EXHIBIT 5 [LETTERHEAD OF CADWALADER, WICKERSHAM & TAFT LLP] June 30, 2006Morgan Stanley ABS Capital I Inc.1585 BroadwayNew York, New York 10036 Re: Morgan Stanley ABS Capital I Inc. Trust 2006-HE5 Mortgage Pass-Through Certificates, Series 2006-HE5 ———————————————————Ladies and Gentlemen: We have acted as special counsel to Morgan Stanley ABS Capital IInc. (the “Company”) in connection with the proposed sale by the Company andpurchase by Morgan Stanley & Co. Incorporated (the “Underwriter”) of certainclasses of the Morgan Stanley ABS Capital I Inc. Trust 2006-HE5 MortgagePass-Through Certificates, Series 2006-HE5 (such classes, the “Securities”),pursuant to the terms of the Underwriting Agreement, dated June 28, 2006 (the”Agreement”), between the Company and the Underwriter. The Securities are beingissued pursuant to a Pooling and Servicing Agreement, dated as of June 1, 2006(the “Pooling and Servicing Agreement”), among the Company, New Century MortgageCorporation, Countrywide Home Loans Servicing LP, HomEq Servicing Corporation,Wells Fargo Bank, National Association, NC Capital Corporation, Decision OneMortgage Company, LLC, WMC Mortgage Corp., LaSalle Bank National Association andDeutsche Bank National Trust Company. This letter is being delivered at therequest of the Company pursuant to Section V.B. of the Agreement. Capitalizedterms used herein but not defined herein have the respective meanings given themin the Agreement. In rendering the opinions set forth below, we have examined andrelied upon the originals, copies or specimens, certified or otherwiseidentified to our satisfaction, of the Pooling and Servicing Agreement and suchcertificates, corporate and public records, agreements and instruments and otherdocuments, including, among other things, the documents delivered on the datehereof, as we have deemed appropriate as a basis for the opinions expressedbelow. In such examination we have assumed the genuineness of all signatures,the authenticity of all documents, agreements and instruments submitted to us asoriginals, the conformity to original documents, agreements and instruments ofall documents, agreements and instruments submitted to us as copies orspecimens, the authenticity of the originals of such documents, agreements andinstruments submitted to us as copies or specimens, the conformity of the textof each document filed with the Securities and Exchange Commission (the”Commission”) through the Commission’s Electronic Data Gathering, Analysis andRetrieval System to the printed document reviewed by us, and the accuracy of thematters set forth in the documents, agreements and instruments we reviewed. Asto matters of fact relevant to the opinions expressed herein, we have reliedupon, and assumed the accuracy of, the representations and warranties containedin the Agreement and the Pooling and Servicing Agreement and we have relied uponcertificates and oral or written statements and other information obtained fromthe Company, the other parties to the transaction referenced herein, and publicofficials. Except as expressly set forth herein, we have not undertaken anyindependent investigation (including, without limitation, conducting any review,search or investigation of any public files, records or dockets) to determinethe existence or absence of the facts that are material to our opinions, and noinference as to our knowledge concerning such facts should be drawn from ourreliance on the representations of the Company and others in connection with thepreparation and delivery of this letter. We have also assumed that all documents, agreements and instrumentshave been duly authorized, executed and delivered by all parties thereto, thatall such parties are validly existing and in good standing under the laws oftheir respective jurisdictions of organization, that all such parties had thepower and legal right to execute and deliver all such documents, agreements andinstruments, and that such documents, agreements and instruments are legal,valid and binding obligations of such parties, enforceable against such partiesin accordance with their respective terms. As used herein, “to our knowledge”,”known to us” or words of similar import mean the actual knowledge, withoutindependent investigation, of any lawyer in our firm actively involved in thetransactions contemplated by the Agreement. We express no opinion concerning the laws of any jurisdiction otherthan the laws of the State of New York and, to the extent expressly referred toin this letter, the federal laws of the United States of America. Based upon and subject to the foregoing, we are of the opinion that: 1. The Securities have been duly authorized by the Company and, when the Securities have been duly executed, authenticated and delivered in the manner contemplated in the Pooling and Servicing Agreement and paid for by and sold to the Underwriter pursuant to the Agreement, the Securities will be validly issued and outstanding, fully paid and non-assessable and entitled to the benefits provided by the Pooling and Servicing Agreement. 2. The descriptions of federal income tax consequences appearing under the heading “Material Federal Income Tax Consequences” in the Prospectus, dated March 14, 2006 (the “Prospectus”) and “Federal Income Tax Considerations” in the Prospectus Supplement, dated June 28, 2006 (the “Prospectus Supplement”) accurately describe the material federal income tax consequences to holders of the Securities, under existing law and subject to the qualifications and assumptions stated therein. We also hereby confirm and adopt the opinions expressly set forth under such headings, under existing law and subject to the qualifications and assumptions stated therein. We hereby consent to the filing of this letter as an exhibit to theCompany’s Registration Statement on Form S-3 (File No. 333-130694) (the”Registration Statement”), as it relates to the Securities, and to the referenceto this firm under the headings “Legal Matters” and “Material Federal Income TaxConsequences” in the Prospectus and under the heading “Federal Income TaxConsiderations” in the Prospectus Supplement. This consent is not to beconstrued as an admission that we are a person whose consent is required to befiled with the Registration Statement under the provisions of the Securities Actof 1933, as amended. In addition, we disclaim any obligation to update this letter forchanges in fact or law, or otherwise. Very truly yours, /s/ Cadwalader, Wickersham & Taft LLP