB-1

SCHEDULE IIIC	S-IIIC-1

SCHEDULE IIID	S-IIID-1

SCHEDULE IIIE	S-IIIE-1

SCHEDULE IIIF	S-IIIF-1

SCHEDULE IV	IV-1

SCHEDULE V	V-1

SCHEDULE VI	VI-1

SCHEDULE VII	VII-1

EXHIBIT X-0	X-0-0

XXXXXXX X-0	X-0-0

XXXXXXX X-0	X-0-0

XXXXXXX X-0	X-0-0

XXXXXXX B-1	B-1-1

EXHIBIT X-0	X-0-0

XXXXXXX X	X-0

XXXXXXX X	X-0

EXHIBIT E	E-1

EXHIBIT F	F-1

EXHIBIT G	X-0

XXXXXXX X	X-0

XXXXXXX I	I-1

EXHIBIT J	J-1

EXHIBIT X	X-1

EXHIBIT L	L-1

EXHIBIT M	M-1

EXHIBIT N	N-1

EXHIBIT O	O-1

THIS POOLING AND SERVICING AGREEMENT, dated as of September 1, 2006, by and among Popular ABS, Inc., a Delaware corporation, as depositor (the “Depositor”), Equity One, Inc., a Delaware corporation, as a seller (in such capacity, “Equity One-Delaware”) and as servicer (in such capacity, the “Servicer”), Equity One, Incorporated, a Pennsylvania corporation (“Equity One-Pennsylvania”), Popular Financial Services, LLC, a Delaware limited liability company (“Popular Financial”), Equity One Consumer Loan Company, Inc. a New Hampshire corporation (“Equity One-New Hampshire”), Equity One, Inc., a Minnesota corporation (“Equity One-Minnesota” and, together with Equity One-Delaware, Equity One-Pennsylvania and Popular Financial, the “Sellers”), and JPMorgan Chase Bank, National Association, a banking association organized under the laws of the United States, as trustee (the “Trustee”).

WITNESSETH THAT

In consideration of the mutual agreements herein contained, the parties hereto agree as follows:

PRELIMINARY STATEMENT

The Depositor is the owner of the Trust Fund that is hereby conveyed to the Trustee in return for the Certificates. As provided herein, an election shall be made that the Trust Fund (exclusive of (i) the Swap Agreement, (ii) the Swap Account, (iii) the Net WAC Cap Account, (iv) the Cap Agreement, (v) the Cap Account, (vi) the Final Maturity Reserve Fund, and (vii) the External Trust (collectively, the “Excluded Trust Assets”)) be treated for federal income tax purposes as comprising three real estate mortgage investment conduits under Section 860D of the Code (each a “REMIC” or, in the alternative “REMIC 1,” “REMIC 2,” and “REMIC 3”). Any inconsistencies or ambiguities in this Agreement or in the administration of this Agreement shall be resolved in a manner that preserves the validity of such REMIC elections.

Each Offered Certificate represents ownership of a regular interest in the REMIC for purposes of the REMIC Provisions. In addition, each Offered Certificate represents (i) the right to receive payments with respect to any Net WAC Cap Carryover and (ii) the obligation to pay Class I Shortfalls.

The Class R Certificate represents ownership of the sole Class of residual interest in each of REMIC 1, REMIC 2, and REMIC 3.

The Class X Certificate represents ownership of four regular interests in REMIC 3 as described in footnote (14) as well as ownership of the Excluded Trust Assets and the obligation to make Net Swap Payments to the Swap Counterparty and the obligation to make payments in respect of Net WAC Cap Carryover.

REMIC 3 shall hold as assets the uncertificated lower tier interests in REMIC 2, other than the Class R-2 interest, and each such lower tier interest is hereby designated as a regular interest in REMIC 2. REMIC 2 shall hold as its assets the uncertificated lower tier interests in REMIC 1, other than the Class R-1 interest, and each such lower tier interest is hereby designated as a regular interest in REMIC 1. REMIC 1 shall hold as its assets the property of the Trust Fund other than the lower tier interests in REMIC 1 and REMIC 2 and the Excluded Trust Assets.

The startup day for each REMIC created hereby for purposes of the REMIC Provisions is the Closing Date. In addition, for purposes of the REMIC Provisions, the latest possible maturity date for each regular interest in each REMIC created hereby is the Latest Possible Maturity Date.

REMIC 1

The following table sets forth the designations, initial principal balances, and interest rates for each interest in REMIC 1, each of which (other than the Class R-1 Interest) is hereby designated as a regular interest in REMIC 1 (the “REMIC 1 Regular Interests”):

Class Designation	Initial Principal Balance		Interest Rate
LT-F1	$	4,265,898.50		(1	)
LT-V1	$	4,265,898.50		(2	)
LT-F2	$	4,145,461.50		(1	)
LT-V2	$	4,145,461.50		(2	)
LT-F3	$	4,168,152.50		(1	)
LT-V3	$	4,168,152.50		(2	)
LT-F4	$	4,140,318.50		(1	)
LT-V4	$	4,140,318.50		(2	)
LT-F5	$	4,140,814.00		(1	)
LT-V5	$	4,140,814.00		(2	)
LT-F6	$	4,170,144.00		(1	)
LT-V6	$	4,170,144.00		(2	)
LT-F7	$	4,145,422.00		(1	)
LT-V7	$	4,145,422.00		(2	)
LT-F8	$	4,171,692.00		(1	)
LT-V8	$	4,171,692.00		(2	)
LT-F9	$	4,147,249.50		(1	)
LT-V9	$	4,147,249.50		(2	)
LT-F10	$	4,067,953.50		(1	)
LT-V10	$	4,067,953.50		(2	)
LT-F11	$	3,946,101.50		(1	)
LT-V11	$	3,946,101.50		(2	)
LT-F12	$	3,848,920.00		(1	)
LT-V12	$	3,848,920.00		(2	)
LT-F13	$	3,774,716.00		(1	)
LT-V13	$	3,774,716.00		(2	)
LT-F14	$	3,662,105.00		(1	)
LT-V14	$	3,662,105.00		(2	)
LT-F15	$	3,591,591.50		(1	)
LT-V15	$	3,591,591.50		(2	)
LT-F16	$	3,484,755.00		(1	)
LT-V16	$	3,484,755.00		(2	)
LT-F17	$	3,399,418.50		(1	)
LT-V17	$	3,399,418.50		(2	)
LT-F18	$	3,335,193.50		(1	)
LT-V18	$	3,335,193.50		(2	)
LT-F19	$	3,235,372.00		(1	)
LT-V19	$	3,235,372.00		(2	)
LT-F20	$	3,173,266.00		(1	)
LT-V20	$	3,173,266.00		(2	)
LT-F21	$	3,079,620.00		(1	)
LT-V21	$	3,079,620.00		(2	)
LT-F22	$	3,020,574.50		(1	)
LT-V22	$	3,020,574.50		(2	)
LT-F23	$	47,763,529.00		(1	)

Class Designation	Initial Principal Balance		Interest Rate
LT-V23	$	47,763,529.00		(2	)
LT-F24	$	1,135,952.50		(1	)
LT-V24	$	1,135,952.50		(2	)
LT-F25	$	1,111,167.00		(1	)
LT-V25	$	1,111,167.00		(2	)
LT-F26	$	1,086,937.00		(1	)
LT-V26	$	1,086,937.00		(2	)
LT-F27	$	1,063,252.00		(1	)
LT-V27	$	1,063,252.00		(2	)
LT-F28	$	1,040,097.50		(1	)
LT-V28	$	1,040,097.50		(2	)
LT-F29	$	1,017,461.50		(1	)
LT-V29	$	1,017,461.50		(2	)
LT-F30	$	995,333.50		(1	)
LT-V30	$	995,333.50		(2	)
LT-F31	$	973,699.50		(1	)
LT-V31	$	973,699.50		(2	)
LT-F32	$	952,550.00		(1	)
LT-V32	$	952,550.00		(2	)
LT-F33	$	955,964.50		(1	)
LT-V33	$	955,964.50		(2	)
LT-F34	$	910,999.50		(1	)
LT-V34	$	910,999.50		(2	)
LT-F35	$	891,252.50		(1	)
LT-V35	$	891,252.50		(2	)
LT-F36	$	871,946.50		(1	)
LT-V36	$	871,946.50		(2	)
LT-F37	$	853,069.50		(1	)
LT-V37	$	853,069.50		(2	)
LT-F38	$	834,612.50		(1	)
LT-V38	$	834,612.50		(2	)
LT-F39	$	816,567.00		(1	)
LT-V39	$	816,567.00		(2	)
LT-F40	$	798,921.50		(1	)
LT-V40	$	798,921.50		(2	)
LT-F41	$	781,668.50		(1	)
LT-V41	$	781,668.50		(2	)
LT-F42	$	764,798.00		(1	)
LT-V42	$	764,798.00		(2	)
LT-F43	$	748,301.50		(1	)
LT-V43	$	748,301.50		(2	)
LT-F44	$	732,171.00		(1	)
LT-V44	$	732,171.00		(2	)
LT-F45	$	716,397.00		(1	)
LT-V45	$	716,397.00		(2	)
LT-F46	$	700,972.00		(1	)
LT-V46	$	700,972.00		(2	)
LT-F47	$	685,888.50		(1	)
LT-V47	$	685,888.50		(2	)
LT-F48	$	671,138.50		(1	)
LT-V48	$	671,138.50		(2	)

Class Designation	Initial Principal Balance			Interest Rate
LT-F49	$	656,713.00			(1	)
LT-V49	$	656,713.00			(2	)
LT-F50	$	642,607.00			(1	)
LT-V50	$	642,607.00			(2	)
LT-F51	$	628,811.00			(1	)
LT-V51	$	628,811.00			(2	)
LT-F52	$	615,319.50			(1	)
LT-V52	$	615,319.50			(2	)
LT-F53	$	602,124.50			(1	)
LT-V53	$	602,124.50			(2	)
LT-F54	$	589,220.00			(1	)
LT-V54	$	589,220.00			(2	)
LT-F55	$	576,599.50			(1	)
LT-V55	$	576,599.50			(2	)
LT-F56	$	564,255.50			(1	)
LT-V56	$	564,255.50			(2	)
LT-F57	$	552,183.00			(1	)
LT-V57	$	552,183.00			(2	)
LT-F58	$	540,375.50			(1	)
LT-V58	$	540,375.50			(2	)
LT-F59	$	25,081,904.00			(1	)
LT-V59	$	25,081,904.00			(2	)
LT-A	$	4,663,242.26			(3	)
R-1		(4	)		(4	)

(1)

For any Distribution Date (and the related Interest Accrual Period) the interest rate for each of these REMIC 1 Regular Interests shall be the lesser of (i) the product of (a) the Fixed Rate, as that term is defined in the Swap Agreement, multiplied by (b) in the case of the first Distribution Date only, the quotient of 54 divided by 30, and for each Distribution Date thereafter, two, and (ii) the product of (a) the Net WAC Rate (without adjustment for the Final Maturity Reserve Fund Addition Rate) multiplied by (b) two.

(2)

For any Distribution Date (and the related Interest Accrual Period) the interest rate for each of these REMIC 1 Regular Interests shall be the excess, if any, of (i) the product of (a) the Net WAC Rate (without adjustment for the Final Maturity Reserve Fund Addition Rate) multiplied by (b) two, over (ii) the product of (a) the Fixed Rate, as that term is defined in the Swap Agreement, multiplied by (b) for the first Distribution Date only, the quotient of 54 divided by 30, and for each Distribution Date thereafter, two.

(3)	For any Distribution Date (and the related Interest Accrual Period), the Net WAC Rate (without adjustment for the Final Maturity Reserve Fund Addition Rate).

(4)	The Class R-1 interest shall not have a principal amount and shall not bear interest. The Class R-1 interest is hereby designated as the sole class of residual interest in REMIC 1.

On each Distribution Date, the Trustee shall distribute the aggregate Interest Remittance Amount first to pay fees and expenses of the trust, other than any Net Swap Payment owed to the Counterparty, and then with respect to each of the REMIC 1 Regular Interests based on the above-described interest rates.

On each Distribution Date, the Trustee shall distribute the Principal Remittance Amount sequentially to the REMIC 1 Regular Interests, first to the LT- A Interest until its principal balance is reduced to zero, and then in ascending order of their numerical designation, and, with respect to each pair of REMIC 1 Regular Interests having the same numerical designation, in equal amounts to each such interest, until the principal balance of each such interest is reduced to zero. All losses on the Mortgage Loans shall be allocated among the REMIC 1 Regular Interests in the same manner that principal distributions are allocated.

REMIC 2

The following table sets forth the designations, principal balances and interest rates for each interest in REMIC 2, each of which (other than the Class R-2 interest) is hereby designated as a regular interest in REMIC 2 (the “REMIC 2 Regular Interests”):

REMIC 3 Lower Tier Class Designation	REMIC 3 Lower Tier Interest Rate			Initial Class Principal Amount			Corresponding Class of Certificate(s)
Class LT-A1		(1	)	$	84,244,500.00			Class A1
Class LT-A2		(1	)	$	30,331,000.00			Class A2
Class LT-A3		(1	)	$	16,257,000.00			Class A3
Class LT-M1		(1	)	$	20,780,000.00			Class M1
Class LT-M2		(1	)	$	11,555,000.00			Class M2
Class LT-M3		(1	)	$	3,075,000.00			Class M3
Class LT-M4		(1	)	$	3,075,000.00			Class M4
Class LT-M5		(1	)	$	1,863,500.00			Class M5
Class LT-M6		(1	)	$	2,702,000.00			Class M6
Class LT-B1		(1	)	$	3,075,000.00			Class B1
Class LT-B2		(1	)	$	2,609,000.00			Class B2
Class LT-B3		(1	)	$	4,472,500.00			Class B3
Class LT-Accrual		(1	)	$	188,702,742.26			N/A
Class LT-Reserve-IO		(2	)		(2	)		N/A
Class LT-Swap-IO		(3	)		(3	)		N/A
Class R-2		(4	)		(4	)		N/A

(1)

For any Distribution Date (and the related Interest Accrual Period) the interest rate for each of these REMIC 2 Regular Interests is a per annum rate equal to the weighted average of the interest rates on the REMIC 1 Regular Interests, weighted on the basis of their principal balances as of the first day of the related Interest Accrual Period, provided, however, that: (i) for any Distribution Date on which the Class LT-Swap-IO Interest is entitled to a portion of the interest accruals on a REMIC 1 Regular Interest having an “F” in its class designation, as described in footnote three below, such weighted average shall be computed by first subjecting the rate on such REMIC 1 Regular Interest to a cap equal to the product of (a) Swap LIBOR (determined pursuant to the Swap Agreement) multiplied by (b) 2 multiplied by (c) the quotient of the actual number of days in the Interest Accrual Period divided by 30; and (ii) for each Distribution Date on and after the Distribution Date in October 2016, the interest rate on each REMIC 1 Regular Interest shall be first reduced by the product of (i) the Final Maturity Reserve Fund Addition Rate multiplied by (ii) the quotient of (a) the Cut-off Date Principal Balance of the 40-Year Loans divided by (b) the aggregate Cut-off Date Pool Principal Balance.

(2)

The Class LT-Reserve-IO is and interest-only class that does not have a principal balance. The Class LT-Reserve-IO has a notional balance that will at all times equal the sum of the principal balances of the REMIC 1 Regular Interests and it shall accrue interest at a fixed rate of 0.00% for each Distribution Date (and the related Interest Accrual Period) on or before the Distribution Date in October 2016, and for each Distribution Date on and after the Distribution Date in October 2016, shall accrue interest at a fixed rate equal to the product of (i) the Final Maturity Reserve Fund Addition Rate multiplied by (ii) the quotient of (a) the Cut-off Date Principal Balance of the 40-Year Loans divided by (b) the aggregate Cut-off Date Pool Principal Balance. .

(3)

The Class LT-Swap-IO is an interest-only class that does not have a principal balance. For only those Distribution Dates listed in the first column in the table below, the Class LT-Swap-IO shall be entitled to interest accrued on the REMIC 1 Regular Interests listed in second column in the table below at a per annum rate equal to the excess, if any, of (i) the interest rate for such REMIC 1 Regular Interest for such Distribution Date over (ii) the product of (a) Swap LIBOR (determined pursuant to the Swap Agreement) multiplied by (b) 2 multiplied by (c) the quotient of the actual number of days in the Interest Accrual Period divided by 30.

Distribution Dates*		REMIC 1 Class Designation
1		Class LT-F1
1-2		Class LT-F2
1-3		Class LT-F3
1-4		Class LT-F4
1-5		Class LT-F5
1-6		Class LT-F6
1-7		Class LT-F7
1-8		Class LT-F8
1-9		Class LT-F9
1-10		Class LT-F10
1-11		Class LT-F11
1-12		Class LT-F12
1-13		Class LT-F13
1-14		Class LT-F14
1-15		Class LT-F15
1-16		Class LT-F16
1-17		Class LT-F17
1-18		Class LT-F18
1-19		Class LT-F19
1-20		Class LT-F20
1-21		Class LT-F21
1-22		Class LT-F22
1-23		Class LT-F23
1-24		Class LT-F24
1-25		Class LT-F25
1-26		Class LT-F26
1-27		Class LT-F27
1-28		Class LT-F28
1-29		Class LT-F29
1-30		Class LT-F30
1-31		Class LT-F31
1-32		Class LT-F32
1-33		Class LT-F33
1-34		Class LT-F34
1-35		Class LT-F35
1-36		Class LT-F36
1-37		Class LT-F37
1-38		Class LT-F38
1-39		Class LT-F39
1-40		Class LT-F40

Distribution Dates*		REMIC 1 Class Designation
1-41		Class LT-F41
1-42		Class LT-F42
1-43		Class LT-F43
1-44		Class LT-F44
1-45		Class LT-F45
1-46		Class LT-F46
1-47		Class LT-F47
1-48		Class LT-F48
1-49		Class LT-F49
1-50		Class LT-F50
1-51		Class LT-F51
1-52		Class LT-F52
1-53		Class LT-F53
1-54		Class LT-F54
1-55		Class LT-F55
1-56		Class LT-F56
1-57		Class LT-F57
1-58		Class LT-F58
1-59		Class LT-F59

*Refers to the Distribution Date set forth in the second column of the Swap Maximum Notional Balance Schedule set forth at Exhibit L attached hereto.

(4)	The Class R-2 interest is the sole class of residual interests in REMIC 2. It does not have an interest rate or a principal balance.

On each Distribution Date, interest shall be distributed on the REMIC 2 Regular Interests based on the above-described interest rates, provided, however, that interest that accrues on the Class LT-Accrual Interest shall be deferred in the amount required to make distributions under priority (a) below. Any interest so deferred shall itself bear interest at the interest rate for the Class LT-Accrual Interest. An amount equal to the interest so deferred shall be distributed as additional principal on the other REMIC 2 Regular Interests having a principal balance in the manner described under priority (a) below.

On each Distribution Date principal shall be distributed, and Realized Losses shall be allocated, among the Lower Tier Interests in REMIC 2 in the following order of priority:

(a)

First, to the Class LT-A1, Class LT-A2, Class LT-A3, Class LT-M1, Class LT-M2, Class LT-M3, Class LT-M4, Class LT-M5, Class LT-M6, Class LT-B1, Class LT-B2, and Class LT-B3 Interests until the principal balance of each such REMIC 2 Regular Interest equals one-half of the Class Certificate Balance of the Corresponding Class of Certificates immediately after such Distribution Date; and

(b)

Second, to the Class LT-Accrual Interests, any remaining amounts.

REMIC 3

The following table sets forth characteristics of the Certificates, each of which, except for the Class R Certificates, represents ownership of a “regular interest” in REMIC 3 as well as certain contractual rights and obligations, together with the minimum denominations and integral multiples in excess thereof in which such Classes shall be issuable (except that one Certificate of each Class of Certificates may be issued in a different amount and, in addition, one Class R Certificate representing the Tax Matters Person Certificate may be issued in a different amount):

	Initial Class Certificate Balance			Pass-Through Rate(1)			Minimum Denomination		Integral Multiples in Excess of Minimum
Class A-1	$	168,489,000.00			LIBOR + 0.060% (2	)	$	25,000	$	1
Class A-2	$	60,662,000.00			LIBOR + 0.160% (3	)	$	25,000	$	1
Class A-3	$	32,514,000.00			LIBOR + 0.260% (4	)	$	25,000	$	1
Class M-1	$	41,560,000.00			LIBOR + 0.310% (5	)	$	25,000	$	1
Class M-2	$	23,110,000.00			LIBOR + 0.380% (6	)	$	25,000	$	1
Class M-3	$	6,150,000.00			LIBOR + 0.440% (7	)	$	25,000	$	1
Class M-4	$	6,150,000.00			LIBOR + 0.730% (8	)	$	25,000	$	1
Class M-5	$	3,727,000.00			LIBOR + 0.820% (9	)	$	25,000	$	1
Class M-6	$	5,404,000.00			LIBOR + 1.570% (10	)	$	25,000	$	1
Class B-1	$	6,150,000.00			LIBOR + 2.000% (11	)	$	25,000	$	1
Class B-2	$	5,218,000.00			LIBOR + 2.000% (12	)	$	25,000	$	1
Class B-3	$	8,945,000.00			LIBOR + 2.000% (13	)	$	25,000	$	1
Class X		(14	)		(14	)		N/A		N/A
Class R	$	0			N/A			N/A		N/A

⁽¹⁾

As to any Distribution Date, this rate shall equal the lesser of (a) the lesser of (i) the rate per annum set forth above and (ii) 14.00%, and (b) the Net WAC Cap. For purposes of the REMIC Provisions, the reference to Net WAC Cap in the preceding sentence shall be deemed to be a reference to the REMIC 2 Net WAC Cap. For any Distribution Date on which the Pass-Through Rate for any Class of Certificates is based on the Net WAC Cap, the amount of interest that would have been distributable on such Class if the REMIC 2 Net WAC Cap had been substituted for the Net WAC Cap shall be treated as having actually been paid to the Holders of such Class and then deposited by such Holders into the Swap Account. If for any Distribution Date, the Pass-Through Rate for any Class of Certificates exceeds the REMIC 2 Net WAC Cap, payments based on such excess shall be deemed to have been made from the Net WAC Cap Account.

⁽²⁾

After the Optional Termination Date, this rate will increase to LIBOR + 0.120%.

⁽³⁾

After the Optional Termination Date, this rate will increase to LIBOR + 0.320%.

⁽⁴⁾

After the Optional Termination Date, this rate will increase to LIBOR + 0.520%.

⁽⁵⁾

After the Optional Termination Date, this rate will increase to LIBOR + 0.465%.

⁽⁶⁾

After the Optional Termination Date, this rate will increase to LIBOR + 0.570%.

⁽⁷⁾

After the Optional Termination Date, this rate will increase to LIBOR + 0.660%.

⁽⁸⁾

After the Optional Termination Date, this rate will increase to LIBOR + 1.095%.

⁽⁹⁾

After the Optional Termination Date, this rate will increase to LIBOR + 1.230%.

⁽¹⁰⁾

After the Optional Termination Date, this rate will increase to LIBOR + 2.355%.

⁽¹¹⁾

After the Optional Termination Date, this rate will increase to LIBOR + 3.000%.

⁽¹²⁾

After the Optional Termination Date, this rate will increase to LIBOR + 3.000%.

⁽¹³⁾

After the Optional Termination Date, this rate will increase to LIBOR + 3.000%.

⁽¹⁴⁾

For purposes of the REMIC Provisions, the Class X Certificates shall have an initial principal balance of $4,663,242.26 (initial overcollateralization amount), and the right to receive distributions of such amount in the form of Overcollateralization Release Amounts represents a regular interest in the REMIC 3. The Class X Certificate shall also comprise 3 notional components, each of which represents a regular interest in REMIC 3. The first such component has a notional balance that will at all times equal the aggregate of the principal balances of the REMIC 2 Regular Interests, and, for each Distribution Date (and the related Accrual Period) this notional component shall bear interest at a per annum rate equal to the excess, if any, of (i) (a) the weighted average of the interest rates on the REMIC 2 Regular Interests (other than the Class LT-Reserve-IO interest and the LT-Swap-IO interest), over (ii) the product of (a) the weighted average of the interest rates on the REMIC 2 Regular Interests (other than the Class LT-Reserve-IO and LT-Swap-IO), computed for this purpose by subjecting the rate on the Class LT-Accrual interest to a cap of 0.00%, and by subjecting the rate on each of the other REMIC 2 Regular Interests to a cap equal to the pass through rate on its Corresponding Class of Certificates (assuming that REMIC 2 Net WAC Cap was substituted for Net WAC Cap in the definition of Pass-Through Rate for such Class) multiplied by (b) two (2) multiplied by (c) the quotient of the actual number of days in the Interest Accrual Period divided by thirty (30). The second notional component represents the right to receive all distributions in respect of the Class LT-Reserve-IO interest in REMIC 2. The third notional component represent the right to receive all distributions in respect of the Class LT-Swap IO in REMIC 2. For purposes of the REMIC Provisions, the Class X Certificate shall represent beneficial ownership of the Excluded Trust Assets.

In calculating interest accrued for any Interest Accrual Period on any Class of Certificates, other than the Class X Certificates, an actual/360 day-count convention shall be used. In calculating interest accrued on the Class X Certificates and any REMIC 1 Regular Interest or any REMIC 2 Regular Interest, a 30/360 day-count convention shall be used.

ARTICLE I

DEFINITIONS

Whenever used in this Agreement, the following words and phrases, unless the context otherwise requires, shall have the following meanings:

40/30 Loans

Loans that are intended to have the principal balance thereof amortize over a term of forty (40) years with a required balloon payment thirty (30) years after origination.

40 Year Loans

Loans that have forty (40) year original terms to maturity.

60+ Day Delinquent Loan

As of any Distribution Date, each Loan with respect to which any portion of a Scheduled Payment is, as of the last day of the calendar month immediately preceding that Distribution Date, 60 days or more contractually past due (assuming 30 day months), each Loan in foreclosure, all REO Property and each Loan for which the Mortgagor has filed for bankruptcy after the Closing Date.

Adjusted Mortgage Rate

As to each Loan, and at any time, the per annum rate equal to the Mortgage Rate less the Servicing Fee Rate.

Adjusted Net Mortgage Rate

As to each Loan, and at any time, the per annum rate equal to the Mortgage Rate less the related Expense Rate.

Advance

The payment required to be made by the Servicer with respect to any Distribution Date pursuant to Section 4.01, the amount of any such payment being equal to the aggregate of payments of principal and interest (net of the Servicing Fee) on the Loans that were due on such Loans’ respective Due Dates in the related Due Period and not received as of the close of business on the Determination Date in the month of such Distribution Date, other than the aggregate amount of any such delinquent payments that the Servicer, in its good faith judgment, has determined would not be recoverable out of Insurance Proceeds, Liquidation Proceeds or otherwise from the related Loans.

Aggregate Class B Early Distribution Amount

As of any Distribution Date, the aggregate sum of all amounts paid to the Class B-1, Class B-2 and Class B-3 Certificates on prior Distribution Dates pursuant to clauses (xxxii) through (xxxvii) of Section 4.02(d).

Agreement

This Pooling and Servicing Agreement, together with all of the exhibits and schedules hereto, and all amendments or supplements of any of the foregoing.

Amount Held for Future Distribution

As to any Distribution Date and the Offered Certificates, the aggregate amount held in the Certificate Account at the close of business on the related Determination Date on account of (a) Principal Prepayments, Liquidation Proceeds and Recoveries received after the Prepayment Period corresponding to such Distribution Date and (b) all Scheduled Payments due after the Loans’ respective Due Dates in the related Due Period.

Applied Realized Loss Amount

With respect to (a) the Class M-1 Certificates, the Class M-1 Applied Realized Loss Amount, (b) the Class M-2 Certificates, the Class M-2 Applied Realized Loss Amount, (c) the Class M-3 Certificates, the Class M-3 Applied Realized Loss Amount, (d) the Class M-4 Certificates, the Class M-4 Applied Realized Loss Amount, (e) the Class M-5 Certificates, the Class M-5 Applied Realized Loss Amount, (f) the Class M-6 Certificates, the Class M-6 Applied Realized Loss Amount, (g) the Class B-1 Certificates, the Class B-1 Applied Realized Loss Amount, (h) the Class B-2 Certificates, the Class B-2 Applied Realized Loss Amount and (i) the Class B-3 Certificates, the Class B-3 Applied Realized Loss Amount.

Available Funds

As to any Distribution Date, the sum of (a) the aggregate amount held in the Certificate Account at the close of business on the related Determination Date net of the Amount Held for Future Distribution and net of amounts permitted to be withdrawn from the Certificate Account pursuant to clauses (i)-(viii), inclusive, of Section 3.08(a) and amounts permitted to be withdrawn from the Distribution Account pursuant to clauses (i) and (ii) of Section 3.08(b), (b) the amount of the related Advance, if any, and (c) the aggregate of the Purchase Prices and Substitution Adjustment Amounts received on or before the related Distribution Account Deposit Date and (d) with respect to the initial Distribution Date, the Initial Certificate Account Deposit.

AVM

Automated Valuation Model.

Balloon Loans

Loans with balloon payments.

Bankruptcy Code

The United States Bankruptcy Reform Act of 1978, as amended, and related rules promulgated thereunder.

Basic Principal Distribution Amount

With respect to any Distribution Date, the amount by which (a) the Principal Remittance Amount for that Distribution Date exceeds (b) the Overcollateralization Release Amount, if any, for that Distribution Date.

Beneficial Owner

With respect to any Book-Entry Certificate, the Person who is the beneficial owner of such Book-Entry Certificate.

Book-Entry Certificates

The Offered Certificates.

Borrower Retention Loan

A Refinance Loan, which is not a Second Lien Loan, for which a Seller obtained at the origination of such Loan a title search in lieu of a title insurance policy.

Business Day

Any day other than (a) a Saturday or a Sunday or (b) a day on which banking institutions in New York City, or in the city where the chief executive office of the Servicer is located, are authorized or obligated by law or executive order to be closed.

Cap Account

The account established and maintained by the Trustee pursuant to Section 3A.02.

Cap Agreement

The Master Agreement dated as of September 28, 2006 (including the Schedule thereto and the Transaction (as defined in the Cap Agreement) thereunder evidenced by the Confirmation (as defined in the Cap Agreement) bearing the reference number N512432N dated as of September 28, 2006), relating to the Transaction, by and between the Cap Counterparty and the Trustee not in its individual capacity, but solely as trustee of the External Trust relating to the Popular ABS, Inc. Mortgage Pass-Through Certificates, Series 2006-D.

Cap Class B-1 Realized Loss Amortization Amount

As to the Class B-1 Certificates and as of any Distribution Date, the lesser of (a) the Cap Unpaid Realized Loss Amount for the Class B-1 Certificates as of that Distribution Date and (b) the excess of (i) the Cap Distribution Amount over (ii) the sum of the amounts described in clauses (i) through (xxviii) of the Section 4.02(f) for that Distribution Date.

Cap Class B-2 Realized Loss Amortization Amount

As to the Class B-2 Certificates and as of any Distribution Date, the lesser of (a) the Cap Unpaid Realized Loss Amount for the Class B-2 Certificates as of that Distribution Date and (b) the excess of (i) the Cap Distribution Amount over (ii) the sum of the amounts described in clauses (i) through (xxix) of Section 4.02(f) for that Distribution Date.

Cap Class B-3 Realized Loss Amortization Amount

As to the Class B-3 Certificates and as of any Distribution Date, the lesser of (a) the Cap Unpaid Realized Loss Amount for the Class B-3 Certificates as of that Distribution Date and (b) the excess of (i) the Cap Distribution Amount over (ii) the sum of the amounts described in clauses (i) through (xxx) of the Section 4.02(f) for that Distribution Date.

Cap Class M-1 Realized Loss Amortization Amount

As to the Class M-1 Certificates and as of any Distribution Date, the lesser of (a) the Cap Unpaid Realized Loss Amount for the Class M-1 Certificates as of that Distribution Date and (b) the excess of (i) the Cap Distribution Amount over (ii) the sum of the amounts described in clauses (i) through (xxii) of the Section 4.02(f) for that Distribution Date.

Cap Class M-2 Realized Loss Amortization Amount

As to the Class M-2 Certificates and as of any Distribution Date, the lesser of (a) the Cap Unpaid Realized Loss Amount for the Class M-2 Certificates as of that Distribution Date and (b) the excess of (i) the Cap Distribution Amount over (ii) the sum of the amounts described in clauses (i) through (xxiii) of the Section 4.02(f) for that Distribution Date.

Cap Class M-3 Realized Loss Amortization Amount

As to the Class M-3 Certificates and as of any Distribution Date, the lesser of (a) the Cap Unpaid Realized Loss Amount for the Class M-3 Certificates as of that Distribution Date and (b) the excess of (i) the Cap Distribution Amount over (ii) the sum of the amounts described in clauses (i) through (xxiv) of the Section 4.02(f) for that Distribution Date.

Cap Class M-4 Realized Loss Amortization Amount

As to the Class M-4 Certificates and as of any Distribution Date, the lesser of (a) the Cap Unpaid Realized Loss Amount for the Class M-4 Certificates as of that Distribution Date and (b) the excess of (i) the Cap Distribution Amount over (ii) the sum of the amounts described in clauses (i) through (xxv) of the Section 4.02(f) for that Distribution Date.

Cap Class M-5 Realized Loss Amortization Amount

As to the Class M-5 Certificates and as of any Distribution Date, the lesser of (a) the Cap Unpaid Realized Loss Amount for the Class M-5 Certificates as of that Distribution Date and (b) the excess of (i) the Cap Distribution Amount over (ii) the sum of the amounts described in clauses (i) through (xxvi) of the Section 4.02(f) for that Distribution Date.

Cap Class M-6 Realized Loss Amortization Amount

As to the Class M-6 Certificates and as of any Distribution Date, the lesser of (a) the Cap Unpaid Realized Loss Amount for the Class M-6 Certificates as of that Distribution Date and (b) the excess of (i) the Cap Distribution Amount over (ii) the sum of the amounts described in clauses (i) through (xxvii) of the Section 4.02(f) for that Distribution Date.

Cap Counterparty

Deutsche Bank AG, New York Branch.

Cap Distribution Amount

As defined in Section 4.02(f).

Cap Extra Principal Distribution Amount

As of any Distribution Date, the lesser of (a) the remaining Cap Distribution Amount after making all of the distributions in clauses (i) through (xx) of Section 4.02(f), (b) the Overcollateralization Deficiency for that Distribution Date, calculated after giving effect to the funding of the Extra Principal Distribution Amount pursuant to clause (iii) of Section 4.02(d) and the funding of the Swap Extra Principal Distribution Amount pursuant to clause (xxiii) of Section 4.02(e) and (c) the excess of (i) the aggregate amount of Realized Losses for that Distribution Date and Realized Losses for all prior Distribution Dates (other than Realized Losses applied in reduction of the Class Certificate Balance of one or more classes of Subordinate Certificates) over (ii) the aggregate amount distributed pursuant to clause (xxiii) of Section 4.02(e) and clause (xxi) of Section 4.02(f) on all prior Distribution Dates.

Cap Notional Balance

As of any Distribution Date, the notional balance specified under the Cap Agreement for that Distribution Date.

Cap Stated Termination

August 25, 2013, subject to the Following Business Day Convention (as such term is defined in the Cap Agreement).

Cap Unpaid Realized Loss Amount

For any class of Subordinate Certificates and as to any Distribution Date, the excess of (a) the Unpaid Realized Loss Amount with respect to that class for that Distribution Date over (b) the sum of (i) the Excess Cashflow Realized Loss Amortization Amount paid to that Class pursuant to Section 4.02(d) on that Distribution Date and (ii) the Swap Realized Loss Amortization Amount paid to that Class pursuant to Section 4.02(e) on that Distribution Date.

Certificates

The Offered Certificates, the Class R Certificates and the Class X Certificates.

Certificate Account

The separate Eligible Account created and maintained by the Servicer pursuant to Section 3.05 with a depository institution in the name of the Servicer for the benefit of the Trustee on behalf of the Certificateholders and designated “Certificate Account, Equity One, Inc., as trustee for the registered holders of Popular ABS, Inc., Mortgage Pass-Through Certificates Series 2006-D.”

Certificate Balance

With respect to any Offered Certificate at any time, the maximum dollar amount of principal to which the Holder thereof is then entitled hereunder, such amount being equal to the Denomination thereof reduced by the sum of (a) all amounts previously distributed to that Offered Certificate as payments of principal, and (b) with respect to any Subordinate Certificate, that Subordinate Certificate’s pro rata share of the cumulative amount of Applied Realized Loss Amounts with respect to such Class for all prior Distribution Dates.

Certificateholder or Holder

The person in whose name a Certificate is registered in the Certificate Register, except that, solely for the purpose of giving any consent pursuant to this Agreement, any Certificate registered in the name of the Depositor or any affiliate of the Depositor shall be deemed not to be Outstanding and the Percentage Interest evidenced thereby shall not be taken into account in determining whether the requisite amount of Percentage Interests necessary to effect such consent has been obtained; provided, however, that if any such Person (including the Depositor) owns 100% of the Percentage Interests evidenced by a Class of Certificates, such Certificates shall be deemed to be Outstanding for purposes of any provision hereof that requires the consent of the Holders of Certificates of a particular Class as a condition to the taking of any action hereunder. The Trustee is entitled to rely conclusively on a certification of the Depositor or any affiliate of the Depositor in determining which Certificates are registered in the name of an affiliate of the Depositor.

Certificate Register

The register maintained pursuant to Section 5.02.

Certificate Registrar

JPMorgan Chase Bank, N.A. and its successors and, if a successor certificate registrar is appointed hereunder, such successor.

Class

All Certificates bearing the same class designation as set forth in the Preliminary Statement.

Class A-1 Certificate

Any Certificate executed and authenticated by the Trustee substantially in the form attached hereto as Exhibit A-1 and designated as a Class A-1 Certificate.

Class A-2 Certificate

Any Certificate executed and authenticated by the Trustee substantially in the form attached hereto as Exhibit A-1 and designated as a Class A-2 Certificate.

Class A-3 Certificate

Any Certificate executed and authenticated by the Trustee substantially in the form attached hereto as Exhibit A-1 and designated as a Class A-3 Certificate.

Class B-1 Applied Realized Loss Amount

As to the Class B-1 Certificates and as of any Distribution Date, the lesser of (a) the Class Certificate Balance thereof (after taking into account the distribution of the Principal Distribution Amount on that Distribution Date, but prior to the application of the Class B-1 Applied Realized Loss Amount, if any, on that Distribution Date) and (b) the excess of (i) the Realized Loss Amount as of that Distribution Date over (ii) the sum of the Class B-2 Applied Realized Loss Amount and the Class B-3 Applied Realized Loss Amortization Amount, in each case as of that Distribution Date.

Class B-1 Certificate

Any Certificate executed and authenticated by the Trustee substantially in the form attached hereto as Exhibit A-4 and designated as a Class B-1 Certificate.

Class B-1 Principal Distribution Amount

As of any Distribution Date on or after the Stepdown Date and as long as a Trigger Event is not in effect, the excess of (a) the sum of (i) the sum of the Class Certificate Balances of the Senior Certificates (after taking into account the payment of the Senior Principal Distribution Amount on that Distribution Date), (ii) the Class Certificate Balance of the Class M-1 Certificates (after taking into account the payment of the Class M-1 Principal Distribution Amount on that Distribution Date), (iii) the Class Certificate Balance of the Class M-2 Certificates (after taking into account the payment of the Class M-2 Principal Distribution Amount on that Distribution Date), (iv) the Class Certificate Balance of the Class M-3 Certificates (after taking into account the payment of the Class M-3 Principal Distribution Amount on that Distribution Date), (v) the Class Certificate Balance of the Class M-4 Certificates (after taking into account the payment of the Class M-4 Principal Distribution Amount on that Distribution Date), (vi) the Class Certificate Balance of the Class M-5 Certificates (after taking into account the payment of the Class M-5 Principal Distribution Amount on that Distribution Date), (vii) the Class Certificate Balance of the Class M-6 Certificates (after taking into account the payment of the Class M-6 Principal Distribution Amount on that Distribution Date) and (viii) the Class Certificate Balance of the Class B-1 Certificates immediately prior to that Distribution Date over (b) the lesser of (i) the product of (A) 89.90% and (B) the Pool Principal Balance as of the last day of the related Due Period and (ii) the Pool Principal Balance as of the last day of the related Due Period minus the product of (A) 0.50% and (B) the Cut-off Date Pool Principal Balance.

Class B-1 Realized Loss Amortization Amount

As to the Class B-1 Certificates and as of any Distribution Date, the lesser of (a) the Unpaid Realized Loss Amount for the Class B-1 Certificates as of that Distribution Date and (b) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum of the amounts described in clauses (i) through (xxiii) of Section 4.02(d) for that Distribution Date.

Class B-2 Applied Realized Loss Amount

As to the Class B-2 Certificates and as of any Distribution Date, the lesser of (a) the Class Certificate Balance thereof (after taking into account the distribution of the Principal Distribution Amount on that Distribution Date, but prior to the application of the Class B-2 Applied Realized Loss Amount, if any, on that Distribution Date) and (b) the excess of (i) the Realized Loss Amount as of that Distribution Date over (ii) the Class B-3 Applied Realized Loss Amortization Amount as of that Distribution Date.

Class B-2 Certificate

Any Certificate executed and authenticated by the Trustee substantially in the form attached hereto as Exhibit A-4 and designated as a Class B-2 Certificate.

Class B-2 Principal Distribution Amount

As of any Distribution Date on or after the Stepdown Date and as long as a Trigger Event is not in effect, the excess of (a) the sum of (i) the sum of the Class Certificate Balances of the Senior Certificates (after taking into account the payment of the Senior Principal Distribution Amount on that Distribution Date), (ii) the Class Certificate Balance of the Class M-1 Certificates (after taking into account the payment of the Class M-1 Principal Distribution Amount on that Distribution Date), (iii) the Class Certificate Balance of the Class M-2 Certificates (after taking into account the payment of the Class M-2 Principal Distribution Amount on that Distribution Date), (iv) the Class Certificate Balance of the Class M-3 Certificates (after taking into account the payment of the Class M-3 Principal Distribution Amount on that Distribution Date), (v) the Class Certificate Balance of the Class M-4 Certificates (after taking into account the payment of the Class M-4 Principal Distribution Amount on that Distribution Date), (vi) the Class Certificate Balance of the Class M-5 Certificates (after taking into account the payment of the Class M-5 Principal Distribution Amount on that Distribution Date), (vii) the Class Certificate Balance of the Class M-6 Certificates (after taking into account the payment of the Class M-6 Principal Distribution Amount on that Distribution Date), (viii) the Class Certificate Balance of the Class B-1 Certificates (after taking into account the payment of the Class B-1 Principal Distribution Amount on that Distribution Date) and (ix) the Class Certificate Balance of the Class B-2 Certificates immediately prior to that Distribution Date over (b) the lesser of (i) the product of (A) 92.70% and (B) the Pool Principal Balance as of the last day of the related Due Period and (ii) the Pool Principal Balance as of the last day of the related Due Period minus the product of (A) 0.50% and (B) the Cut-off Date Pool Principal Balance.

Class B-2 Realized Loss Amortization Amount

As to the Class B-2 Certificates and as of any Distribution Date, the lesser of (a) the Unpaid Realized Loss Amount for the Class B-2 Certificates as of that Distribution Date and (b) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum of the amounts described in clauses (i) through (xxvi) of Section 4.02(d) for that Distribution Date.

Class B-3 Applied Realized Loss Amount

As to the Class B-3 Certificates and as of any Distribution Date, the lesser of (a) the Class Certificate Balance thereof (after taking into account the distribution of the Principal Distribution Amount on that Distribution Date, but prior to the application of the Class B-3 Applied Realized Loss Amount, if any, on that Distribution Date) and (b) the Realized Loss Amount as of that Distribution Date.

Class B-3 Certificate

Any Certificate executed and authenticated by the Trustee substantially in the form attached hereto as Exhibit A-4 and designated as a Class B-3 Certificate.

Class B-3 Principal Distribution Amount

As of any Distribution Date on or after the Stepdown Date and as long as a Trigger Event is not in effect, the excess of (a) the sum of (i) the sum of the Class Certificate Balances of the Senior Certificates (after taking into account the payment of the Senior Principal Distribution Amount on that Distribution Date), (ii) the Class Certificate Balance of the Class M-1 Certificates (after taking into account the payment of the Class M-1 Principal Distribution Amount on that Distribution Date), (iii) the Class Certificate Balance of the Class M-2 Certificates (after taking into account the payment of the Class M-2 Principal Distribution Amount on that Distribution Date), (iv) the Class Certificate Balance of the Class M-3 Certificates (after taking into account the payment of the Class M-3 Principal Distribution Amount on that Distribution Date), (v) the Class Certificate Balance of the Class M-4 Certificates (after taking into account the payment of the Class M-4 Principal Distribution Amount on that Distribution Date), (vi) the Class Certificate Balance of the Class M-5 Certificates (after taking into account the payment of the Class M-5 Principal Distribution Amount on that Distribution Date), (vii) the Class Certificate Balance of the Class M-6 Certificates (after taking into account the payment of the Class M-6 Principal Distribution Amount on that Distribution Date), (viii) the Class Certificate Balance of the Class B-1 Certificates (after taking into account the payment of the Class B-1 Principal Distribution Amount on that Distribution Date), (ix) the Class Certificate Balance of the Class B-2 Certificates (after taking into account the payment of the Class B-2 Principal Distribution Amount on that Distribution Date) and (x) the Class Certificate Balance of the Class B-3 Certificates immediately prior to that Distribution Date over (b) the lesser of (i) the product of (A) 97.50% and (B) the Pool Principal Balance as of the last day of the related Due Period and (ii) the Pool Principal Balance as of the last day of the related Due Period minus the product of (A) 0.50% and (B) the Cut-off Date Pool Principal Balance.

Class B-3 Realized Loss Amortization Amount

As to the Class B-3 Certificates and as of any Distribution Date, the lesser of (a) the Unpaid Realized Loss Amount for the Class B-3 Certificates as of that Distribution Date and (b) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum of the amounts described in clauses (i) through (xxix) of Section 4.02(d) for that Distribution Date.

Class Certificate Balance

With respect to any Class of Offered Certificates and as to any Distribution Date, the aggregate of the Certificate Balances of all Certificates of such Class as of such date. The Class Certificate Balance of the Class R Certificates shall be zero.

Class I Shortfalls

As defined in Section 2.07 hereof. For purposes of clarity, the aggregate Class I Shortfall for any Distribution Date shall equal the amount payable to the Swap Counterparty on such Distribution Date in excess of the amount payable with respect to the Class LT-Swap-IO on such Distribution Date. With respect to any Class of Offered Certificates, such shortfall will on any Distribution Date equal the excess, if any, of the amount of interest that would have accrued on such Class for the related Interest Accrual Period had its Pass-Through Rate been determined by substituting the REMIC 2 Net WAC Cap for the Net WAC Cap over the amount of interest actually accrued on such Class for such Accrual Period.

Class Interest Shortfall

As to any Distribution Date and any Class of Offered Certificates, the amount by which the amount described in the definition of Interest Distribution Amount for such Class exceeds the amount of interest actually distributed on such Class on such Distribution Date.

Class M-1 Applied Realized Loss Amount

As to the Class M-1 Certificates and as of any Distribution Date, the lesser of (a) the Class Certificate Balance thereof (after taking into account the distribution of the Principal Distribution Amount on that Distribution Date, but prior to the application of the Class M-1 Applied Realized Loss Amount, if any, on that Distribution Date) and (b) the excess of (i) the Realized Loss Amount as of that Distribution Date over (ii) the sum of the Class M-2 Applied Realized Loss Amount, the Class M-3 Applied Realized Loss Amount, the Class M-4 Applied Realized Loss Amount, the Class M-5 Applied Realized Loss Amount, the Class M-6 Applied Realized Loss Amount, the Class B-1 Applied Realized Loss Amount, the Class B-2 Applied Realized Loss Amount and the Class B-3 Applied Realized Loss Amount, in each case as of that Distribution Date.

Class M-1 Certificate

Any Certificate executed and authenticated by the Trustee substantially in the form attached hereto as Exhibit A-3 and designated as a Class M-1 Certificate.

Class M-1 Principal Distribution Amount

Class M-1 Realized Loss Amortization Amount

As to the Class M-1 Certificates and as of any Distribution Date, the lesser of (a) the Unpaid Realized Loss Amount for the Class M-1 Certificates as of that Distribution Date and (b) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum of the amounts described in clauses (i) through (v) of Section 4.02(d) for that Distribution Date.

Class M-2 Applied Realized Loss Amount

As to the Class M-2 Certificates and as of any Distribution Date, the lesser of (a) the Class Certificate Balance thereof (after taking into account the distribution of the Principal Distribution Amount on that Distribution Date, but prior to the application of the Class M-2 Applied Realized Loss Amount, if any, on that Distribution Date) and (b) the excess of (i) the Realized Loss Amount as of that Distribution Date over (ii) the sum of the Class M-3 Applied Realized Loss Amount, the Class M-4 Applied Realized Loss Amount, the Class M-5 Applied Realized Loss Amount, the Class M-6 Applied Realized Loss Amount, the Class B-1 Applied Realized Loss Amount, the Class B-2 Applied Realized Loss Amount and the Class B-3 Applied Realized Loss Amount, in each case as of that Distribution Date.

Class M-2 Certificate

Any Certificate executed and authenticated by the Trustee substantially in the form attached hereto as Exhibit A-3 and designated as a Class M-2 Certificate.

Class M-2 Principal Distribution Amount

Class M-2 Realized Loss Amortization Amount

As to the Class M-2 Certificates and as of any Distribution Date, the lesser of (a) the Unpaid Realized Loss Amount for the Class M-2 Certificates as of that Distribution Date and (b) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum of the amounts described in clauses (i) through (viii) of Section 4.02(d) for that Distribution Date.

Class M-3 Applied Realized Loss Amount

As to the Class M-3 Certificates and as of any Distribution Date, the lesser of (a) the Class Certificate Balance thereof (after taking into account the distribution of the Principal Distribution Amount on that Distribution Date, but prior to the application of the Class M-3 Applied Realized Loss Amount, if any, on that Distribution Date) and (b) the excess of (i) the Realized Loss Amount as of that Distribution Date over (ii) the sum of the Class M-4 Applied Realized Loss Amount, the Class M-5 Applied Realized Loss Amount, the Class M-6 Applied Realized Loss Amount, the Class B-1 Applied Realized Loss Amount, the Class B-2 Applied Realized Loss Amount and the Class B-3 Applied Realized Loss Amount, in each case as of that Distribution Date.

Class M-3 Certificate

Any Certificate executed and authenticated by the Trustee substantially in the form attached hereto as Exhibit A-3 and designated as a Class M-3 Certificate.

Class M-3 Principal Distribution Amount

Class M-3 Realized Loss Amortization Amount

As to the Class M-3 Certificates and as of any Distribution Date, the lesser of (a) the Unpaid Realized Loss Amount for the Class M-3 Certificates as of that Distribution Date and (b) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum of the amounts described in clauses (i) through (xi) of Section 4.02(d) for that Distribution Date.

Class M-4 Applied Realized Loss Amount

As to the Class M-4 Certificates and as of any Distribution Date, the lesser of (a) the Class Certificate Balance thereof (after taking into account the distribution of the Principal Distribution Amount on that Distribution Date, but prior to the application of the Class M-4 Applied Realized Loss Amount, if any, on that Distribution Date) and (b) the excess of (i) the Realized Loss Amount as of that Distribution Date over (ii) the sum of the Class M-5 Applied Realized Loss Amount, the Class M-6 Applied Realized Loss Amount, the Class B-1 Applied Realized Loss Amount, the Class B-2 Applied Realized Loss Amount and the Class B-3 Applied Realized Loss Amount, in each case as of that Distribution Date.

Class M-4 Certificate

Any Certificate executed and authenticated by the Trustee substantially in the form attached hereto as Exhibit A-3 and designated as a Class M-4 Certificate.

Class M-4 Principal Distribution Amount

Class M-4 Realized Loss Amortization Amount

As to the Class M-4 Certificates and as of any Distribution Date, the lesser of (a) the Unpaid Realized Loss Amount for the Class M-4 Certificates as of that Distribution Date and (b) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum of the amounts described in clauses (i) through (xiv) of Section 4.02(d) for that Distribution Date.

Class M-5 Applied Realized Loss Amount

As to the Class M-5 Certificates and as of any Distribution Date, the lesser of (a) the Class Certificate Balance thereof (after taking into account the distribution of the Principal Distribution Amount on that Distribution Date, but prior to the application of the Class M-5 Applied Realized Loss Amount, if any, on that Distribution Date) and (b) the excess of (i) the Realized Loss Amount as of that Distribution Date over (ii) the sum of the Class M-6 Applied Realized Loss Amount, the Class B-1 Applied Realized Loss Amount, the Class B-2 Applied Realized Loss Amount and the Class B-3 Applied Realized Loss Amount, in each case as of that Distribution Date.

Class M-5 Certificate

Any Certificate executed and authenticated by the Trustee substantially in the form attached hereto as Exhibit A-3 and designated as a Class M-5 Certificate.

Class M-5 Principal Distribution Amount

Class M-5 Realized Loss Amortization Amount

As to the Class M-5 Certificates and as of any Distribution Date, the lesser of (a) the Unpaid Realized Loss Amount for the Class M-5 Certificates as of that Distribution Date and (b) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum of the amounts described in clauses (i) through (xvii) of Section 4.02(d) for that Distribution Date.

Class M-6 Applied Realized Loss Amount

As to the Class M-6 Certificates and as of any Distribution Date, the lesser of (a) the Class Certificate Balance thereof (after taking into account the distribution of the Principal Distribution Amount on that Distribution Date, but prior to the application of the Class M-6 Applied Realized Loss Amount, if any, on that Distribution Date) and (b) the excess of (i) the Realized Loss Amount as of that Distribution Date over (ii) the sum of the Class B-1 Applied Realized Loss Amount, the Class B-2 Applied Realized Loss Amount and the Class B-3 Applied Realized Loss Amount, in each case as of that Distribution Date.

Class M-6 Certificate

Any Certificate executed and authenticated by the Trustee substantially in the form attached hereto as Exhibit A-3 and designated as a Class M-6 Certificate.

Class M-6 Principal Distribution Amount

As of any Distribution Date on or after the Stepdown Date and as long as a Trigger Event is not in effect, the excess of (a) the sum of (i) the sum of the Class Certificate Balances of the Senior Certificates (after taking into account the payment of the Senior Principal Distribution Amount on that Distribution Date), (ii) the Class Certificate Balance of the Class M-1 Certificates (after taking into account the payment of the Class M-1 Principal Distribution Amount on that Distribution Date), (iii) the Class Certificate Balance of the M-2 Certificates (after taking into account the payment of the Class M-2 Principal Distribution Amount on that Distribution Date), (iv) the Class Certificate Balance of the Class M-3 Certificates (after taking into account the payment of the Class M-3 Principal Distribution Amount on that Distribution Date), (v) the Class Certificate Balance of the Class M-4 Certificates (after taking into account the payment of the Class M-4 Principal Distribution Amount on that Distribution Date), (vi) the Class Certificate Balance of the Class M-5 Certificates (after taking into account the payment of the Class M-5 Principal Distribution Amount on that Distribution Date) and (vii) the Class Certificate Balance of the Class M-6 Certificates immediately prior to that Distribution Date over (b) the lesser of (i) the product of (A) 86.60% and (B) the Pool Principal Balance as of the last day of the related Due Period and (ii) the Pool Principal Balance as of the last day of the related Due Period minus the product of (A) 0.50% and (B) the Cut-off Date Pool Principal Balance.

Class M-6 Realized Loss Amortization Amount

As to the Class M-6 Certificates and as of any Distribution Date, the lesser of (a) the Unpaid Realized Loss Amount for the Class M-6 Certificates as of that Distribution Date and (b) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum of the amounts described in clauses (i) through (xx) of Section 4.02(d) for that Distribution Date.

Class R Certificates

The certificates representing the single “residual interest” in each of REMIC 1, REMIC 2 and REMIC 3, substantially in the form attached hereto as Exhibit B-1.

Class Unpaid Interest Amounts

As to any Distribution Date and any Class of Offered Certificates, the amount by which the aggregate Class Interest Shortfalls for such Class on prior Distribution Dates exceeds the amount of Class Unpaid Interest Amounts distributed on such Class on prior Distribution Dates plus interest on such amount at the related Pass-Through Rate.

Class X Certificate

Any Certificate executed and authenticated by the Trustee substantially in the form attached hereto as Exhibit B-2 and designated as a Class X Certificate.

Closing Date

September 28, 2006.

Closing Place

The offices of Stradley, Ronon, Xxxxxxx & Xxxxx, LLP, 0000 Xxx Xxxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000.

Code

The Internal Revenue Code of 1986, including any successor or amendatory provisions.

Collateral

The assets constituting the Loans, the Mortgage Files, the Trust Fund and the External Trust, and any and all contractual, legal, equitable or other rights in connection therewith, and all proceeds thereof (but not including payments of interest and principal due and payable with respect to the Loans on or before the Cut-off Date).

Collateral Value

With respect to any Loan, other than Refinance Loans, an amount equal to the lesser of (a) the appraised value of the related Mortgaged Property based on an appraisal obtained by the originator from an independent fee appraiser at the time of the origination of such Loan, and (b) if the Loan was originated either in connection with the acquisition of the Mortgaged Property by the borrower or within one year after acquisition of the Mortgaged Property by the borrower, the purchase price paid by such borrower for the Mortgaged Property. In the case of Refinance Loans (a) that are not Borrower Retention Loans, the Collateral Value is the appraised value of the Mortgaged Property based upon the appraisal obtained at the time of refinancing and (b) that are Borrower Retention Loans, the Collateral Value is the value of the mortgaged property determined as follows (i) if the Refinance Loan is not a cash-out refinance mortgage loan, the value of the mortgaged property is typically determined using an existing appraisal that is no more than twenty-four months old; however, if the existing appraisal is more than twenty-four months old, the value of the mortgaged property based on the existing appraisal is validated through the use of an AVM at the time of the refinancing, and if the AVM evidences that the value of the mortgage property has materially declined, a new appraisal is required at the time of refinancing, and the value of the mortgaged property is determined using this new appraisal, and (ii) if the Refinance Loan is a cash-out refinance mortgage loan, the value of the mortgaged property is determined using an existing appraisal that is no more than twenty-four months old, and the existing appraisal value is validated through the use of an AVM at the time of the refinancing; if the AVM evidences that the value of the mortgaged property has materially declined, or if the existing appraisal is more than twenty-four months old, a new appraisal is required at the time of refinancing, and the value of the mortgaged property is determined using this new appraisal.

Combined Loan-to-Value Ratio

With respect to any Loan and as to any date of determination, the fraction, expressed as a percentage, the numerator of which is the principal balance of such Loan at the date of origination plus, in the case of a Second Lien Loan, the outstanding principal balance of the related first lien mortgage loan on the date of origination of such Second Lien Loan, and the denominator of which is the Collateral Value of the related Mortgaged Property.

Commission

The Securities and Exchange Commission.

Corporate Trust Office

The designated office of the Trustee in the State of New York at which (a) its corporate trust business with respect to this Agreement shall be administered is located at JPMorgan Chase Bank, 4 New York Plaza, 6th Floor, New York, New York 10004, Attention: Worldwide Securities Services/Structured Finance Services, Popular ABS 2006-D and (b) Certificates may be presented for transfer and exchange and for purposes of presentment and surrender for the final distributions thereon is located at 0000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxxxxx Xxxxx 00000 Attention: Structured Finance Transfer Department Popular ABS 2006-D, or such other address as the Trustee shall notify the Depositor, the Servicer, the Sellers and the Certificateholders.

Corresponding Class

As defined in the Preliminary Statement.

Custodial Agreement

As defined in Section 8.13.

Custodian

As defined in Section 8.13.

Cut-off Date

September 1, 2006.

Cut-off Date Pool Principal Balance

$372,742,242.26.

Cut-off Date Principal Balance

As to any Loan, the Stated Principal Balance thereof as of the close of business on August 31, 2006 giving effect to scheduled payments of principal and interest due on September 1, 2006, whether or not those scheduled payments have been made.

Defective Loan

Any Loan which is required to be repurchased pursuant to Section 2.02 or 2.03.

Deficient Valuation

With respect to any Loan, a valuation of the related Mortgaged Property by a court of competent jurisdiction in an amount less than the then outstanding principal balance of the Loan, which valuation results from a proceeding initiated under the Bankruptcy Code.

Definitive Certificates</

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Popular ABS, Inc. Depositor Equity One, Inc., a Delaware corporation A Seller and the Servicer Equity One, Incorporated Equity One, Inc., a Minnesota corporation Equity One Consumer Loan Company, Inc., a New Hampshire corporation and Popular Financial...