car ring ton mortgage loan trust, series 2006-nc5

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424B2 1 v059727_424b2.htmInformation contained herein is subject to completion or amendment. A registration statement relating to these securities has been filed with theSecurities and Exchange Commission. This prospectus will not constitute an offer to sell or a solicitation of an offer to buy nor will there be anysale of the offered certificates in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under

the securities laws of such state.

SUBJECT TO COMPLETION, DATED DECEMBER 5, 2006

Prospectus Supplement dated December __, 2006 (To Prospectus dated October 4, 2006)$1,158,238,000 (Approximate)

Stanwich Asset Acceptance Company, L.L.C.Depositor

Carrington Mortgage Loan Trust, Series 2006-NC5Issuing Entity

Carrington Securities, LPSponsor

New Century Mortgage CorporationServicer

Carrington Mortgage Loan Trust, Series 2006-NC5Asset-Backed Pass-Through Certificates

Offered Certificates

The trust will consist primarily of a pool of one- to four-family adjustable-rate and fixed-rate, interest-only,balloon and fully-amortizing, first lien and second lien, closed-end, subprime mortgage loans. The trust will issuefive classes of senior certificates, the Class A Certificates, designated Class A-1, Class A-2, Class A-3, Class A-4and Class A-5, and ten classes of mezzanine certificates, the Class M Certificates, designated Class M-1, Class M-2,Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class M-10. Only the Class ACertificates and Class M Certificates (other than the Class M-10 Certificates) are offered by this prospectussupplement and are more fully described in the table on page S-8 of this prospectus supplement.

Credit Enhancement

Credit enhancement for the offered certificates consists of:

yexcess cash flow and overcollateralization; and

y subordination provided to the Class A Certificates by the Class M Certificates, and subordination providedto the Class M Certificates by each class of Class M Certificates with a lower payment priority.


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The trust will also enter into a swap agreement for the benefit of the Class A Certificates and Class M Certificates.

Distributions on the certificates will be on the 25th of each month or, if the 25th is not a business day, on the nextbusiness day, beginning January 25, 2007.

You should consider carefully the risk factors beginning on page S-18 in this prospectus supplement.

Neither the Securities and Exchange Commission nor any state securities commission has approved or

disapproved of the offered certificates or determined that this prospectus supplement or the prospectus isaccurate or complete. Any representation to the contrary is a criminal offense.

The Attorney General of the State of NewYork has not passed on or endorsed the merits of this

offering. Any representation to the contrary is unlawful.

The certificates represent interests only in the trust, as the issuing entity, and do not represent interests in orobligations of Stanwich Asset Acceptance Company, L.L.C., as the depositor, Carrington Securities, LP, as the

sponsor, or any of their affiliates.

Class(1)

Initial

Certificate

Principal

Balance(2)

Price to

PublicUnderwriting

Discount

Proceeds to

the

Depositor(3) Class(1)

Initial

Certificate

Principal

Balance(2)

Price to

PublicUnderwriting

Discount

Proceeds to

the

Depositor(3)

Class A-1 $224,055,000______% ______% ______%Class M-3 $ 22,508,000______% ______% ______%Class A-2 $129,862,000______% ______% ______%Class M-4 $ 32,849,000______% ______% ______%Class A-3 $147,713,000______% ______% ______%Class M-5 $ 24,941,000______% ______% ______%Class A-4 $ 37,481,000______% ______% ______%Class M-6 $ 17,033,000______% ______% ______%Class A-5 $332,000,000______% ______% ______%Class M-7 $ 21,291,000______% ______% ______%Class M-1 $ 69,957,000______% ______% ______%Class M-8 $ 13,383,000______% ______% ______%Class M-2 $ 66,915,000______% ______% ______%Class M-9 $ 18,250,000______% ______% ______%

________________(1) The pass-through rates on such classes will be based on one-month LIBOR plus the applicable margin, subject to certain caps as described

in this prospectus supplement.(2) Approximate, subject to the variance in the outstanding principal balance of the mortgage loans described in the second paragraph of

Description of the Mortgage PoolGeneral in this prospectus supplement.(3) Before deducting expenses payable by the depositor estimated to be approximately $1,520,000.

Bear, Stearns & Co. Inc.(Lead Manager)

JPMorgan(Co-Manager)

Carrington Investment Services, LLC(Selected Dealer)

Important Notice About Information Presented in this ProspectusSupplement and the Accompanying Prospectus

We provide information to you about the offered certificates in two separate documents that provideprogressively more detail:

y the accompanying prospectus, which provides general information, some of which may not applyto your series of certificates; and


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y this prospectus supplement, including Annex I attached hereto, which describes the specific termsof your series of certificates.

The depositors principal offices are located at Seven Greenwich Office Park, 599 West Putnam Avenue,Greenwich, Connecticut 06830 and its telephone number is (203) 661-6186.

The information in this prospectus supplement is preliminary, and is subject to completion or change. Thisprospectus is being delivered to you solely to provide you with information about the offering of the offeredcertificates referred to in this prospectus and to solicit an offer to purchase the offered certificates, when, as and ifissued. Any such offer to purchase made by you will not be accepted and will not constitute a contractualcommitment by you to purchase any of the certificates, until we have accepted your offer to purchase the offeredcertificates.

The certificates referred to in these materials are being sold when, as and if issued. The issuer is notobligated to issue such certificates or any similar security and the underwriters obligation to deliver such offeredcertificates is subject to the terms and conditions of the underwriting agreement with the issuer and the availabilityof such certificates when, as and if issued by the issuer. You are advised that the terms of the certificates, and thecharacteristics of the mortgage loan pool backing them, may change (due, among other things, to the possibility thatmortgage loans that comprise the pool may become delinquent or defaulted or may be removed or replaced and that

similar or different mortgage loans may be added to the pool, and that one or more classes of certificates may besplit, combined or eliminated), at any time prior to issuance or availability of a final prospectus. You are advisedthat certificates may not be issued that have the characteristics described in these materials. The underwritersobligation to sell such offered certificates to you is conditioned on the mortgage loans and offered certificates havingthe characteristics described in these materials. If for any reason the issuer does not deliver such certificates, theunderwriter will notify you, and neither the issuer nor any underwriter will have any obligation to you to deliver allor any portion of the offered certificates which you have committed to purchase, and none of the issuer nor anyunderwriter will be liable for any costs or damages whatsoever arising from or related to such non-delivery.

S-2

TABLE OF CONTENTS

PageSUMMARY S-5RISK FACTORS S-18Risks Associated with the Mortgage Loans S-18Limited Obligations S-25Liquidity Risks S-27Special Yield and Prepayment Considerations S-28Bankruptcy Risks S-33ISSUING ENTITY S-35SPONSOR S-35AFFILIATIONS AMONG TRANSACTION PARTIES S-36DESCRIPTION OF THE MORTGAGE POOL S-36

General S-36The Index S-38Mortgage Loan Characteristics S-39Static Pool Information S-78Delinquency Experience on the Mortgage Loans S-78Credit Scores S-78The Originators S-79Additional Information S-85THE SWAP COUNTERPARTY S-86DESCRIPTION OF THE CERTIFICATES S-88


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General S-88Glossary of Terms S-89Distributions on the Certificates S-104Interest Distributions S-105Determination of One-Month LIBOR S-105Principal Distributions S-106

Net Monthly Excess Cash Flow and Overcollateralization S-107The Swap Agreement S-109Allocation of Losses S-113Advances S-115Residual Interests S-116Reports to Certificateholders S-116Rights of the Holders of the Class CE Certificates S-116YIELD AND PREPAYMENT CONSIDERATIONS S-116General S-116Prepayment Considerations S-117Allocation of Principal Distributions S-119Realized Losses and Interest Shortfalls S-120Pass-Through Rates S-121Purchase Price S-122Final Scheduled Distribution Dates S-122Weighted Average Life S-123POOLING AND SERVICING AGREEMENT S-143General S-143Custodial Arrangements S-143The Servicer S-143Servicing Compensation and Payment of Expenses S-145Events of Default S-146Voting Rights S-146Termination S-146The Trustee S-147LEGAL PROCEEDINGS S-149MATERIAL FEDERAL INCOME TAX CONSEQUENCES S-151

Characterization of the Offered Certificates S-153Allocation S-154The Notional Principal Contract Component S-154Sale or Exchange of Offered Certificates S-155Status of the Offered Certificates S-155USE OF PROCEEDS S-156METHOD OF DISTRIBUTION S-156

S-3

TABLE OF CONTENTS(continued)

PageLEGAL OPINIONS S-158RATINGS S-158LEGAL INVESTMENT S-159CERTAIN ERISA CONSIDERATIONS S-159Class A-1 Certificates and Class A-2 Certificates S-159Class A-3 Certificates, Class A-4 Certificates, Class A-5 Certificates and Class M Certificates S-162ANNEX I GLOBAL CLEARANCE, SETTLEMENT AND TAX DOCUMENTATION PROCEDURES I-1Initial Settlement I-1


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Secondary Market Trading I-2Certain U.S. Federal Income Tax Documentation Requirements I-4

S-4

Summary

The following summary provides a brief description of material aspects of this offering, and does not contain all ofthe information that you should consider in making your investment decision. To understand the terms of the offeredcertificates, you should read carefully this entire document and the prospectus.

Issuing entity Carrington Mortgage Loan Trust, Series 2006-NC5.

Title of the offered certificates Carrington Mortgage Loan Trust, Series 2006-NC5 Asset-Backed Pass-ThroughCertificates.

Depositor and Issuer Stanwich Asset Acceptance Company, L.L.C.

Sponsor Carrington Securities, LP.

Originators New Century Mortgage Corporation, a California Corporation, and Home123Corporation, a California Corporation.

Servicer New Century Mortgage Corporation.

Trustee Wells Fargo Bank, N.A.

Swap Counterparty Swiss Re Financial Products Corporation.

Responsible Party NC Capital Corporation. The responsible party makes certain representations and

warranties with respect to the mortgage loans and has certain obligations withrespect to the repurchase and substitution of the mortgage loans.

See Description of the Mortgage PoolGeneral in this prospectus

supplement.

Mortgage pool 5,361 mortgage loans consisting of adjustable-rate and fixed-rate, interest-only,balloon and fully-amortizing, first lien and second lien, closed-end, subprimemortgage loans with an aggregate principal balance of approximately$1,216,634,845 as of the cut-off date after application of scheduled payments dueon or before the cut-off date whether or not received and subject to a permittedvariance of plus or minus 5%.

Cut-off date The close of business on December 1, 2006.

Closing date On or about December 19, 2006.

Distribution dates On the 25th of each month or, if the 25th is not a business day, on the nextbusiness day, beginning in January 2007.


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S-5

Final scheduled distribution date The final scheduled distribution date with respect to the Class A-1, Class A-2,Class A-3, Class A-4 and Class A-5 Certificates will be the distribution datein February 2031, March 2036, October 2036, November 2036 and March 2036,respectively. The final scheduled distribution date with respect to the Class M

Certificates will be the distribution date in January 2037. The actual finaldistribution date with respect to any class of certificates could be substantiallyearlier.

See Certain Yield and Prepayment Considerations in this prospectus

supplement.

Form of offered certificates Book-entry.

See Description of the CertificatesBook-Entry Registration of the Offered

Certificates in this prospectus supplement.

Minimum denominations Class A and Class M-1 Certificates: $100,000 and integral multiples of $1 inexcess thereof.

Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8and Class M-9 Certificates: $250,000 and integral multiples of $1 in excessthereof.

ERISA Considerations Subject to the considerations described in Certain ERISA Considerations inthis prospectus supplement and in the accompanying prospectus, the Class A-1and the Class A-2 Certificates are expected to be eligible for purchase by personsinvesting assets of employee benefit plans, individual retirement accounts orother retirement accounts or arrangements, provided that certain conditions aremet. The depositor does not intend to rely on the Exemption, as describedinCertain ERISA Considerations in the prospectus, for the purchase andholding of the Class A-1 or the Class A-2 Certificates prior to the termination ofthe swap agreement in January 2011. Fiduciaries of plans subject to ERISA orSection 4975 of the Internal Revenue Code are encouraged to consult with theirlegal advisors before investing in the Class A-1 or the Class A-2 Certificates.

S-6

Until the swap agreement terminates in January 2011, the Class A-3, the Class A-4, the Class A-5 and the Class M Certificates may not be purchased by ortransferred to Benefit Plans (as defined in this prospectus supplementunderCertain ERISA Considerations ). Each purchaser and transferee of a

Class A-3 , a Class A-4, a Class A-5 or a Class M Certificate or any interesttherein will be deemed to have represented, by virtue of its acquisition or holdingof such certificate or any interest therein, that it is not a Benefit Plan (as definedin this prospectus supplement underCertain ERISA Considerations ).

See Certain ERISA Considerations in this prospectus supplement and in the

accompanying prospectus.

Legal investment The offered certificates will not constitute mortgage related securities for


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purposes of the Secondary Mortgage Market Enhancement Act of 1984, orSMMEA.

See Legal Investment in this prospectus supplement and Legal InvestmentMatters in the prospectus.

S-7

Offered Certificates

Class Pass-Through Rate(1)Initial Certificate

Principal Balance(2)Initial Rating

(S&P/Moodys/Fitch) (3) DesignationsFinal Scheduled

Distribution DateClass A Certificates:

A-1 Adjustable $224,055,000 AAA/Aaa/AAA Senior/Adjustable Rate February 25, 2031A-2 Adjustable 129,862,000 AAA/Aaa/AAA Senior/Adjustable Rate March 25, 2036A-3 Adjustable 147,713,000 AAA/Aaa/AAA Senior/Adjustable Rate October 25, 2036A-4 Adjustable 37,481,000 AAA/Aaa/AAA Senior/Adjustable Rate November 25, 2036A-5 Adjustable 332,000,000 AAA/Aaa/AAA Senior/Adjustable Rate March 25, 2036

Total Class A Certificates: $871,111,000Class M Certificates:

M-1 Adjustable $69,957,000 AA+/Aa1/AA+ Mezzanine/Adjustable Rate January 25, 2037M-2 Adjustable 66,915,000 AA/Aa1/AA Mezzanine/Adjustable Rate January 25, 2037M-3 Adjustable 22,508,000 AA-/Aa2/AA Mezzanine/Adjustable Rate January 25, 2037M-4 Adjustable 32,849,000 A+/Aa3/A+ Mezzanine/Adjustable Rate January 25, 2037M-5 Adjustable 24,941,000 A/A1/A Mezzanine/Adjustable Rate January 25, 2037M-6 Adjustable 17,033,000 A-/A2/A- Mezzanine/Adjustable Rate January 25, 2037M-7 Adjustable 21,291,000 BBB+/A3/BBB+ Mezzanine/Adjustable Rate January 25, 2037M-8 Adjustable 13,383,000 BBB/Baa1/BBB Mezzanine/Adjustable Rate January 25, 2037M-9 Adjustable 18,250,000 BBB-/Baa2/BBB Mezzanine/Adjustable Rate January 25, 2037

Total Offered Class M

Certificates:$287,127,000

Total Offered Certificates: $1,158,238,000

Non-Offered CertificatesM-10 Adjustable $21,291,000 BB+/Baa3/BB+ Mezzanine/Adjustable Rate January 25, 2037CE N/A 37,105,745 NR Subordinate N/AP N/A 100 NR Prepayment Charges N/A

R-I N/A N/A NR Residual N/AR-II N/A N/A NR Residual N/A

Total non-offered certificates: $58,396,845Total offered andnon-offered certificates:

$1,216,634,845

_______________________(1) See the description of Pass-Through Rates on the following page.(2) Approximate, subject to the variance in the outstanding principal balance of the mortgage loans described in the second paragraph

ofDescription of the Mortgage PoolGeneral in this prospectus supplement.(3) It is a condition to the issuance of the offered certificates that they be given at least the ratings listed above.

S-8

Other Information:

Only the offered certificates are offered for sale pursuant to this prospectus supplement and the related prospectus.The non-offered certificates will not be offered hereby.


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Pass-Through Rates:

The pass-through rate on each class of Class A and Class M Certificates will be the least of:

y a per annum rate equal to one-month LIBOR plus the related margin;

y a per annum rate equal to the weighted average of the net mortgage rates on the then outstanding mortgageloans (after taking into account any net swap payments owed to the swap counterparty or swap termination

payments owed to the swap counterparty not due to a swap counterparty trigger event), adjusted to a rate basedon the actual number of days in a month and a 360-day year; and

y 14.50% per annum.

Related Margin (%)

Class (1) (2)A-1 _____% _____%A-2 _____% _____%A-3 _____% _____%A-4 _____% _____%A-5 _____% _____%M-1 _____% _____%M-2 _____% _____%M-3 _____% _____%M-4 _____% _____%M-5 _____% _____%M-6 _____% _____%M-7 _____% _____%M-8 _____% _____%M-9 _____% _____%

M-10 _____% _____%________________________

(1) For the interest accrual period for each distribution date through and including the first distributiondate on which the aggregate principal balance of the mortgage loans remaining in the mortgage pool isreduced to less than 10% of the aggregate principal balance of the mortgage loans as of the cut-offdate.

(2) For each interest accrual period thereafter.

S-9

The Trust

The depositor will establish a trust with respect to the Series 2006-NC5 Certificates. On the closing date, thedepositor will deposit the pool of mortgage loans described in this prospectus supplement into the trust. In addition,the trust will enter into a swap agreement for the benefit of the Class A Certificates and Class M Certificates. Eachcertificate will represent a partial ownership interest in the trust.

The Mortgage Pool


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The mortgage loans will consist of 5,361 adjustable-rate and fixed-rate, interest-only, balloon and fully-amortizing,first lien and second lien, closed-end, subprime mortgage loans. The mortgage loans to be deposited into the trustwill have the following approximate characteristics as of the cut-off date:

Range Weighted Average

Principal balance $29,946 to $1,497,653 $226,942*Mortgage rate 5.500% to 12.625% 8.272%

Remaining term to stated maturity (months) 118 to 360 358

* Principal balance is an average.

The properties securing the mortgage loans include attached or detached, one- to four- family dwelling units,individual condominium units and modular homes.

The interest rate on each adjustable-rate mortgage loan will adjust on each adjustment date to equal the sum of therelated index and the related note margin on the mortgage note, subject to periodic rate caps and a maximum andminimum interest rate, as described in this prospectus supplement.

The securities described on the table on page S-8 are the only securities backed by this mortgage pool that will beissued.

For additional information regarding the mortgage pool, see Description of the Mortgage Pool in this prospectus

supplement.

Servicing

New Century Mortgage Corporation will service the mortgage loans, as more fully described under Pooling andServicingAgreement herein.

The servicing fees for each mortgage loan are payable out of the interest payments on that mortgage loan prior topayments to certificateholders. The servicing fees consist of servicing fees payable to the servicer, which arepayable with respect to each mortgage loan at a rate of 0.500% per annum, and other related compensation payableto the servicer including assumption fees, late payment charges and other miscellaneous servicing fees (except for

prepayment charges which, to the extent collected from mortgagors, will be distributed to the holders of the Class PCertificates).

Repurchases or Substitutions of Mortgage Loans

If NC Capital Corporation, as responsible party, or the sponsor cannot cure a breach of any representation orwarranty made by it and assigned to the trustee for the benefit of the certificateholders relating to a mortgage loanwithin 90 days of notice given to the responsible party or the sponsor, and the breach materially and adversely

affects the interests of the certificateholders in the mortgage loan, the responsible party or the sponsorwill beobligated to purchase the mortgage loan at a price equal to its principal balance as of the date of purchase plusaccrued and unpaid interest to the end of the calendar month of the repurchase, less the amount payable in respect ofservicing compensation or reimbursement.

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Likewise, as described underDescription of the CertificatesReview of Mortgage Loan Documents in theprospectus, if the mortgage collateral seller cannot cure certain documentary defects with respect to a mortgage loan,the mortgage collateral seller will be required to repurchase the related mortgage loan. If the conditions describedunderThe Trusts - Limited Right ofSubstitution in the prospectus are satisfied, a substitution may be made in lieuof such repurchase obligation. See The TrustsRepurchases of Mortgage Collateral in the prospectus.

Distributions on the Class A and Class M Certificates

Amount available for monthly distribution. On each distribution date, the trustee will make distributions toinvestors. The amounts available for distribution will include:

y collections of monthly payments on the mortgage loans, including prepayments and other unscheduledcollections;plus

y all payments of compensating interest made by the servicer with respect to the mortgage loans;plus

y advances for delinquent payments on the mortgage loans that are deemed recoverable by the servicer; minus

y net swap payments payable to the swap counterparty and net swap termination payments payable to the swapcounterparty not due to a swap counterparty trigger event; minus

y fees and expenses of the trustee and the servicer for the mortgage loans, including reimbursement for advances.

In addition, certificateholders will be entitled to amounts, if any, available under the swap agreement.

See Description of the CertificatesGlossary of TermsAvailable Distribution Amount and Swap

AgreementPayments under the Swap Agreement in this prospectus supplement.

Priority of Distributions. Payments to the certificateholders will be made from the available distribution amount as

follows:

Priority of Distributions

Priority ofPayment

Pro rata, Class A Certificate interestSequentially, Class M Certificate interestSequentially orpro rata, as set forth herein, Class ACertificate principalSequentially or to expected target, as set forth herein,Class M Certificate principal

Net monthly excess cash flow from mortgage loans asdescribed in this prospectus supplement

See Description of the CertificatesInterest Distributions, Principal Distributions and Net Monthly

Excess Cash Flow and Overcollateralization in this prospectus supplement.

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Interest Distributions. The amount of interest owed to each class of Class A and Class M Certificates on eachdistribution date will equal:

y the pass-through rate for that class of certificates; multiplied by

y the certificate principal balance of that class of certificates as of the day immediately prior to the relateddistribution date; multiplied by

y the actual number of days in the related interest accrual period divided by 360; minus

y the share of some types of interest shortfalls allocated to that class, as described more fully in the definition ofInterest Distribution Amount in Description of the Certificates - Glossary of Terms in this prospectus

supplement.

See Description of the CertificatesInterest Distributions in this prospectus supplement.

Allocations of Principal. Principal distributions on the certificates will be made primarily from principal paymentson the mortgage loans as follows:

On each distribution date (a) prior to a stepdown date or (b) on which a trigger event is in effect, principaldistributions will be distributed in the following order of priority:

y concurrently, on a pro rata basis (based on the certificate principal balance of the Class A-5 Certificates, on theone hand, and the aggregate certificate principal balance of the Class A-1 Certificates and Class A-2Certificates, on the other hand), as follows:

y to the holders of the Class A-5 Certificates, until the certificate principal balance of the Class A-5Certificates has been reduced to zero; and

y sequentially, to the holders of the Class A-1 Certificates and Class A-2 Certificates, in that order, until thecertificate principal balance of each such class has been reduced to zero;

y sequentially, to the holders of the Class A-3 Certificates and Class A-4 Certificates, in that order, until thecertificate principal balance of each such class has been reduced to zero; and

y sequentially, to the holders of the Class M-1 Certificates, Class M-2 Certificates, Class M-3 Certificates, ClassM-4 Certificates, Class M-5 Certificates, Class M-6 Certificates, Class M-7 Certificates, Class M-8 Certificates,Class M-9 Certificates and Class M-10 Certificates, in that order, until the certificate principal balance of eachsuch class has been reduced to zero.

On each distribution date (a) on or after the stepdown date and (b) on which a trigger event is not in effect, theprincipal distributions will be distributed in the following order of priority:

y to the holders of the Class A-1 Certificates, Class A-2 Certificates, Class A-3 Certificates, Class A-4Certificates and Class A-5 Certificates, up to an amount equal to the Class A principal distribution amount, inthe following order of priority:

y concurrently, on a pro rata basis (based on the certificate principal balance of the Class A-5 Certificates, onthe one hand, and the aggregate certificate principal balance of the Class A-1 Certificates and Class A-2


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Certificates, on the other hand), as follows:

S-12

y

to the holders of the Class A-5 Certificates, until the certificate principal balance of the Class A-5Certificates has been reduced to zero; and

y sequentially, to the holders of the Class A-1 Certificates and Class A-2 Certificates, in that order, untilthe certificate principal balance of each such class has been reduced to zero;

y sequentially, to the holders of the Class A-3 Certificates and Class A-4 Certificates, in that order, until thecertificate principal balance of each such class has been reduced to zero; and

y sequentially, to the holders of the Class M-1 Certificates, Class M-2 Certificates, Class M-3 Certificates, ClassM-4 Certificates, Class M-5 Certificates, Class M-6 Certificates, Class M-7 Certificates, Class M-8 Certificates,Class M-9 Certificates and Class M-10 Certificates, in that order, up to an amount equal to the related Class M

principal distribution amount until the certificate principal balance of each such class has been reduced to zero.

On or after the occurrence of the first distribution date on which the aggregate certificate principal balance of theClass M and Class CE Certificates has been reduced to zero, all priorities relating to distributions as described in thissection of the Summary entitled Allocations of Principal in respect of principal among the Class A Certificateswill be disregarded, and principal distributions will be distributed to the remaining Class A Certificates on aprorata basis in accordance with their respective outstanding certificate principal balances.

See Description of the CertificatesGlossary of TermsTrigger Event in this prospectus supplement.

Allocations of Net Monthly Excess Cash Flow. In addition, the Class A and Class M Certificates will receivedistributions of principal and interest to reimburse allocated realized losses and net WAC rate carryover amounts tothe extent of any net monthly excess cash flow from the mortgage loans available to cover specified amounts, as and

to the extent described in this prospectus supplement.

Net monthly excess cash flow, if any, will be applied on any distribution date as follows:

y distribution of additional principal in order to maintain the required level of overcollateralization;

y distribution sequentially to the Class M-1 Certificates, Class M-2 Certificates, Class M-3 Certificates, Class M-4 Certificates, Class M-5 Certificates, Class M-6 Certificates, Class M-7 Certificates, Class M-8 Certificates,Class M-9 Certificates and Class M-10 Certificates, in that order, in each case up to the related interest carryforward amount related to these certificates for the related distribution date;

y distribution firstpro rata to the Class A Certificates, then sequentially to the Class M-1 Certificates, Class M-2Certificates, Class M-3 Certificates, Class M-4 Certificates, Class M-5 Certificates, Class M-6 Certificates,Class M-7 Certificates, Class M-8 Certificates, Class M-9 Certificates and Class M-10 Certificates, in thatorder, in each case up to the related allocated realized loss amount for these classes for the related distributiondate;

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y to the Class A and Class M Certificates, any related unpaid net WAC rate carryover amount, distributed to theClass A Certificates on apro rata basis based on the remaining net WAC rate carryover amount for each suchclass and then to the Class M Certificates in their order of payment priority;

y to the swap counterparty, payment in respect of any swap termination payment triggered by a swap counterpartytrigger event;

y to the holders of the Class CE Certificates as provided in the pooling and servicing agreement; and

y to the holders of the Class R Certificates, any remaining amounts; provided that if the related distribution date isthe distribution date immediately following the expiration of the latest prepayment charge term or anydistribution date thereafter, then any of these remaining amounts will be distributed first to the Class PCertificates, until the certificate principal balance thereof has been reduced to zero, and second to the holders ofthe Class R Certificates.

See Description of the CertificatesPrincipal Distributions and Net Monthly Excess Cash Flow and

Overcollateralization in this prospectus supplement.

Allocation of Losses. Realized losses will be allocated or covered in full for each distribution date:

y irst, to any excess cash flow for such distribution date;

y second, by any amounts available from the swap agreement for the related distribution date;

y third, to the first listed class with a certificate principal balance greater than zero, in the following order: ClassCE Certificates, Class M-10 Certificates, Class M-9 Certificates, Class M-8 Certificates, Class M-7 Certificates,Class M-6 Certificates, Class M-5 Certificates, Class M-4 Certificates, Class M-3 Certificates, Class M-2Certificates and Class M-1 Certificates; and

y ourth, concurrently to the Class A-1 Certificates, Class A-2 Certificates, Class A-3 Certificates, Class A-4Certificates and Class A-5 Certificates on apro rata basis based on the certificate principal balance of each suchclass with a certificate principal balance greater than zero.

Credit Enhancement

The credit enhancement for the benefit of the Class A and Class M Certificates consists of:

Excess Cash Flow. Because more interest with respect to the mortgage loans is payable by the mortgagors than isexpected to be necessary to distribute interest on the Class A and Class M Certificates each month and pay relatedexpenses, there may be excess cash flow with respect to the mortgage loans. Some of this excess cash flow will beused, if necessary, to protect the Class A and Class M Certificates against some realized losses by making anadditional payment of principal up to the amount of the realized losses.

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Overcollateralization. The aggregate principal balance of the mortgage loans as of the cut-off date will exceed theaggregate certificate principal balance of the Class A, Class M and Class P Certificates on the closing date byapproximately $37,105,745, which is equal to the initial certificate principal balance of the Class CE Certificates.This amount represents approximately 3.05% of the aggregate principal balance of the mortgage loans as of the cut-


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off date, and is approximately equal to the initial amount of overcollateralization required to be provided by themortgage pool under the pooling and servicing agreement.

See Description of the CertificatesNet Monthly Excess Cash Flow and Overcollateralization in this prospectussupplement.

Subordination. The rights of the holders of the Class M Certificates and the Class CE Certificates to receivedistributions will be subordinated, to the extent described in this prospectus supplement, to the rights of the holdersof the Class A Certificates.

In addition, the rights of the holders of the Class M Certificates with higher numerical class designations to receivedistributions will be subordinated to the rights of the holders of the Class M Certificates with lower numerical classdesignations, to the extent described underDescription of the CertificatesAllocation of Losses in this

prospectus supplement.

Subordination is intended to enhance the likelihood of regular distributions on the more senior certificates in respectof interest and principal and to afford the more senior certificates protection against realized losses, as describedunderDescription of the CertificatesAllocation of Losses in this prospectus supplement.

Swap Agreement

The holders of the Class A and Class M Certificates will benefit from a swap agreement. On the business day priorto each distribution date, the trust will be obligated to make a fixed payment, and the swap counterparty will beobligated to make a floating payment, in each case as set forth in the swap agreement and as described in this

prospectus supplement. To the extent that the fixed payment exceeds the floating payment on the business day priorto any distribution date, amounts otherwise available to certificateholders will be applied to make a net payment tothe swap counterparty. To the extent that the floating payment exceeds the fixed payment on the business day priorto any distribution date, the swap counterparty will make a net swap payment to the trust which may be used tocover certain interest shortfalls, realized losses and any net WAC rate carryover amounts as described in this

prospectus supplement, in each case to the extent not covered by net monthly excess cash flow.

Upon early termination of the swap agreement, the trust or the swap counterparty may be liable to make a swaptermination payment to the other party (regardless of which party has caused the termination). The swap termination

payment will be computed in accordance with the procedures set forth in the swap agreement. In the event that thetrust is required to make a swap termination payment to the swap counterparty, that amount will be paid by the truston the related distribution date and on any subsequent distribution dates until paid in full, prior to any distribution tothe Class A and Class M Certificates, except for certain swap termination payments resulting from an event ofdefault by or certain termination events with respect to the swap counterparty as described in this prospectussupplement for which payments by the trust to the swap counterparty will be subordinated to all distributions to theClass A and Class M Certificates. The swap agreement will terminate after the distribution date in January 2011.

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Except as described in the second preceding sentence, amounts payable by the trust to the swap counterparty will bededucted from the amounts available for distribution to certificateholders before distribution to certificateholders.

See The Swap Counterparty and Description of the CertificatesThe Swap Agreement in this prospectus

supplement.

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subject to ERISA or Section 4975 of the Internal Revenue Code are encouraged to consult with their legal advisorsbefore investing in the Class A-1 or the Class A-2 Certificates.

Until the swap agreement terminates in January 2011, the Class A-3 Certificates, the Class A-4 Certificates, theClass A-5 Certificates and the Class M Certificates may not be purchased by or transferred to Benefit Plans (asdefined in this prospectus supplement underCertain ERISA Considerations ). Each purchaser and transferee of a

Class A-3 Certificate, a Class A-4 Certificate, a Class A-5 Certificate or a Class M Certificate or any interest thereinwill be deemed to have represented, by virtue of its acquisition or holding of such certificate or any interest therein,that it is not a Benefit Plan (as defined in this prospectus supplement underCertain ERISA Considerations ).

See Certain ERISA Considerations in this prospectus supplement and in the prospectus.

Tax Status

For federal income tax purposes, the depositor will elect to treat certain segregated assets comprising the trust,exclusive of the swap account and the swap agreement, as two REMICs. Each of the Class A and Class MCertificates will represent ownership of a regular interest in a REMIC, which generally will be treated as debtinstruments for federal income tax purposes, coupled with the right to receive payments in certain instances in

respect of net WAC rate carryover amounts. Holders of Class A and Class M Certificates will be required to includein income all interest and original issue discount, if any, on their certificates in accordance with the accrual methodof accounting regardless of the certificateholders usual method of accounting. For federal income tax purposes, theresidual certificates will represent the sole residual interest in each REMIC.

For further information regarding the federal income tax consequences of investing in the Class A and Class MCertificates, see MaterialFederal Income Tax Consequences in this prospectus supplement and in the

prospectus.

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Risk Factors

The Class A and Class M Certificates are not suitable investments for all investors. In particular, youshould not purchase the Class A and Class M Certificates unless you understand the prepayment, credit, liquidityand market risks associated with the Class A and Class M Certificates.

The Class A and Class M Certificates are complex securities. You should possess, either alone or togetherwith an investment advisor, the expertise necessary to evaluate the information contained in this prospectussupplement and the accompanying prospectus in the context of your financial situation and tolerance for risk.

You should carefully consider, among other things, the following factors in connection with the purchase ofthe Class A and Class M Certificates:

Risks Associated with the Mortgage Loans

Some of the mortgage

loans have an initial

interest only period, which

may increase the risk of

loss and delinquency on

these mortgage loans.

As of the cut-off date, approximately 23.60% of the mortgage loans (by aggregateprincipal balance of the mortgage loans as of the cut-off date) require the relatedborrowers to make monthly payments of accrued interest, but not principal, for thefirst five years following origination. After such interest-only period, the borrowersmonthly payment will be recalculated to cover both interest and principal so that themortgage loan will amortize fully on its final payment date. The interest-only featuremay reduce the likelihood of prepayment for such mortgage loans during theinterest-only period due to the smaller monthly payments relative to a fully-


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amortizing mortgage loan. Because the monthly payment increases following theinterest-only period, there is a greater likelihood that the related borrower may not beable to pay the increased amount and may default or may refinance the relatedmortgage loan to avoid the higher payment. In addition, because it is expected thatno principal payments will be made on such mortgage loans for an extended periodfollowing origination, certificateholders will receive smaller principal distributionsduring such period than they would have received if the related borrowers wererequired to make monthly payments of interest and principal for the entire lives ofsuch mortgage loans. This slower rate of principal distributions may reduce thereturn on an investment in the Class A and Class M Certificates that are purchased ata discount.

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The return on your

certificates may be affected

by realized losses on the

mortgage loans, which

could occur due to avariety of causes.

Losses on the mortgage loans may occur due to a wide variety of causes, includingthe increase in the monthly payment amount described above or a decline in realestate values and adverse changes in the borrowers financial condition. A decline inreal estate values or economic conditions nationally or in the regions where the

mortgaged properties are located may increase the risk of realized losses on themortgage loans.

The mortgage loans were

underwritten to standards

which do not conform to

the credit standards ofFannie Mae or Freddie

Mac which may result in

losses on the mortgage

loans.

Each originators underwriting standards are intended to assess the value of themortgaged property and to evaluate the adequacy of the property as collateral for themortgage loan and consider, among other things, a mortgagors credit history,repayment ability and debt service-to-income ratio, as well as the type and use of themortgaged property. Each originator provides loans primarily to borrowers who donot qualify for loans conforming to Fannie Mae and Freddie Mac credit guidelines.Each originators underwriting standards do not prohibit a mortgagor from obtaining,at the time of origination of such originators first lien, additional financing which issubordinate to that first lien, which subordinate financing would reduce the equitythe mortgagor would otherwise have in the related mortgaged property as indicated

in such originators loan-to-value ratio determination for such originators first lien.

The mortgage loans include loans that:

were made to mortgagors having imperfect credit histories;

are secured by non-owner occupied properties and second-homes, which constituteapproximately 9.38% of the mortgage pool by principal balance of the mortgageloans as of the cut-off date, and may present a greater risk that the mortgagor willstop making monthly payments if the mortgagors financial condition deteriorates;

were made to mortgagors who have debt-to-income ratios greater than 50% (i.e.,

the amount of debt the mortgagor owes represents a large portion of his or herincome), which constitute approximately 4.90% of the mortgage pool by principalbalance of the mortgage loans as of the cut-off date, and a deterioration of anymortgagors financial condition could make it difficult for that mortgagor to continueto make mortgage payments;

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were made to mortgagors whose income is not required to be verified, whichconstitute approximately 41.05% of the mortgage pool by principal balance of themortgage loans as of the cut-off date, and may increase the risk that the mortgagorsincome is less than that represented; and

were not originated pursuant to any particular secondary mortgage market

program; as a result many of the mortgage loans have exceptions such as high loan-to-value ratios at origination or no primary mortgage insurance policy.

The foregoing characteristics of the mortgage loans may adversely affect theperformance of the mortgage pool and the value of the Class A and Class MCertificates as compared to other mortgage pools and other series of mortgage pass-through certificates sponsored by Carrington Securities, LP and its affiliates.

Investors should note that approximately 37.88% of the mortgage loans (byaggregate principal balance of the mortgage loans as of the cut-off date) were madeto borrowers that have credit scores of less than 600. These mortgage loans andmortgage loans with higher loan-to-value ratios may present a greater risk of loss.

As a result of the originators underwriting standards, the mortgage loans in themortgage pool are likely to experience rates of delinquency, foreclosure and

bankruptcy that are higher, and that may be substantially higher, than thoseexperienced by mortgage loans underwritten in a more traditional manner.

Furthermore, changes in the values of mortgaged properties may have a greatereffect on the delinquency, foreclosure, bankruptcy and loss experience of themortgage loans in the mortgage pool than on mortgage loans originated in a moretraditional manner. No assurance can be given that the values of the relatedmortgaged properties have remained or will remain at the levels in effect on the datesof origination of the related mortgage loans.

See Description of the Mortgage PoolThe OriginatorsUnderwriting

Guidelines in this prospectus supplement.

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Mortgage loans with high

loan-to-value ratios leavethe related borrower with

little or no equity in the

related mortgaged

property, which may result

in losses with respect to

these mortgage loans.

Mortgage loans with a loan-to-value ratio (or combined loan-to-value ratio in thecase of a second lien mortgage loan) of greater than 80.00% may present a greaterrisk of loss than mortgage loans with loan-to-value ratios of 80.00% or below.Approximately 43.82% of the mortgage loans (by aggregate principal balance of themortgage loans as of the cut-off date) had a loan-to-value ratio at origination inexcess of 80.00% and are not covered by any primary mortgage insurance. Nomortgage loan (to be included in the mortgage pool as of the closing date) had a

loan-to-value ratio (or combined loan-to-value ratio in the case of a second lienmortgage loan) at origination exceeding 100.00%. In addition, each originatorsunderwriting standards do not prohibit the borrower from obtaining a second lienmortgage either at the time of origination of such originators loan or any timethereafter, which would decrease the borrowers equity in the related mortgaged

property.

An overall decline in the residential real estate market, a rise in interest rates over aperiod of time and the condition of a mortgaged property, as well as other factors,


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may have the effect of reducing the value of the mortgaged property from theappraised value at the time the mortgage loan was originated and, therefore,increasing the loan-to-value ratio (or combined loan-to-value ratio in the case of asecond lien mortgage loan) of the related mortgage loan. An increase of this kindmay reduce the likelihood of liquidation or other proceeds being sufficient to satisfythe mortgage loan, and any losses to the extent not covered by the creditenhancement may affect the yield to maturity of your certificates. There can be noassurance that the value of a mortgaged property estimated in any appraisal orreview is equal to the actual value of that mortgaged property at the time of thatappraisal or review. Investors should note that the values of the mortgaged propertiesmay be insufficient to cover the outstanding principal balance of the mortgage loans.There can be no assurance that the loan-to-value ratio (or combined loan-to-valueratio in the case of a second lien mortgage loan) of any mortgage loan determined atany time after origination is less than or equal to its loan-to-value ratio (or combinedloan-to-value ratio in the case of a second lien mortgage loan) at origination.

Rising interest rates may

adversely affect the value

of your certificates.

Approximately 85.62% of the mortgage loans (by aggregate principal balance of themortgage loans as of the cut-off date) are adjustable-rate mortgage loans whoseinterest rates increase as the applicable index increases. If market interest ratesincrease significantly, the likelihood that borrowers may not be able to pay theirincreased interest payments would increase, resulting in greater defaults on themortgage loans. In addition, rising interest rates may adversely affect housing pricesand the economy generally, thereby increasing the likelihood of defaults and losseson the mortgage loans.

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The return on your

certificates may be reduced

by losses, which are more

likely because some of the

mortgage loans are securedby second liens.

The rate of delinquency and default of second lien mortgage loans and the severity ofloss may be greater than that of mortgage loans secured by first liens on comparable

properties. Approximately 0.94% of the mortgage loans (by aggregate principalbalance of the mortgage loans as of the cut-off date) included in the mortgage loan

pool are secured by second liens. Proceeds from liquidation of the property will beavailable to satisfy the mortgage loans only if the claims of any senior liens(including mortgages or deeds of trust) have been satisfied in full. When it isuneconomical to foreclose on the mortgaged property or engage in other lossmitigation procedures, the servicer may write off the entire outstanding balance ofthe mortgage loan as a bad debt. The foregoing risks are particularly applicable tomortgage loans secured by second liens that have high combined loan-to-value ratios

because it is comparatively more likely that the servicer would determine foreclosureto be uneconomical if the servicer believes that there is little, if any, equity availablein the mortgaged property.

The return on the Class Aand Class M Certificates

may be particularlysensitive to changes in real

estate markets in specific

regions.

One risk associated with investing in mortgage-backed securities is created by anyconcentration of the related properties in one or more specific geographic regions.

Approximately 27.76%, 10.07%, 9.29% and 6.47% of the mortgage loans (byaggregate principal balance of the mortgage loans as of the cut-off date) are locatedin California, Florida, New York and New Jersey, respectively. If the regionaleconomy or housing market weakens in California, Florida, New York or NewJersey or in any other region having a significant concentration of propertiesunderlying the mortgage loans, the mortgage loans in that region may experiencehigh rates of loss and delinquency resulting in realized losses to the holders of theClass A and Class M Certificates. A regions economic condition and housingmarket may be adversely affected by a variety of events, including natural disasterssuch as earthquakes, hurricanes, floods and eruptions, civil disturbances such as


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riots, disruptions such as ongoing power outages, or hostilities such as terroristactions or acts of war.

The economic impact of any of those events may also be felt in areas beyond theregion immediately affected by the disaster or disturbance. The properties underlyingthe mortgage loans may be concentrated in these regions. This concentration may

result in greater losses to certificateholders than those generally present for similarmortgage-backed securities without that concentration.

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Violation of consumer

protection laws may resultin losses on the mortgage

loans and your certificates.

Applicable state laws generally regulate interest rates and other charges, requirecertain disclosure, and require licensing of the originator. In addition, other statelaws, public policy and general principles of equity relating to the protection ofconsumers, unfair and deceptive practices and debt collection practices may apply tothe origination, servicing and collection of the mortgage loans.

The mortgage loans are also subject to federal laws, including:

the Federal Truth-in-Lending Act and Regulation Z promulgated thereunder, whichrequire certain disclosures to the mortgagors regarding the terms of the mortgageloans;

the Equal Credit Opportunity Act and Regulation B promulgated thereunder,which prohibit discrimination on the basis of age, race, color, sex, religion, maritalstatus, national origin, receipt of public assistance or the exercise of any right underthe Consumer Credit Protection Act, in the extension of credit; and

the Fair Credit Reporting Act, which regulates the use and reporting of informationrelated to the borrowers credit experience.

Violations of certain provisions of these federal laws may limit the ability of theservicer to collect all or part of the principal of or interest on the mortgage loans andin addition could subject the trust to damages and administrative enforcement andcould result in the borrowers rescinding such mortgage loans against either the trustor subsequent holders of the mortgage loans.

The responsible party will represent that as of the closing date each mortgage loan isin compliance with applicable federal and state laws and regulations. In the event ofa breach of such representation, the responsible party will be obligated to cure such

breach or repurchase or replace the affected mortgage loan in the manner set forth inthe pooling and servicing agreement.

High Cost Loans

None of the mortgage loans are High Cost Loans within the meaning of theHomeownership Act or any state or local law, ordinance or regulation similar to theHomeowner Act. SeeCertain LegalAspects of Mortgage Loans and ContractsThe Mortgage LoansAnti-Deficiency Legislation and Other Limitations on

Lenders in the prospectus.


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In addition to the Homeownership Act, however, a number of legislative proposalshave been introduced at both the federal and state level that are designed todiscourage predatory lending practices. Some states have enacted, or may enact, laws

or regulations that prohibit inclusion of some provisions in mortgage loans that havemortgage rates or origination costs in excess of prescribed levels, and require that

borrowers be given certain disclosures prior to the consummation of such mortgageloans. In some cases, state law may impose requirements and restrictions greater thanthose in the Homeownership Act. The failure of an originator to comply with theselaws could subject the trust, and other assignees of the mortgage loan, to monetary

penalties and could result in the borrowers rescinding such mortgage loans againsteither the trust or subsequent holders of the mortgage loans. Lawsuits have been

brought in various states making claims against assignees of high costs loans forviolations of state law. Named defendants in these cases include numerous

participants within the secondary mortgage market, including some securitizationtrusts.

Under the anti-predatory lending laws of some states, the borrower is required tomeet a net tangible benefits test in connection with the origination of the relatedmortgage loan. This test may be highly subjective and open to interpretation. As aresult, a court may determine that a mortgage loan does not meet the test even if anoriginator reasonably believed that the test was satisfied. Any determination by acourt that a mortgage loan does not meet the test will result in a violation of that stateanti-predatory lending law, in which case the responsible party will be required to

purchase such mortgage loan from the trust.

Some of the mortgage

loans provide for large

payments at maturity.

Approximately 44.88% of the mortgage loans (by aggregate principal balance of themortgage loans as of the cut-off date) are not fully amortizing over their terms tomaturity and thus, will require substantial principal payments, sometimes called a

balloon amount, at their stated maturity. Mortgage loans which require payment of a

balloon amount involve a greater degree of risk because the ability of a mortgagor topay a balloon amount typically will depend upon the mortgagors ability either totimely refinance the loan or to sell the related mortgaged property. See Descriptionof the Mortgage Pool in this prospectus supplement.

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Limited Obligations

Payments on the mortgage

loans and the other assets

of the trust are the solesource of distributions on

your certificates.

While the trust will enter into a swap agreement for the benefit of the Class A andClass M Certificates, the only credit enhancement for the Class A and Class M

Certificates will be excess cash flow, overcollaterization and, with respect to theClass A Certificates, the subordination provided by the Class M Certificates, andwith respect to the Class M Certificates, the subordination provided by any Class MCertificates with a lower distribution priority, in each case as described in this

prospectus supplement. Therefore, if there is no excess cash flow, the amount ofovercollateralization is reduced to zero and there are no amounts available under theswap agreement, then subsequent realized losses generally will be allocated to themost subordinate class of Class M Certificates, in each case until the certificate

principal balance of such class has been reduced to zero, and then to the Class A


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Certificates, on apro rata basis based on the certificate principal balance of eachsuch class, until their respective certificate principal balances have been reduced tozero.

None of the depositor, the servicer or any of their affiliates will have any obligationto replace or supplement the credit enhancement, or to take any other action to

maintain any rating of the Class A or Class M Certificates. If any realized losses areincurred that are not covered by the credit enhancement, the holders of the Class Aand Class M Certificates will bear these realized losses.

See Description of the CertificatesAllocation of Losses in this prospectus

supplement.

Amounts available under

the swap agreement fromthe swap counterparty maybe limited.

Any amounts payable to the trust by the swap counterparty under the swapagreement will be available as described in this prospectus supplement to covercertain interest shortfalls, any net WAC rate carryover amounts and to increase theovercollateralization amount to the required overcollateralization amount and toreimburse the principal portion of any allocated realized loss amounts previouslyallocated that remain unreimbursed, where applicable, to the extent not covered by

net monthly excess cash flow. However, no net amounts will be payable by the swapcounterparty unless the floating amount owed by the swap counterparty on the

business day prior to a distribution date exceeds the fixed amount owed to the swapcounterparty on such business day prior to a distribution date. This will not occurexcept in periods when one-month LIBOR (as determined pursuant to the swapagreement) generally exceeds 5.100% per annum. No assurance can be made thatany amounts will be received under the swap agreement, or that any such amountsthat are received will be sufficient to cover interest shortfalls, net WAC ratecarryover amounts, realized losses or to increase the overcollateralization amount tothe required overcollateralization amount as described in this prospectus supplement.Any net swap payment payable to the swap counterparty under the terms of the swapagreement will reduce amounts available for distribution to certificateholders, andmay reduce the pass-through rates of the Class A and Class M Certificates. Inaddition, any swap termination payment payable to the swap counterparty in theevent of early termination of the swap agreement (other than certain swaptermination payments resulting from an event of default by or certain terminationevents with respect to the swap counterparty, as described in this prospectussupplement) will reduce amounts available for distribution to the certificateholders.

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Upon early termination of the swap agreement, the trustee, on behalf of the trust, orthe swap counterparty may be liable to make a swap termination payment to theother party (regardless of which party caused the termination). The swap termination

payment will be computed in accordance with the procedures set forth in the swap

agreement. In the event that the trustee, on behalf of the trust, is required to make aswap termination payment to the swap counterparty, that amount will be paid on the

business day prior to the related distribution date, and on the business day prior toany subsequent distribution dates until paid in full, prior to distributions to the ClassA and Class M Certificates (other than certain swap termination payments resultingfrom an event of default or certain termination events with respect to the swapcounterparty as described in this prospectus supplement, which swap termination

payments will be subordinated to distributions to the Class A and Class MCertificates). This feature may result in losses on the certificates. Due to the priority


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of the applications of the available funds, the Class M Certificates will bear theeffects of any shortfalls resulting from a net swap payment or swap termination

payment by the trust before such effects are borne by the Class A Certificates andone or more classes of Class M Certificates may suffer a loss as a result of such

payment. Investors should note that the level of one-month LIBOR as ofDecember 5, 2006 is approximately 5.35% per annum. The trust will make a netswap payment to the swap counterparty when one-month LIBOR falls below 5.100%

per annum. Payments owed by the trustee, on behalf of the trust, to the swapcounterparty will reduce the amount of excess cash flow available to cover losses onthe mortgage loans, interest shortfalls and net WAC rate carryover amounts, and tomaintain overcollateralization.

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Net swap payments payable to the trustee, on behalf of the trust, by the swapcounterparty under the swap agreement will be used to cover certain losses, certaininterest shortfalls, any net WAC rate carryover amounts and to increase theovercollateralization amount to the required overcollateralization amount, as

described in this prospectus supplement and in some cases, where applicable, to theextent not covered by net monthly excess cash flow. However, if the swapcounterparty defaults on its obligations under the swap agreement, then there may beinsufficient funds to cover such amounts and the amounts available for distributionto the holders of the Class A and Class M Certificates may be reduced. To the extentthat distributions on the Class A and Class M Certificates depend in part on

payments to be received by the trust under the swap agreement, the ability of thetrustee to make such distributions on such certificates will be subject to the creditrisk of the swap counterparty to the swap agreement.

Payments to the trust

under the swap agreement

are subject to counterparty

risk.

The assets of the trust include the swap agreement which will require thecounterparty thereunder to make certain payments to the trust for the benefit of theholders of the Class A and Class M Certificates. To the extent that distributions on

the Class A and Class M Certificates depend in part on payments to be received bythe trustee under the swap agreement, the ability of the trustee to make suchdistributions on the Class A and Class M Certificates will be subject to the credit riskof the counterparty to the swap agreement. Although there is a mechanism in placeto facilitate replacement of the swap agreement upon the default or credit impairmentof the counterparty thereunder, there can be no assurance that any such mechanismwill result in the ability to obtain a suitable replacement swap agreement.

Liquidity Risks

You may have to hold your

certificates to maturity if

their marketability is

limited.

A secondary market for your certificates may not develop. Even if a secondarymarket does develop, it may not continue, or it may be illiquid. Neither theunderwriters nor any other person will have any obligation to make a secondary

market in your certificates. Illiquidity means you may not be able to find a buyer tobuy your certificates readily or at prices that will enable you to realize a desiredyield. Illiquidity can have an adverse effect on the market value of the Class A andClass M Certificates.

Any class of Class A and Class M Certificates may experience illiquidity, althoughgenerally illiquidity is more likely for classes that are especially sensitive to

prepayment, credit or interest rate risk, or that have been structured to meet theinvestment requirements of limited categories of investors.


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Withdrawal or

downgrading of initial

ratings will likely reduce

the prices for certificates.

A security rating is not a recommendation to buy, sell or hold securities. Similarratings on different types of securities do not necessarily mean the same thing. Werecommend that you analyze the significance of each rating independently from anyother rating. Any rating agency may change its rating of the offered certificates afterthe offered certificates are issued if that rating agency believes that circumstanceshave changed. Any subsequent withdrawal or downgrade in rating will likely reducethe price that a subsequent purchaser will be willing to pay for the offeredcertificates.

SpecialYield and Prepayment Considerations

The yield to maturity on

your certificates will vary

depending on various

factors.

The yield to maturity on your certificates will depend on a variety of factors,including:

the rate and timing of principal payments on the mortgage loans, includingprepayments, defaults and liquidations and repurchases due to breaches ofrepresentations and warranties,

the rate and timing of realized losses and interest shortfalls on the mortgage loans,

the pass-through rate for your certificates,

the purchase price you paid for your certificates, and

the timing of the exercise of the optional termination by the majority holder of theClass CE Certificates.

The rates of prepayments and defaults are two of the most important and leastpredictable of these factors. No assurances are given that the mortgage loans willprepay at any particular rate.

In general, if you purchase a certificate at a price higher than its outstandingcertificate principal balance and principal distributions occur faster than youassumed at the time of purchase, your yield will be lower than anticipated.Conversely, if you purchase a certificate at a price lower than its outstandingcertificate principal balance and principal distributions occur more slowly than youassumed at the time of purchase, your yield will be lower than anticipated.

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The rate of prepayments

on the mortgage loans will

vary depending on future

market conditions and

other factors.

Since mortgagors can generally prepay their mortgage loans at any time, the rate andtiming of principal distributions on the Class A and Class M Certificates are highlyuncertain. Generally, when market interest rates increase, mortgagors are less likelyto prepay their mortgage loans. This could result in a slower return of principal toyou at a time when you might have been able to reinvest those funds at a higher rateof interest than the applicable pass-through rate. On the other hand, when marketinterest rates decrease, borrowers are generally more likely to prepay their mortgage


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loans. This could result in a faster return of principal to you at a time when youmight not be able to reinvest those funds at an interest rate as high as the applicable

pass-through rate.

Refinancing programs, which may involve soliciting all or some of the mortgagors torefinance their mortgage loans, may increase the rate of prepayments on the

mortgage loans. These programs may be conducted by the servicer or any of itsaffiliates or a third party, subject to the limitations set forth in the pooling andservicing agreement.

Approximately 66.93% of the mortgage loans (by aggregate principal balance of themortgage loans as of the cut-off date) provide for payment of a prepayment charge.Prepayment charges may reduce the rate of prepayment on the mortgage loans untilthe end of the period during which these prepayment charges apply. Prepaymentcharges received on the mortgage loans may be waived and in any case will not beavailable for distribution on the Class A and Class M Certificates. See Descriptionof The Mortgage Pool and Yield and Prepayment Considerations in this

rospectus supplement and Maturity and Prepayment Considerations in the

rospectus.

The return on your

certificates could be

reduced by shortfalls due

to the Servicemembers

Civil Relief Act or other

similar legislation orregulations.

The Servicemembers Civil Relief Act, formerly known as the Soldiers and SailorsCivil Relief Act of 1940, or Relief Act, provides relief to borrowers who enter activemilitary service and to borrowers in reserve status who are called to active duty afterthe origination of their mortgage loan. Current or future military operations of theUnited States may increase the number of citizens who may be in active militaryservice, including persons in reserve status who may be called to active duty. TheRelief Act provides generally that a borrower who is covered by the Relief Act maynot be charged interest on a mortgage loan in excess of 6% per annum during the

period of the borrowers active duty. These shortfalls are not required to be paid bythe borrower at any future time. The servicer is not required to advance theseshortfalls. These shortfalls will reduce the amount of interest distributable on theClass A and Class M Certificates. Interest reductions on the mortgage loans due tothe application of the Relief Act or similar legislation or regulations will not becovered by any source.

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The Relief Act also limits the ability of the servicer to foreclose on a mortgage loanduring the borrowers period of active duty and, in some cases, during an additionalthree month period thereafter. Other similar legislation or regulations may also limita lenders ability to exercise remedies against borrowers who are currently engagedin or who just completed active military duty. As a result, there may be delays in

payment and increased realized losses on the mortgage loans.

We do not know how many mortgage loans have been or may be affected by theapplication of the Relief Act or similar legislation or regulations.

See Certain LegalAspects of Mortgage LoansServicemembers Civil ReliefAct

in the prospectus.

The Class A and Class M

Certificates are each

subject to different

The Class A and Class M Certificates are each subject to various priorities fordistribution of principal as described in this prospectus supplement. Distributions of

principal on the Class A and Class M Certificates having an earlier priority of


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distribution priorities. distribution will be affected by the rates of prepayment of the mortgage loans earlyin the life of the mortgage pool. Those classes of Class A and Class M Certificateswith a later priority of distribution will be affected by the rates of prepayment of themortgage loans experienced both before and after the commencement of principaldistributions on such classes, and will be more likely to be affected by losses on themortgage loans not covered by the credit enhancement since these classes will beoutstanding for a longer period of time.

The pass-through rates on

the Class A and Class M

Certificates are subject to

a cap.

The pass-through rates on the Class A and Class M Certificates are subject to a capequal to the lesser of 14.50% per annum and the weighted average of the netmortgage rates on the mortgage loans (after taking into account any net swap

payments owed to the swap counterparty or swap termination payments owed to theswap counterparty not due to a swap counterparty trigger event), adjusted to anactual over 360-day rate. Therefore, the prepayment of the mortgage loans withhigher mortgage rates may result in lower pass-through rates on the Class A andClass M Certificates.

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Investors in the Class A and Class M Certificates should be aware that the mortgagerates on the adjustable-rate mortgage loans are generally adjustable semi-annually

based on the related index, and sometimes after a fixed interest rate period.Consequently, the weighted average net mortgage rate on the adjustable-ratemortgage loans during the related due period will be sensitive to fluctuations in thelevels of the related indices on the adjustable-rate mortgage loans, and may be lessthan the rate of interest that would accrue on the Class A and Class M Certificates atthe per annum rate of the lesser of (a) One-Month LIBOR plus the related marginand (b) 14.50% per annum. In a rising interest rate environment, the Class A andClass M Certificates may receive interest at the lesser of (a) the weighted average netmortgage rate of the mortgage loans (after taking into account any net swap

payments owed to the swap counterparty or swap termination payments owed to the

swap counterparty not due to a swap counterparty trigger event), adjusted to anactual over 360-day rate, or (b) 14.50% per annum for a protracted period of time.

To the extent that interest distributed on the Class A and Class M Certificates isbased on a rate equal to the weighted average net mortgage rate of the mortgageloans(after taking into account any net swap payments owed to the swapcounterparty or swap termination payments owed to the swap counterparty not due toa swap counterparty trigger event), the difference between that weighted average netmortgage rate (after taking into account any net swap payments owed to the swapcounterparty or swap termination payments owed to the swap counterparty not due toa swap counterparty trigger event), adjusted to an actual over 360-day rate, and thelesser of (a) One-Month LIBOR plus the related margin and (b) 14.50% per annumwill create a shortfall that will carry forward with interest thereon. Any resulting

shortfall will be distributable only from net monthly excess cash flow and amountsreceived under the swap agreement, to the extent available for that purpose, as and tothe extent described in this prospectus supplement. Also, in this situation, the amountof net monthly excess cash flow from the mortgage loans may be substantiallyreduced. The swap agreement terminates after the distribution date in January 2011.

If the swap counterparty defaults on its obligations under the swap agreement, thenthere may be insufficient funds to cover such amounts, and the amount available fordistribution to the offered certificates may be reduced. To the extent that


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distributions on the offered certificates depend in part on payments to be received bythe trust under the swap agreement, the ability of the trustee to make suchdistributions on such certificates will be subject to the credit risk of the swapcounterparty to the swap agreement.

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The Class M Certificates

have different yield and

payment considerations.

The yields to investors in the Class M Certificates will be sensitive to the rate andtiming of realized losses, to the extent not covered by net monthly excess cash flow,overcollateralization or amounts received under the swap agreement. Losses, to theextent not covered by net monthly excess cash flow, overcollateralization or amountsreceived under the swap agreement will be allocated to the most subordinate class ofClass M Certificates outstanding. The principal portion of any losses previouslyallocated to the Class M Certificates that remain unreimbursed may be covered byexcess cash flow and amounts received under the swap agreement as and to theextent described in this prospectus supplement.

See SummaryCredit Enhancement and Description of the Certificates

Allocation of Losses in this prospectus supplement.

Unless the Class A Certificates are reduced to zero, it is not expected that theClass M Certificates will receive any distributions of principal until the later of thedistribution date in January 2010 and the first distribution date on which the sum ofthe overcollateralization amount and the aggregate certificate principal balance of theClass M Certificates is greater than or equal to approximately 56.80% of theaggregate principal balance of the mortgage loans after giving effect to principaldistributions on that distribution date. As a result, the weighted average lives of theClass M Certificates may be longer than would otherwise be the case if distributionson the Class M Certificates were made proportionately with the Class A Certificates

beginning on the first distribution date. In addition, after the Class M Certificatescommence receiving principal distributions, the most subordinate class of Class MCertificates may be retired before the more senior classes of Class M Certificates.

See Description of the CertificatesPrincipal Distributions in this prospectus

supplement.

You should note the

additional rights

of the holder of the ClassCE Certificates.

Pursuant to the pooling and servicing agreement, the servicer will provide the holderof the Class CE Certificates with reports regarding liquidated mortgage loans, loanmodifications and delinquent mortgage loans and will make its servicing personnelavailable to respond to inquiries from the holder of the Class CE Certificates and willmake underwriting files for defaulted mortgage loans available to the holder of theClass CE Certificates. In addition, the holder of the Class CE Certificates will havethe right to direct the servicer in performing certain of the servicers duties under the

pooling and servicing agreement, including, but not limited to, the right to consent toany sub-servicer and the right to direct the servicer regarding the management of

specific defaulted mortgage loans. The servicer will be required to accept any suchdirections from the holder of the Class CE Certificates.

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Investors in the Class A and Class M Certificates should note that:


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the rights to be granted to the holder of the CE Certificates may be inconsistentwith and adverse to the interests of the holders of the Class A and Class MCertificates, and the holder of the CE Certificates has no obligation or duty toconsider the interests of the Class A and Class M Certificates in connection with theexercise or nonexercise of such rights; and

such exercise by the holder of the CE Certificates of the rights and consents setforth above may negatively affect the Class A and Class M Certificates and theexistence of such rights of the holder of the CE Certificates, whether or notexercised, may adversely affect the liquidity of the Class A and Class M Certificatesrelative to other asset-backed certificates backed by comparable mortgage loans andwith comparable distribution priorities and ratings.

Bankruptcy Risks

Bankruptcy proceedings

could delay or reduce

distributions on the Class

A and Class M

Certificates.

The transfer of the mortgage loans from the sponsor to the depositor is intended bythe parties to be and has been documented as a sale. However, if the sponsor were to

become bankrupt, a trustee in bankruptcy could attempt to recharacterize the sale ofthe mortgage loans as a loan secured by the mortgage loans or to consolidate themortgage loans with the assets of the sponsor. Any such attempt could result in a

delay in or reduction of collections on the mortgage loans available to makedistributions on the certificates.

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The Bankruptcy of a

Borrower May Increase

the Risk of Loss on a

Mortgage Loan

If a borrower becomes subject to a bankruptcy proceeding, a bankruptcy court mayrequire modifications of the terms of a mortgage loan without a permanentforgiveness of the principal amount of the mortgage loan. Modifications haveincluded reducing the amount of each monthly payment, changing the rate of interestand altering the repayment schedule. In addition, a court having federal bankruptcyurisdiction may permit a debtor to cure a monetary default relating to a mortgage

loan on the debtors residence by paying arrearages within a reasonable period andreinstating the original mortgage loan payment schedule, even though the lenderaccelerated the mortgage loan and final judgment of foreclosure had been entered instate court. In addition, under the federal bankruptcy law, all actions against a

borrower and the borrowers property are automatically stayed upon the filing of abankruptcy petition.

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Issuing Entity

The depositor will establish a trust with respect to Series 2006-NC5 on the closing date, under a pooling

and servicing agreement, dated as of December 1, 2006, among the depositor, the servicer and the trustee. Thepooling and servicing agreement is governed by the laws of the state of New York. On the closing date, thedepositor will deposit into the trust a mortgage pool of mortgage loans secured by first and second liens on one- tofour- family residential properties with terms to maturity of not more than 30 years. The issuing entity will not haveany additional equity apart from the certificates. The trustee shall, for federal income tax purposes, maintain the

books and records of the issuing entity on a calendar year basis. The pooling and servicing agreement authorizes theissuing entity to engage only in selling the certificates in exchange for the mortgage loans, entering into and

performing its obligations under the pooling and servicing agreement, activities necessary, suitable or convenient to


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such actions and other activities as may be required in connection with the conservation of the trust fund and makingor causing to be made distributions to certificateholders.

The pooling and servicing agreement provides that the depositor assigns to the trustee for the benefit of thecertificateholders without recourse all the right, title and interest of the depositor in and to the mortgage loans.Furthermore, the pooling and servicing agreement states that, although it is intended that the conveyance by the

depositor to the trustee of the mortgage loans be construed as a sale, the conveyance of the mortgage loans shall alsobe deemed to be a grant by the depositor to the trustee of a security interest in the mortgage loans and relatedcollateral.

Some capitalized terms used in this prospectus supplement have the meanings given belowunderDescription of the CertificatesGlossary of Terms or in the prospectus underGlossary.

Sponsor

Carrington Securities, LP, formerly known as Carrington Mortgage Credit Fund I, LP, or CarringtonSecurities, is a limited partnership formed in the state of Delaware in December 2003. Carrington Securities isheadquartered in Greenwich, Connecticut. Carrington Securities buys residential mortgage loans under several

mortgage loan purchase agreements from mortgage loan originators or sellers nationwide that meet its seller/servicereligibility requirements.See The TrustsMortgage CollateralSellers in the prospectus for a general descriptionof the characteristics used to determine eligibility of collateral sellers.

Carrington Securities began operations in March 2004. Carrington Securities acquires mortgage loanssecured by first and second liens on one- to four- family residential properties. From time to time, CarringtonSecurities funds its acquisition of mortgage loans through several financing facilities it has in place with nationallending institutions, including an affiliate of Bear, Stearns & Co. Inc., an underwriter of the offered certificates. Thefundings under these financing facilities are secured by a pledge of the mortgage loans. Through its securitization

program, Carrington Securities satisfies its obligations under the financing facilities with the proceeds from the saleof the offered securities. The structuring of the offerings through the Carrington Securities securitization program isdone by the underwriters for each transaction.

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Carrington Securities sponsored its first securitization in May 2004. It sponsored two securitizations in thatyear, with an aggregate issuance of mortgage-backed securities representing interests in a pool of mortgage loanswith approxim