DBRS Rates Nomura Home Equity Loan, Inc., Home Equity Loan Trust, Series 2006-HE3

Dominion Bond Rating Service (DBRS) has today assigned the following ratings to the Asset-Backed Certificates, Series 2006-HE3 issued by Nomura Home Equity Loan, Inc., Home Equity Loan Trust, Series 2006-HE3.

-$441.7 million Class I-A-1 rated at AAA
-$253.4 million Class II-A-1 rated at AAA
-$26.8 million Class II-A-2 rated at AAA
-$71.4 million Class II-A-3 rated at AAA
-$16.6 million Class II-A-4 rated at AAA
-$43.5 million Class M-1 rated at AA (high)
-$40.3 million Class M-2 rated at AA
-$24.7 million Class M-3 rated at AA (low)
-$21.5 million Class M-4 rated at A (high)
-$19.9 million Class M-5 rated at A (high)
-$18.3 million Class M-6 rated at A
-$17.2 million Class M-7 rated at A (low)
-$15.0 million Class M-8 rated at BBB (high)
-$11.3 million Class M-9 rated at BBB
-$10.7 million Class B-1 rated at BBB (low)
-$10.7 million Class B-2 rated at BB (high)

The AAA ratings on the Class A Certificates reflect 24.65% of credit enhancement provided by the subordinate classes, initial and target overcollateralization (2.95% of the aggregate balance of the mortgage loans as of the cut-off date), and monthly excess spread. The AA (high) rating on Class M-1 reflects 20.60% of credit enhancement. The AA rating on Class M-2 reflects 16.85% of credit enhancement. The AA (low) rating on Class M-3 reflects 14.55% of credit enhancement. The A (high) rating on Class M-4 reflects 12.55% of credit enhancement. The A (high) rating on Class M-5 reflects 10.70% of credit enhancement. The “A” rating on Class M-6 reflects 9.00% of credit enhancement. The A (low) rating on Class M-7 reflects 7.40% of credit enhancement. The BBB (high) rating on Class M-8 reflects 6.00% of credit enhancement. The BBB rating on Class M-9 reflects 4.95% of credit enhancement. The BBB (low) rating on Class B-1 reflects 3.95% of credit enhancement. The BB (high) rating on Class B-2 reflects 2.95% of credit enhancement.

The ratings on the certificates also reflect the quality of the underlying assets and the capabilities of Ocwen Loan Servicing, LLC (99.29%) and Wells Fargo Bank, N.A., (0.71%) as Servicers, as well as the integrity of the legal structure of the transaction. HSBC Bank USA, N.A., will act as Trustee. The trust will enter into an interest rate swap agreement with Swiss Re Financial Products Corporation (the Swap Provider). The trust will pay to the Swap Provider a fixed payment of 5.375% per annum in exchange for a floating payment at LIBOR from the Swap Provider.

Interest and principal payments collected from the mortgage loans will be distributed on the 25th day of each month commencing in September 2006. Interest will be paid first to the Class A Certificates on a pro rata basis and then sequentially to the subordinate certificates. Until the step-down date, principal collected will be paid exclusively to the Class A Certificates unless their respective note balances have been reduced to zero. After the step-down date, and provided that certain performance tests have been met, principal payments will be distributed among all classes on a pro rata basis. Additionally, provided that certain performance tests have been met, the level of overcollateralization may be allowed to step down to 5.90% of the then-current balance of the mortgage loans but no less than 0.50% of the original collateral balance.

All mortgage loans in the Underlying Trust were originated or acquired by People’s Choice Home Loan Inc. (38.19%) and First NLC Financial Services, LLC (14.47%), among others. As of the cut-off date (August 1, 2006), the aggregate principal balance of the mortgage loans is $1,074,928,098. The weighted-average mortgage rate is 8.160%, the weighted-average FICO is 621, and the weighted-average combined loan-to-value ratio is 85.69%.

Note: All figures are in U.S. dollars unless otherwise noted.

For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.

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