

                                    UNITED STATES
                          SECURITIES AND EXCHANGE COMMISSION
                                Washington, D.C. 20549

                                      FORM 8-K

                                   CURRENT REPORT
        Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

             Date of Report (Date of earliest event reported): December 27, 2004
                             (Date of earliest event reported)


                                MORGAN STANLEY ABS CAPITAL I INC.
              (as Depositor under the Pooling and Servicing Agreement, dated as
               May 1, 2004, providing for the issuance of Mortgage Pass-Through
                              Certificates, Series 2004-HE3)
                      (Exact name of registrant as specified in charter)



                                         DELAWARE
                     (State or Other Jurisdiction of Incorporation)

               333-113543-05                        13-3939229
          (Commission File Number)        (I.R.S. Employer Identification No.)


           1585 BROADWAY, 2ND FLOOR
           NEW YORK, NEW YORK                             10036
          (Address of principal executive offices)     (Zip Code)


          Registrant's Telephone Number, Including Area Code:  (212) 761-4000


             (Former name or former address, if changed since last report.)


     Check the appropriate box below if the Form 8-K filing is intended to
     simultaneously satisfy the filing obligation of the registrant under any
     of the following provisions (see General Instruction A.2. below):

     [  ] Written communications pursuant to Rule 425 under the Securities Act
     (17 CFR 230.425)

     [  ] Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act
     (17 CFR 240.14a-12(b))

     [  ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
     Exchange Act (17 CFR 240.14d-2(b))

     [  ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
     Exchange Act (17 CFR 240.13e-4(c))


     Item 8.01 Other Events.

     This current report on Form 8-K relates to the monthly distribution reported to the holders of
     Morgan Stanley ABS Capital I Inc. Mortgage Pass-Through Certificates, Series 2004-HE3, which
     was made on May 1, 2004


     Item 9.01 Financial Statements and Exhibits.

     (c) Exhibits

     Exhibit No. Description

     99.1 Monthly Remittance Statement to the Certificateholders dated as of
     December 27, 2004.


                                  SIGNATURES


    Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly
    caused this report to be signed on behalf of the Registrant by the undersigned thereunto duly
    authorized.



     DEUTSCHE BANK NATIONAL TRUST COMPANY, IN ITS CAPACITY AS TRUSTEE UNDER THE
     POOLING AND SERVICING AGREEMENT ON BEHALF OF MORGAN STANLEY ABS CAPITAL I INC.,
     REGISTRANT



          Date:  Dec 27, 2004               By:  /s/  Katherine M. Wannenmacher
                                            Katherine M. Wannenmacher
                                            Vice President



                                   EXHIBIT INDEX

         DOCUMENT

         99.1 Monthly Remittance Statement to the Certificateholders dated as of
              December 27, 2004.


	Morgan Stanley ABS Capital I Inc. 2004-HE3
	Mortgage Pass-Through Certificates


	December 27, 2004 Distribution


	Contents



			TABLE OF CONTENTS

								Page

			1.	Contents				1
			2.	Certificate Payment Report				2
			3.	Collection Account Report				4
			4.	Credit Enhancement Report				7
			5.	Collateral Report				8
			6.	Delinquency Report				11
			7.	REO Report				14
			8.	Foreclosure Report				15
			9.	Prepayment Report				16
			10.	Prepayment Detail Report				19
			11.	Realized Loss Report				24
			12.	Realized Loss Detail Report				27
			13.	Triggers, Adj. Rate Cert. and Miscellaneous Report				28
			14.	Other Related Information				29



				Total Number of Pages				29



			CONTACTS

				Administrator: Kumar Khambhaita
				Direct Phone Number: (714)247-6327
				Address: Deutsche Bank
				1761 E. St. Andrew Place, Santa Ana, CA 92705

				Web Site: https://www.tss.db.com/invr
				Factor Information: (800) 735-7777
				Main Phone Number: (714) 247-6000



ISSUANCE INFORMATION

	Seller:		Morgan Stanley					Cut-Off Date: May 1, 2004
	Certificate Insurer(s):							Closing Date: May 27, 2004
								First Payment Date: June 25, 2004
	Servicer(s):		Chase Manhattan Mortgage Master Servicer
			HomeQ Servicing Corp. Master Servicer

								Distribution Date: December 27, 2004
	Underwriter(s):		Morgan Stanley Underwriter					Record Date: December 24, 2004
			Countrywide Securities Underwriter					November 30, 2004
			Utendahl Capital Partners, L.P. Underwriter





						Page 1 of 29					© COPYRIGHT 2004 Deutsche Bank
	Morgan Stanley ABS Capital I Inc. 2004-HE3
	Mortgage Pass-Through Certificates
	REMIC II Series 2004-HE3
	Certificate Payment Report for December 27, 2004 Distribution


	Distribution in Dollars - Current Period
					Prior						Current
	Class	Original			Principal			Total	Realized	Deferred	Principal
Class	Type	Face Value			Balance	Interest	Principal	Distribution	Losses	Interest	Balance
					(1)	(2)	(3)	(4)=(2)+(3)	(5)	(6)	(7)=(1)-(3)-(5)+(6)

A-1		525,480,000.00			416,211,656.10	935,661.49	21,809,859.08	22,745,520.57	-	-	394,401,797.02
A-2		21,149,000.00			21,149,000.00	47,908.08	-	47,908.08	-	-	21,149,000.00
A-3		195,000,000.00			107,564,013.82	214,021.10	21,438,218.16	21,652,239.26	-	-	86,125,795.66
A-4		236,251,000.00			236,251,000.00	524,999.14	-	524,999.14	-	-	236,251,000.00
M-1		75,670,000.00			75,670,000.00	179,231.81	-	179,231.81	-	-	75,670,000.00
M-2		40,745,000.00			40,745,000.00	120,366.99	-	120,366.99	-	-	40,745,000.00
M-3		11,641,000.00			11,641,000.00	36,895.35	-	36,895.35	-	-	11,641,000.00
B-1		11,641,000.00			11,641,000.00	42,408.66	-	42,408.66	-	-	11,641,000.00
B-2		11,641,000.00			11,641,000.00	45,917.13	-	45,917.13	-	-	11,641,000.00
B-3		11,641,000.00			11,641,000.00	59,449.79	-	59,449.79	-	-	11,641,000.00
X		23,284,832.00			23,282,876.16	3,100,659.23	-	3,100,659.23	-	-	23,282,876.16
P		-			-	909,128.06	-	909,128.06	-	-	-
R		-			-	-	-	-	-	-	-


Total		1,164,143,832.00			967,437,546.08	6,216,646.83	43,248,077.24	49,464,724.07	-	-	924,189,468.84


	Interest Accrual Detail				Current Period Factor Information per $1,000 of Original Face
						Orig. Principal	Prior				Current
	Period	Period				(with Notional)	Principal			Total	Principal
Class	Starting	Ending		Method	Cusip	Balance	Balance	Interest	Principal	Distribution	Balance
							(1)	(2)	(3)	(4)=(2)+(3)	(5)

A-1	11/26/04	12/26/04		A-Act/360	61744CDD5	525,480,000.00	792.059938	1.780584	41.504642	43.285226	750.555296
A-2	11/26/04	12/26/04		A-Act/360	61744CDE3	21,149,000.00	1,000.000000	2.265265	-	2.265265	1,000.000000
A-3	11/26/04	12/26/04		A-Act/360	61744CDF0	195,000,000.00	551.610327	1.097544	109.939580	111.037124	441.670747
A-4	11/26/04	12/26/04		A-Act/360	61744CDG8	236,251,000.00	1,000.000000	2.222209	-	2.222209	1,000.000000
M-1	11/26/04	12/26/04		A-Act/360	61744CDH6	75,670,000.00	1,000.000000	2.368598	-	2.368598	1,000.000000
M-2	11/26/04	12/26/04		A-Act/360	61744CDJ2	40,745,000.00	1,000.000000	2.954154	-	2.954154	1,000.000000
M-3	11/26/04	12/26/04		A-Act/360	61744CDK9	11,641,000.00	1,000.000000	3.169431	-	3.169431	1,000.000000
B-1	11/26/04	12/26/04		A-Act/360	61744CDL7	11,641,000.00	1,000.000000	3.643043	-	3.643043	1,000.000000
B-2	11/26/04	12/26/04		A-Act/360	61744CDM5	11,641,000.00	1,000.000000	3.944432	-	3.944432	1,000.000000
B-3	11/26/04	12/26/04		A-Act/360	61744CDN3	11,641,000.00	1,000.000000	5.106932	-	5.106932	1,000.000000
X				A-Act/360		23,284,832.00	999.916004	133.162190	-	133.162190	999.916004
P				A-30/Act		-	-	-	-	-	-
R				A-30/Act		-	-	-	-	-	-


							Page 2 of 29				© COPYRIGHT 2004 Deutsche Bank
	Morgan Stanley ABS Capital I Inc. 2004-HE3
	Mortgage Pass-Through Certificates
	REMIC II Series 2004-HE3
	Certificate Payment Report for December 27, 2004 Distribution


	Distribution in Dollars - to Date
											Current
	Original				Unscheduled	Scheduled	Total	Total	Realized	Deferred	Principal
Class	Face Value		Interest		Principal	Principal	Principal	Distribution	Losses	Interest	Balance
	(1)		(2)		(3)	(4)	(5)=(3)+(4)	(6)=(2)+(5)	(7)	(8)	(9)=(1)-(5)-(7)+(8)

A-1	525,480,000.00		5,772,300.68		127,363,986.62	3,714,216.36	131,078,202.98	136,850,503.66	-	-	394,401,797.02
A-2	21,149,000.00		262,162.14		-	-	-	262,162.14	-	-	21,149,000.00
A-3	195,000,000.00		1,567,894.11		105,824,925.12	3,049,279.22	108,874,204.34	110,442,098.45	-	-	86,125,795.66
A-4	236,251,000.00		2,858,338.69		-	-	-	2,858,338.69	-	-	236,251,000.00
M-1	75,670,000.00		991,980.15		-	-	-	991,980.15	-	-	75,670,000.00
M-2	40,745,000.00		698,838.48		-	-	-	698,838.48	-	-	40,745,000.00
M-3	11,641,000.00		216,960.60		-	-	-	216,960.60	-	-	11,641,000.00
B-1	11,641,000.00		255,020.21		-	-	-	255,020.21	-	-	11,641,000.00
B-2	11,641,000.00		279,239.95		-	-	-	279,239.95	-	-	11,641,000.00
B-3	11,641,000.00		372,658.97		-	-	-	372,658.97	-	-	11,641,000.00
X	23,284,832.00		28,162,068.78		1,860.88	94.96	1,955.84	28,164,024.62	-	-	23,282,876.16
P	-		4,527,605.23		-	-	-	4,527,605.23	-	-	-
R	-		-		-	-	-	-	-	-	-


Total	1,164,143,832.00		45,965,067.99		233,190,772.62	6,763,590.54	239,954,363.16	285,919,431.15	-	-	924,189,468.84


	Interest Detail
	Pass-	Prior Principal				Non-	Prior	Unscheduled		Paid or	Current
	Through	(with Notional)			Accrued	Supported	Unpaid	Interest	Optimal	Deferred	Unpaid
Class	Rate	Balance			Interest	Interest SF	Interest	Adjustments	Interest	Interest	Interest
					(1)	(2)	(3)	(4)	(5)=(1)-(2)+(3)+(4)	(6)	(7)=(5)-(6)

A-1	2.61063%	416,211,656.10			935,661.49	-	-	-	935,661.49	935,661.49	-
A-2	2.63063%	21,149,000.00			47,908.08	-	-	-	47,908.08	47,908.08	-
A-3	2.31063%	107,564,013.82			214,021.10	-	-	-	214,021.10	214,021.10	-
A-4	2.58063%	236,251,000.00			524,999.14	-	-	-	524,999.14	524,999.14	-
M-1	2.75063%	75,670,000.00			179,231.81	-	-	-	179,231.81	179,231.81	-
M-2	3.43063%	40,745,000.00			120,366.99	-	-	-	120,366.99	120,366.99	-
M-3	3.68063%	11,641,000.00			36,895.35	-	-	-	36,895.35	36,895.35	-
B-1	4.23063%	11,641,000.00			42,408.66	-	-	-	42,408.66	42,408.66	-
B-2	4.58063%	11,641,000.00			45,917.13	-	-	-	45,917.13	45,917.13	-
B-3	5.93063%	11,641,000.00			59,449.79	-	-	-	59,449.79	59,449.79	-
X		23,282,876.16			3,100,659.23	-	-	-	3,100,659.23	3,100,659.23	-
P		-			909,128.06	-	-	-	909,128.06	909,128.06	-
R		-			-	-	-	-	-	-	-


Total		967,437,546.08			6,216,646.83	-	-	-	6,216,646.83	6,216,646.83	-


							Page 3 of 29				© COPYRIGHT 2004 Deutsche Bank
	Morgan Stanley ABS Capital I Inc. 2004-HE3
	Mortgage Pass-Through Certificates
	Series 2004-HE3
	Collection Account Report for December 27, 2004 Distribution


	Collection Account Report


SUMMARY						GROUP 2	GROUP 1	TOTAL

	Principal Collections					21,438,214.32	21,809,855.17	43,248,069.49
	Principal Other Accounts					0.00	0.00	0.00
	TOTAL NET PRINCIPAL					21,438,214.32	21,809,855.17	43,248,069.49

	Interest Collections					2,393,773.29	3,014,254.38	5,408,027.67
	Interest Withdrawals					0.00	0.00	0.00
	Interest Other Accounts					0.00	0.00	0.00
	Interest Fees					(48,595.50)	(51,905.65)	(100,501.15)
	TOTAL NET INTEREST					2,345,177.79	2,962,348.73	5,307,526.52

	TOTAL PRINCIPAL & INTEREST DISTRIBUTABLE					23,783,392.11	24,772,203.90	48,555,596.01

	Prepayment Penalties Collected							909,128.06

	TOTAL AVAILABLE FUNDS FOR DISTRIBUTION							49,464,724.07


PRINCIPAL - COLLECTIONS						GROUP 2	GROUP 1	TOTAL

	Scheduled Principal Received					389,236.58	494,690.69	883,927.27
	Prepayments In Full					20,847,163.36	21,289,059.36	42,136,222.72
	Curtailments					102,517.14	26,105.12	128,622.26
	Liquidations					99,304.99	0.00	99,304.99
	Insurance Principal					0.00	0.00	0.00
	Repurchased Principal Amounts					0.00	0.00	0.00
	Other Principal					0.00	0.00	0.00
	Total Realized Loss Of Principal					(7.75)	0.00	(7.75)
	Delinquent Principal					(302,880.77)	(399,577.47)	(702,458.24)
	Advanced Principal					302,880.77	399,577.47	702,458.24
	Closing Date Deposit Amount					0.00	0.00	0.00

	TOTAL PRINCIPAL COLLECTED					21,438,214.32	21,809,855.17	43,248,069.49


				Page 4 of 29				© COPYRIGHT 2004 Deutsche Bank
	Morgan Stanley ABS Capital I Inc. 2004-HE3
	Mortgage Pass-Through Certificates
	Series 2004-HE3
	Collection Account Report for December 27, 2004 Distribution


	Collection Account Report


PRINCIPAL - WITHDRAWALS						GROUP 2	GROUP 1	TOTAL
SPACE INTENTIONALLY LEFT BLANK


PRINCIPAL - OTHER ACCOUNTS						GROUP 2	GROUP 1	TOTAL
SPACE INTENTIONALLY LEFT BLANK


INTEREST - COLLECTIONS						GROUP 2	GROUP 1	TOTAL

	Scheduled Interest					2,523,351.00	3,189,725.28	5,713,076.28
	Liquidation Interest					659.96	0.00	659.96
	Repurchased Interest					0.00	0.00	0.00
	Insurance Interest					0.00	0.00	0.00
	Other Interest					0.00	0.00	0.00
	Relief Act Interest Shortfalls					0.00	0.00	0.00
	Net Prepayment Interest Shortfalls					0.00	0.00	0.00
	Delinquent Interest					(1,853,326.89)	(2,475,785.49)	(4,329,112.38)
	Interest Advanced					1,723,089.22	2,300,314.59	4,023,403.81

	TOTAL INTEREST COLLECTED					2,393,773.29	3,014,254.38	5,408,027.67


				Page 5 of 29				© COPYRIGHT 2004 Deutsche Bank
	Morgan Stanley ABS Capital I Inc. 2004-HE3
	Mortgage Pass-Through Certificates
	Series 2004-HE3
	Collection Account Report for December 27, 2004 Distribution


	Collection Account Report


INTEREST - WITHDRAWALS						GROUP 2	GROUP 1	TOTAL

	Trust Fund Expenses							0.00
	Nonrecoverable Advances					0.00	0.00	0.00
	Reimbursements to Master Servicer							0.00

	TOTAL INTEREST WITHDRAWALS					0.00	0.00	0.00


INTEREST - OTHER ACCOUNTS						GROUP 2	GROUP 1	TOTAL


	TOTAL INTEREST OTHER ACCOUNTS					0.00	0.00	0.00


INTEREST - FEES						GROUP 2	GROUP 1	TOTAL

	Current Servicing Fees					47,211.14	50,145.84	97,356.98
	Trustee Fees					1,384.36	1,759.81	3,144.17



	TOTAL INTEREST OTHER FEES					48,595.50	51,905.65	100,501.15


				Page 6 of 29				© COPYRIGHT 2004 Deutsche Bank
	Morgan Stanley ABS Capital I Inc. 2004-HE3
	Mortgage Pass-Through Certificates
	Series 2004-HE3
	Credit Enhancement Report for December 27, 2004 Distribution


	Credit Enhancement Report


ACCOUNTS						GROUP 2	GROUP 1	TOTAL

	Excess Reserve Fund Balance (Ending)							0.00


INSURANCE						GROUP 2	GROUP 1	TOTAL
SPACE INTENTIONALLY LEFT BLANK


STRUCTURAL FEATURES						GROUP 2	GROUP 1	TOTAL

	Beginning Subordinated Amount							23,282,868.90
	Ending Subordinated Amount							23,282,876.65
	Specified Subordinated Amount							23,282,876.65
	Subordination Reduction Amount							0.00
	Subordination Deficiency Amount							7.75

	Senior Enhancement Percentage							20.15%


				Page 7 of 29				© COPYRIGHT 2004 Deutsche Bank
	Morgan Stanley ABS Capital I Inc. 2004-HE3
	Mortgage Pass-Through Certificates
	Series 2004-HE3
	Collateral Report for December 27, 2004 Distribution


	Collateral Report


COLLATERAL						GROUP 2	GROUP 1	TOTAL
	Loan Count:
	*Original*					2966	4088	7054
	Prior					2,558	3,531	6,089
	Prefunding					-	-	-
	Scheduled Paid Offs					-	-	-
	Full Voluntary Prepayments					(97)	(116)	(213)
	Repurchases					-	-	-
	Liquidations					(1)	-	(1)
	Current					2,460	3,415	5,875

	*Principal Balance:*
	Original					513,349,413.32	650,718,381.69	1,164,067,795.01
	Prior					425,957,363.67	541,480,182.90	967,437,546.57
	Prefunding					-	-	-
	Scheduled Principal					(389,236.58)	(494,690.69)	(883,927.27)
	Partial and Full Voluntary Prepayments					(20,949,680.50)	(21,315,164.48)	(42,264,844.98)
	Repurchases					-	-	-
	Liquidations					(99,304.99)	-	(99,304.99)
	Current					404,519,141.60	519,670,327.73	924,189,469.33

PREFUNDING						GROUP 2	GROUP 1	TOTAL
SPACE INTENTIONALLY LEFT BLANK


	Group 1
	Group 2
Current Prin Balance by Groups (in millions of dollars)					Total Current Principal Balance (in millions of dollars)


				Page 8 of 29				© COPYRIGHT 2004 Deutsche Bank
	Morgan Stanley ABS Capital I Inc. 2004-HE3
	Mortgage Pass-Through Certificates
	Series 2004-HE3
	Collateral Report for December 27, 2004 Distribution


	Collateral Report


CHARACTERISTICS						GROUP 2	GROUP 1	TOTAL

	Weighted Average Coupon Original					7.150011%	7.093524%	7.118435%
	Weighted Average Coupon Prior					7.126054%	7.069515%	7.094370%
	Weighted Average Coupon Current					7.110602%	7.068902%	7.087262%
	Weighted Average Months to Maturity Original					346	351	349
	Weighted Average Months to Maturity Prior					340	345	343
	Weighted Average Months to Maturity Current					339	344	342
	Weighted Avg Remaining Amortization Term Original					346	350	348
	Weighted Avg Remaining Amortization Term Prior					340	345	343
	Weighted Avg Remaining Amortization Term Current					339	344	341
	Weighted Average Seasoning Original					4.46	4.35	4.40
	Weighted Average Seasoning Prior					9.43	9.35	9.38
	Weighted Average Seasoning Current					10.43	10.34	10.38

Note: Original information refers to deal issue.


	Group 1
	Group 2
WAC by Groups					Total WAC


WARAT by Groups					Total WARAT


Note: Dates correspond to distribution dates.
				Page 9 of 29				© COPYRIGHT 2004 Deutsche Bank
	Morgan Stanley ABS Capital I Inc. 2004-HE3
	Mortgage Pass-Through Certificates
	Series 2004-HE3
	Collateral Report for December 27, 2004 Distribution


	Collateral Report


ARM CHARACTERISTICS						GROUP 2	GROUP 1	TOTAL

	Weighted Average Margin Original					3.677%	4.257%
	Weighted Average Margin Prior					3.536%	4.131%
	Weighted Average Margin Current					3.513%	4.110%
	Weighted Average Max Rate Original					8.861%	10.285%
	Weighted Average Max Rate Prior					8.514%	9.991%
	Weighted Average Max Rate Current					8.462%	9.937%
	Weighted Average Min Rate Original					4.627%	5.344%
	Weighted Average Min Rate Prior					4.441%	5.184%
	Weighted Average Min Rate Current					4.409%	5.156%
	Weighted Average Cap Up Original					0.853%	0.974%
	Weighted Average Cap Up Prior					0.815%	0.948%
	Weighted Average Cap Up Current					0.812%	0.942%
	Weighted Average Cap Down Original					0.853%	0.974%
	Weighted Average Cap Down Prior					0.815%	0.948%
	Weighted Average Cap Down Current					0.812%	0.942%

Note: Original information refers to deal issue.

SERVICING FEES / ADVANCES						GROUP 2	GROUP 1	TOTAL

	Current Servicing Fees					47,211.14	50,145.84	97,356.98
	Delinquent Servicing Fees					130,237.67	175,470.90	305,708.57
	TOTAL SERVICING FEES					177,448.81	225,616.74	403,065.55

	Prepayment Interest Shortfall					19,968.59	24,340.42	44,309.01
	Compensating Interest					(19,968.59)	(24,340.42)	(44,309.01)
	Delinquent Servicing Fees					(130,237.67)	(175,470.90)	(305,708.57)

	COLLECTED SERVICING FEES					47,211.14	50,145.84	97,356.98


	Aggregate Advances with respect to this Distribution					2,025,969.99	2,699,892.06	4,725,862.05
	Current Nonrecoverable Advances					0.00	0.00	0.00


ADDITIONAL COLLATERAL INFORMATION						GROUP 2	GROUP 1	TOTAL

	Net Prepayment Interest Shortfall							0.00

	Net Monthly Excess Cash Flow							0.00


	Ending Pool Stated Principal Balance					404,519,141.60	519,670,327.73	924,189,469.33


				Page 10 of 29				© COPYRIGHT 2004 Deutsche Bank
	Morgan Stanley ABS Capital I Inc. 2004-HE3
	Mortgage Pass-Through Certificates
	Series 2004-HE3
	Delinquency Report for December 27, 2004 Distribution


	Delinquency Report - Total


				<1 PAYMENT	1 PAYMENT	2 PAYMENTS	3+ PAYMENTS	TOTAL
DELINQUENT		Balance			25,330,216.62	9,614,695.72	1,770,239.67	36,715,152.01
		% Balance			2.74%	1.04%	0.19%	3.97%
		# Loans			166	63	14	243
		% # Loans			2.83%	1.07%	0.24%	4.14%
FORECLOSURE		Balance		510,537.43	-	2,071,619.36	11,978,329.23	14,560,486.02
		% Balance		0.06%	0.00%	0.22%	1.30%	1.58%
		# Loans		4	-	12	87	103
		% # Loans		0.07%	0.00%	0.20%	1.48%	1.75%
BANKRUPTCY		Balance		4,481,498.00	324,137.43	554,354.36	2,549,836.37	7,909,826.16
		% Balance		0.48%	0.04%	0.06%	0.28%	0.86%
		# Loans		31	3	4	18	56
		% # Loans		0.53%	0.05%	0.07%	0.31%	0.95%
REO		Balance		-	-	-	513,361.48	513,361.48
		% Balance		0.00%	0.00%	0.00%	0.06%	0.06%
		# Loans		-	-	-	6	6
		% # Loans		0.00%	0.00%	0.00%	0.10%	0.10%

TOTAL		Balance		4,992,035.43	25,654,354.05	12,240,669.44	16,811,766.75	59,698,825.67
		% Balance		0.54%	2.78%	1.32%	1.82%	6.46%
		# Loans		35	169	79	125	408
		% # Loans		0.60%	2.88%	1.34%	2.13%	6.94%
Note: <1 Payment = 0-30days, 1 Payment = 31-60days, 2 Payments = 61-90days, 3+ Payments = 91+
								6 Months Moving Average
1 or 2 Payments Delinquent					3 or More Payments Delinquent


Total Foreclosure					Total Bankruptcy and REO


Note: Dates correspond to distribution dates.
				Page 11 of 29				© COPYRIGHT 2004 Deutsche Bank
	Morgan Stanley ABS Capital I Inc. 2004-HE3
	Mortgage Pass-Through Certificates
	Series 2004-HE3
	Delinquency Report for December 27, 2004 Distribution


	Delinquency Report - Group 1 Group


				<1 PAYMENT	1 PAYMENT	2 PAYMENTS	3+ PAYMENTS	TOTAL
DELINQUENT		Balance			12,779,002.80	5,964,386.69	1,037,190.82	19,780,580.31
		% Balance			2.46%	1.15%	0.20%	3.81%
		# Loans			94	41	7	142
		% # Loans			2.75%	1.20%	0.20%	4.16%
FORECLOSURE		Balance		226,663.99	-	910,876.41	7,040,868.59	8,178,408.99
		% Balance		0.04%	0.00%	0.18%	1.35%	1.57%
		# Loans		2	-	6	52	60
		% # Loans		0.06%	0.00%	0.18%	1.52%	1.76%
BANKRUPTCY		Balance		2,555,637.31	122,725.44	554,354.36	1,615,001.87	4,847,718.98
		% Balance		0.49%	0.02%	0.11%	0.31%	0.93%
		# Loans		22	1	4	11	38
		% # Loans		0.64%	0.03%	0.12%	0.32%	1.11%
REO		Balance		-	-	-	392,678.53	392,678.53
		% Balance		0.00%	0.00%	0.00%	0.08%	0.08%
		# Loans		-	-	-	4	4
		% # Loans		0.00%	0.00%	0.00%	0.12%	0.12%

TOTAL		Balance		2,782,301.30	12,901,728.24	7,429,617.46	10,085,739.81	33,199,386.81
		% Balance		0.54%	2.48%	1.43%	1.94%	6.39%
		# Loans		24	95	51	74	244
		% # Loans		0.70%	2.78%	1.49%	2.17%	7.14%
Note: <1 Payment = 0-30days, 1 Payment = 31-60days, 2 Payments = 61-90days, 3+ Payments = 91+
								6 Months Moving Average
1 or 2 Payments Delinquent					3 or More Payments Delinquent


Total Foreclosure					Total Bankruptcy and REO


Note: Dates correspond to distribution dates.
				Page 12 of 29				© COPYRIGHT 2004 Deutsche Bank
	Morgan Stanley ABS Capital I Inc. 2004-HE3
	Mortgage Pass-Through Certificates
	Series 2004-HE3
	Delinquency Report for December 27, 2004 Distribution


	Delinquency Report - Group 2 Group


				<1 PAYMENT	1 PAYMENT	2 PAYMENTS	3+ PAYMENTS	TOTAL
DELINQUENT		Balance			12,551,213.82	3,650,309.03	733,048.85	16,934,571.70
		% Balance			3.10%	0.90%	0.18%	4.19%
		# Loans			72	22	7	101
		% # Loans			2.93%	0.89%	0.28%	4.11%
FORECLOSURE		Balance		283,873.44	-	1,160,742.95	4,937,460.64	6,382,077.03
		% Balance		0.07%	0.00%	0.29%	1.22%	1.58%
		# Loans		2	-	6	35	43
		% # Loans		0.08%	0.00%	0.24%	1.42%	1.75%
BANKRUPTCY		Balance		1,925,860.69	201,411.99	-	934,834.50	3,062,107.18
		% Balance		0.48%	0.05%	0.00%	0.23%	0.76%
		# Loans		9	2	-	7	18
		% # Loans		0.37%	0.08%	0.00%	0.28%	0.73%
REO		Balance		-	-	-	120,682.95	120,682.95
		% Balance		0.00%	0.00%	0.00%	0.03%	0.03%
		# Loans		-	-	-	2	2
		% # Loans		0.00%	0.00%	0.00%	0.08%	0.08%

TOTAL		Balance		2,209,734.13	12,752,625.81	4,811,051.98	6,726,026.94	26,499,438.86
		% Balance		0.55%	3.15%	1.19%	1.66%	6.55%
		# Loans		11	74	28	51	164
		% # Loans		0.45%	3.01%	1.14%	2.07%	6.67%
Note: <1 Payment = 0-30days, 1 Payment = 31-60days, 2 Payments = 61-90days, 3+ Payments = 91+
								6 Months Moving Average
1 or 2 Payments Delinquent					3 or More Payments Delinquent


Total Foreclosure					Total Bankruptcy and REO


Note: Dates correspond to distribution dates.
				Page 13 of 29				© COPYRIGHT 2004 Deutsche Bank
	Morgan Stanley ABS Capital I Inc. 2004-HE3
	Mortgage Pass-Through Certificates
	Series 2004-HE3
	REO Report for December 27, 2004 Distribution


	REO Report - Mortgage Loans that Become REO During Current Distribution


SUMMARY				LOAN GROUP

Total Loan Count = 3				Loan Group 1 = Group 1; REO Book Value = Not Available
Total Original Principal Balance = 301,625.00				Loan Group 2 = Group 2; REO Book Value = Not Available
Total Current Balance = 299,779.22
REO Book Value = Not Available

REO Book Value reported corresponds to total REO loans, including loans that become REO during current distribution.

Loan Number		Original	Stated		Current	State &
&		Principal	Principal	Paid to	Note	LTV at	Original	Origination
Loan Group		Balance	Balance	Date	Rate	Origination	Term	Date

1303621 1		84,800.00	84,410.38	May-01-04	10.000%	MI - 80.00%	360	Jan-30-04
1339308 1		131,325.00	130,327.82	Apr-01-04	8.500%	CO - 85.00%	360	Jan-29-04
1282993 2		85,500.00	85,041.02	Jun-01-04	9.250%	MI - 90.00%	360	Jan-26-04


				Page 14 of 29				© COPYRIGHT 2004 Deutsche Bank
	Morgan Stanley ABS Capital I Inc. 2004-HE3
	Mortgage Pass-Through Certificates
	Series 2004-HE3
	Foreclosure Report for December 27, 2004 Distribution


	Foreclosure Report - Mortgage Loans that Become Foreclosure During Current Distribution


SUMMARY				LOAN GROUP

Total Loan Count = 40				Loan Group 1 = Group 1
Total Original Principal Balance = 5,562,547.00				Loan Group 2 = Group 2
Total Current Balance = 5,460,761.01


Loan Number		Original	Stated		Current	State &
&		Principal	Principal	Paid to	Note	LTV at	Original	Origination
Loan Group		Balance	Balance	Date	Rate	Origination	Term	Date

1211333 1		87,450.00	86,891.85	Jul-01-04	8.400%	CA - 54.66%	360	Jan-22-04
1268241 1		210,000.00	208,117.83	Aug-01-04	7.000%	NJ - 100.00%	360	Jan-12-04
1286625 1		201,600.00	199,388.45	Mar-01-04	5.600%	AZ - 80.00%	360	Jan-12-04
1293917 1		70,200.00	69,584.98	Jul-01-04	7.000%	IN - 90.00%	360	Jan-28-04
1302413 1		50,000.00	49,031.80	Jul-01-04	7.150%	IN - 90.91%	240	Jan-27-04
1310040 1		105,120.00	104,260.72	May-01-04	7.150%	OR - 80.00%	360	Jan-30-04
1317471 1		164,815.00	163,730.80	Jun-01-04	8.250%	MN - 85.00%	360	Jan-30-04
1338237 1		215,120.00	212,360.75	Jul-01-04	5.975%	TX - 80.00%	360	Jan-30-04
1345998 1		194,200.00	192,643.17	Aug-01-04	7.250%	TX - 80.00%	360	Jan-30-04
7485042 1		82,500.00	81,585.38	Jul-01-04	6.225%	VA - 66.00%	360	Dec-23-03
8355460 1		64,800.00	64,383.13	Jul-01-04	8.850%	TX - 80.00%	360	Jan-06-04
8611432 1		122,400.00	121,108.32	Jun-01-04	6.330%	PA - 80.00%	360	Jan-06-04
8667411 1		150,000.00	148,861.63	Jul-01-04	7.530%	FL - 83.33%	360	Jan-22-04
8691061 1		104,000.00	103,206.03	Aug-01-04	7.500%	FL - 80.00%	360	Jan-22-04
8692769 1		103,500.00	102,744.89	Jul-01-04	7.730%	IL - 90.00%	360	Jan-27-04
8717044 1		85,500.00	85,084.25	Aug-01-04	9.780%	TX - 95.00%	360	Jan-15-04
8757429 1		133,000.00	132,078.50	Jul-01-04	7.990%	VA - 84.98%	360	Jan-26-04
8788383 1		244,375.00	241,634.23	Jul-01-04	5.480%	FL - 85.00%	360	Jan-16-04
8789207 1		94,400.00	93,533.09	Jul-01-04	6.560%	TX - 80.00%	360	Jan-20-04
8792054 1		188,800.00	187,110.08	Aug-01-04	6.680%	FL - 77.70%	360	Jan-28-04
8808864 1		240,000.00	237,984.12	Jul-01-04	7.010%	GA - 80.00%	360	Jan-23-04
8850550 1		98,057.00	97,001.03	Jun-01-04	5.700%	TX - 80.00%	360	Jan-28-04
8970564 1		135,920.00	134,715.05	Aug-01-04	6.730%	VA - 80.00%	360	Feb-03-04
310078249 1		124,000.00	123,188.01	Dec-01-04	8.990%	TX - 80.00%	360	Dec-04-03
311078318 1		104,250.00	103,475.98	Dec-01-04	8.590%	TX - 75.00%	360	Dec-03-03
1256705 2		447,000.00	442,819.44	Aug-01-04	6.450%	IL - 74.50%	360	Jan-30-04
1269494 2		75,200.00	73,827.09	Aug-01-04	7.650%	TX - 80.00%	240	Jan-28-04
1279185 2		50,100.00	48,436.29	Aug-01-04	6.700%	NY - 77.08%	180	Jan-26-04
1284288 2		229,500.00	227,714.95	Jul-01-04	7.500%	NY - 85.00%	360	Jan-28-04
1284737 2		117,300.00	116,459.15	Aug-01-04	7.825%	LA - 85.00%	360	Jan-14-04
1334892 2		447,320.00	441,878.74	Aug-01-04	5.525%	TX - 80.01%	360	Jan-30-04
7586841 2		35,000.00	34,874.01	Jul-01-04	11.150%	OK - 83.33%	360	Jan-09-04
7655940 2		101,520.00	100,861.56	Jun-01-04	8.810%	OH - 80.00%	360	Dec-16-03
8667136 2		50,600.00	-	Dec-01-04	11.030%	FL - 46.42%	360	Jan-23-04
8684375 2		152,000.00	151,110.83	Jul-01-04	8.830%	KS - 95.00%	360	Jan-20-04
8726957 2		145,200.00	144,065.14	Jul-01-04	7.380%	NY - 80.00%	360	Jan-15-04
8732949 2		132,800.00	131,424.80	Jul-01-04	5.910%	MN - 80.00%	360	Jan-30-04
8739919 2		37,500.00	37,322.24	Aug-01-04	9.850%	TX - 72.12%	360	Jan-28-04
8800464 2		89,300.00	88,797.91	Jul-01-04	9.030%	TX - 95.00%	360	Jan-28-04
311190442 2		78,200.00	77,464.79	Dec-01-04	7.400%	OH - 85.00%	360	Dec-03-03


				Page 15 of 29				© COPYRIGHT 2004 Deutsche Bank
	Morgan Stanley ABS Capital I Inc. 2004-HE3
	Mortgage Pass-Through Certificates
	Series 2004-HE3
	Prepayment Report for December 27, 2004 Distribution


	Prepayment Report - Voluntary Prepayments


VOLUNTARY PREPAYMENTS						GROUP 2	GROUP 1	TOTAL

	*Current*
	Number of Paid in Full Loans					97	116	213
	Number of Repurchased Loans					-	-	-
	Total Number of Loans Prepaid in Full					97	116	213

	Paid in Full Balance					20,847,163.36	21,289,059.36	42,136,222.72
	Repurchased Loans Balance					-	-	-
	Curtailments Amount					102,517.14	26,105.12	128,622.26
	Total Prepayment Amount					20,949,680.50	21,315,164.48	42,264,844.98

	*Cumulative*
	Number of Paid in Full Loans					502	669	1,171
	Number of Repurchased Loans					-	-	-
	Total Number of Loans Prepaid in Full					502	669	1,171

	Paid in Full Balance					104,467,088.30	126,216,965.50	230,684,053.80
	Repurchased Loans Balance					-	-	-
	Curtailments Amount					1,276,769.75	1,054,606.61	2,331,376.36
	Total Prepayment Amount					105,743,858.05	127,271,572.11	233,015,430.16

SPACE INTENTIONALLY LEFT BLANK


Total Prepayments by Groups (in thousands of dollars)					Total Prepayments (in thousands of dollars)


				Page 16 of 29				© COPYRIGHT 2004 Deutsche Bank
	Morgan Stanley ABS Capital I Inc. 2004-HE3
	Mortgage Pass-Through Certificates
	Series 2004-HE3
	Prepayment Report for December 27, 2004 Distribution


	Prepayment Report - Voluntary Prepayments


VOLUNTARY PREPAYMENT RATES						GROUP 2	GROUP 1	TOTAL

	SMM					4.92%	3.94%	4.37%
	3 Months Avg SMM					4.11%	3.88%	3.98%
	12 Months Avg SMM
	Avg SMM Since Cut-off					3.26%	3.07%	3.15%

	CPR					45.43%	38.27%	41.52%
	3 Months Avg CPR					39.55%	37.79%	38.57%
	12 Months Avg CPR
	Avg CPR Since Cut-off					32.78%	31.25%	31.93%

	PSA					2178.94%	1850.66%	2000.74%
	3 Months Avg PSA Approximation					2097.63%	2022.02%	2055.68%
	12 Months Avg PSA Approximation
	Avg PSA Since Cut-off Approximation					2203.83%	2126.49%	2160.97%



	Group 1
	Group 2


CPR by Groups					Total CPR


PSA by Groups					Total PSA


				Page 17 of 29				© COPYRIGHT 2004 Deutsche Bank
	Morgan Stanley ABS Capital I Inc. 2004-HE3
	Mortgage Pass-Through Certificates
	Series 2004-HE3
	Prepayment Report for December 27, 2004 Distribution


	Prepayment Report - Voluntary Prepayments

	Group 1
	Group 2

CPR Avg since Cut-Off by Groups					Total CPR Avg since Cut-Off


PSA Avg since Cut-Off by Groups					Total PSA Avg since Cut-Off


PREPAYMENT CALCULATION METHODOLOGY
Single Monthly Mortality (SMM): (Voluntary partial and full prepayments + Repurchases)/(Beg Principal Balance - Sched Principal)
Conditional Prepayment Rate (CPR): 1-((1-SMM)^12)
PSA Standard Prepayment Model: CPR/(0.02*min(30,WAS))
Average SMM over period between nth month and mth month (AvgSMMn,m): [(1-SMMn) * (1-SMMn+1) .......(1-SMMm)]^(1/months in period n,m)
Average CPR over period between the nth month and mth month (AvgCPRn,m): 1-((1-AvgSMMn,m)^12)
Average PSA Approximation over period between the nth month and mth month: AvgCPRn,m/(0.002*Avg WASn,m))
Average WASn,m: (min(30,WASn)+min(30,WASn+1)+.......+min(30,WASm)/(number of months in the period n,m)
Weighted Average Seasoning (WAS)

Note: Prepayment rates are calculated since deal issue date and include partial and full voluntary prepayments and repurchases.
Dates correspond to distribution dates.

				Page 18 of 29				© COPYRIGHT 2004 Deutsche Bank


	Morgan Stanley ABS Capital I Inc. 2004-HE3
	Mortgage Pass-Through Certificates
	Series 2004-HE3
	Prepayment Detail Report for December 27, 2004 Distribution


	Prepayment Detail Report - Loans Prepaid in Full During Current Distribution


SUMMARY						LOAN GROUP

Total Loan Count = 213						Loan Group 1 = Group 1
Total Original Principal Balance = 42,502,669.00						Loan Group 2 = Group 2
Total Prepayment Amount = 42,136,222.72


Loan Number			Original			Current	State &	Type Prepayment
&		Loan	Principal	Prepayment	Prepayment	Note	LTV at	&	Origination
Loan Group		Status	Balance	Amount	Date	Rate	Origination	Original Term	Date

799827 1			205,000.00	200,655.29	Nov-17-04	6.200%	CA - 54.67%	Paid Off - 360	Jan-30-03
1153923 1			143,600.00	142,821.24	Nov-17-04	9.200%	CA - 74.99%	Paid Off - 360	Dec-16-03
1156128 1			256,000.00	254,102.59	Dec-13-04	7.650%	CA - 80.00%	Paid Off - 360	Jan-29-04
1173630 1			333,162.00	329,910.72	Dec-01-04	5.650%	CA - 80.00%	Paid Off - 360	Jan-20-04
1178119 1			285,000.00	283,129.07	Dec-15-04	8.750%	CA - 63.76%	Paid Off - 360	Dec-03-03
1187085 1			112,000.00	111,334.01	Nov-22-04	8.750%	FL - 70.00%	Paid Off - 360	Dec-15-03
1201687 1			141,100.00	140,340.92	Dec-14-04	9.250%	NJ - 85.00%	Paid Off - 360	Jan-15-04
1215633 1			123,000.00	122,006.06	Nov-24-04	6.650%	DC - 45.56%	Paid Off - 360	Jan-20-04
1229968 1			139,200.00	138,145.33	Nov-24-04	6.990%	CA - 80.00%	Paid Off - 360	Jan-29-04
1240447 1			480,000.00	475,787.92	Nov-16-04	6.250%	CA - 80.00%	Paid Off - 360	Jan-16-04
1245855 1			128,030.00	127,025.03	Dec-01-04	6.800%	VA - 64.05%	Paid Off - 360	Jan-30-04
1252813 1			140,000.00	138,435.67	Nov-17-04	5.500%	FL - 62.78%	Paid Off - 360	Jan-20-04
1258508 1			229,000.00	227,303.87	Dec-07-04	7.100%	NJ - 74.84%	Paid Off - 360	Jan-28-04
1264367 1			230,250.00	228,592.84	Dec-09-04	7.250%	CA - 84.96%	Paid Off - 360	Jan-21-04
1264401 1			191,920.00	189,986.92	Dec-01-04	6.100%	CA - 80.00%	Paid Off - 360	Jan-02-04
1265079 1			76,500.00	75,916.59	Nov-29-04	6.950%	FL - 90.00%	Paid Off - 360	Jan-12-04
1267519 1			104,000.00	102,834.81	Nov-19-04	5.950%	MA - 77.04%	Paid Off - 360	Jan-21-04
1268912 1			152,000.00	150,829.60	Dec-01-04	6.900%	CA - 95.00%	Paid Off - 360	Jan-27-04
1270297 1			148,500.00	147,367.57	Dec-01-04	6.950%	CA - 90.00%	Paid Off - 360	Jan-16-04
1271153 1			115,000.00	114,000.20	Nov-18-04	8.000%	CA - 79.31%	Paid Off - 360	Jan-20-04
1271847 1			128,000.00	126,579.65	Dec-02-04	4.950%	AZ - 72.73%	Paid Off - 360	Jan-28-04
1277003 1			129,500.00	128,176.40	Nov-17-04	5.400%	CO - 70.00%	Paid Off - 360	Jan-30-04
1282356 1			91,000.00	89,555.92	Nov-15-04	7.908%	MS - 65.00%	Paid Off - 240	Jan-26-04
1283028 1			118,750.00	117,892.25	Dec-09-04	7.250%	FL - 89.96%	Paid Off - 360	Jan-28-04
1283750 1			318,750.00	316,223.72	Nov-29-04	6.750%	NY - 85.00%	Paid Off - 360	Jan-05-04
1285223 1			244,000.00	241,618.85	Dec-02-04	5.650%	CA - 80.00%	Paid Off - 360	Jan-22-04
1285793 1			250,000.00	247,921.33	Nov-19-04	6.500%	CA - 50.20%	Paid Off - 360	Jan-28-04
1286183 1			164,000.00	162,808.25	Nov-23-04	7.750%	FL - 80.00%	Paid Off - 360	Jan-12-04
1286206 1			311,000.00	308,020.95	Nov-23-04	5.750%	CA - 78.73%	Paid Off - 360	Jan-27-04
1286740 1			322,000.00	318,941.37	Nov-24-04	7.000%	CA - 83.64%	Paid Off - 360	Jan-12-04
1287024 1			213,600.00	211,142.69	Nov-19-04	4.750%	NV - 80.00%	Paid Off - 360	Jan-14-04
1289454 1			72,150.00	71,724.35	Dec-13-04	8.250%	MN - 65.00%	Paid Off - 360	Jan-27-04
1290970 1			162,500.00	160,845.41	Nov-30-04	6.000%	CA - 67.71%	Paid Off - 360	Jan-06-04
1291836 1			180,000.00	178,385.26	Dec-09-04	6.250%	NY - 75.00%	Paid Off - 360	Jan-20-04
1293061 1			331,000.00	328,020.25	Dec-06-04	6.650%	CA - 79.95%	Paid Off - 360	Jan-02-04
1294570 1			318,000.00	315,190.13	Dec-01-04	6.950%	CA - 54.36%	Paid Off - 360	Jan-06-04
1295631 1			280,000.00	268,472.57	Nov-23-04	7.150%	CA - 80.00%	Paid Off - 180	Jan-09-04
1296080 1			172,000.00	170,798.65	Nov-30-04	7.400%	CA - 80.00%	Paid Off - 360	Jan-15-04
1297400 1			272,000.00	269,490.18	Nov-22-04	5.950%	CA - 74.52%	Paid Off - 360	Jan-15-04
1298547 1			171,500.00	169,914.45	Nov-23-04	6.125%	OR - 70.00%	Paid Off - 360	Jan-13-04
1298780 1			157,250.00	156,318.55	Dec-10-04	8.230%	FL - 83.64%	Paid Off - 360	Jan-30-04
1302131 1			281,250.00	279,173.45	Nov-23-04	7.250%	CA - 89.29%	Paid Off - 360	Jan-29-04
1303860 1			142,400.00	141,254.49	Dec-02-04	6.900%	CO - 80.00%	Paid Off - 360	Jan-20-04
1304590 1			184,500.00	183,331.41	Dec-02-04	7.900%	CA - 90.00%	Paid Off - 360	Jan-13-04

					Page 19 of 29				© COPYRIGHT 2004 Deutsche Bank
	Morgan Stanley ABS Capital I Inc. 2004-HE3
	Mortgage Pass-Through Certificates
	Series 2004-HE3
	Prepayment Detail Report for December 27, 2004 Distribution


	Prepayment Detail Report - Loans Prepaid in Full During Current Distribution



Loan Number			Original			Current	State &
&		Loan	Principal	Prepayment	Prepayment	Note	LTV at	Original	Origination
Loan Group		Status	Balance	Amount	Date	Rate	Origination	Term	Date

1304805 1			228,000.00	226,382.28	Dec-03-04	7.350%	CA - 95.00%	Paid Off - 360	Jan-16-04
1307816 1			140,000.00	138,997.01	Dec-01-04	7.400%	MD - 60.87%	Paid Off - 360	Jan-30-04
1308712 1			184,360.00	182,846.03	Dec-02-04	6.650%	CA - 80.00%	Paid Off - 360	Jan-23-04
1310972 1			204,000.00	202,204.25	Nov-26-04	6.200%	CA - 80.00%	Paid Off - 360	Jan-28-04
1312978 1			280,500.00	278,442.56	Nov-12-04	7.150%	CA - 85.00%	Paid Off - 360	Jan-30-04
1313424 1			135,000.00	133,418.85	Dec-14-04	7.000%	CA - 90.00%	Paid Off - 360	Jan-30-04
1315564 1			85,000.00	84,523.18	Dec-14-04	8.500%	MI - 23.29%	Paid Off - 360	Jan-27-04
1315655 1			90,950.00	90,242.92	Nov-18-04	6.850%	FL - 85.00%	Paid Off - 360	Jan-27-04
1317063 1			212,500.00	210,707.59	Dec-10-04	6.425%	CA - 85.00%	Paid Off - 360	Jan-28-04
1317865 1			262,500.00	260,211.08	Dec-07-04	6.250%	CA - 80.77%	Paid Off - 360	Jan-30-04
1320583 1			153,000.00	151,775.63	Dec-06-04	6.700%	IL - 85.00%	Paid Off - 360	Jan-26-04
1322548 1			113,750.00	112,681.23	Nov-26-04	6.250%	CA - 65.00%	Paid Off - 360	Jan-23-04
1326191 1			150,100.00	148,182.59	Dec-09-04	6.600%	CT - 73.58%	Paid Off - 300	Jan-30-04
1326533 1			245,000.00	242,890.88	Dec-08-04	6.500%	NJ - 68.06%	Paid Off - 360	Jan-30-04
1327134 1			259,250.00	257,795.77	Dec-13-04	8.500%	CA - 85.00%	Paid Off - 360	Jan-26-04
1328309 1			237,000.00	235,735.34	Dec-03-04	8.750%	CT - 90.00%	Paid Off - 360	Jan-29-04
1331312 1			215,000.00	212,995.94	Nov-29-04	5.900%	CA - 75.44%	Paid Off - 360	Jan-26-04
1333881 1			197,200.00	195,832.76	Nov-16-04	7.850%	CA - 85.00%	Paid Off - 360	Jan-30-04
7075316 1			53,200.00	52,920.99	Dec-01-04	8.900%	IL - 95.00%	Paid Off - 360	Jan-20-04
7194293 1			310,250.00	307,438.09	Dec-03-04	7.250%	CA - 85.00%	Paid Off - 360	Jan-12-04
7399650 1			207,000.00	205,123.22	Dec-10-04	6.990%	CA - 90.00%	Paid Off - 360	Dec-29-03
7421575 1			45,000.00	44,677.76	Nov-26-04	7.825%	WI - 69.77%	Paid Off - 360	Jan-07-04
7442386 1			337,250.00	334,921.32	Dec-09-04	8.500%	NY - 95.00%	Paid Off - 360	Dec-05-03
7470444 1			187,000.00	186,018.69	Dec-07-04	8.875%	NY - 85.00%	Paid Off - 360	Jan-30-04
7490631 1			264,000.00	262,348.65	Nov-23-04	8.500%	CA - 80.00%	Paid Off - 360	Jan-16-04
7507194 1			81,750.00	81,331.58	Dec-03-04	8.950%	FL - 75.00%	Paid Off - 360	Jan-22-04
7513550 1			129,600.00	128,778.93	Dec-09-04	8.437%	MN - 78.55%	Paid Off - 360	Jan-08-04
7518625 1			214,000.00	211,871.59	Dec-04-04	6.125%	GA - 63.88%	Paid Off - 360	Dec-30-03
7536348 1			179,200.00	178,142.82	Nov-23-04	8.250%	VA - 80.00%	Paid Off - 360	Feb-02-04
7550944 1			46,800.00	46,556.43	Dec-06-04	9.400%	NC - 90.00%	Paid Off - 360	Dec-05-03
7563523 1			98,679.00	97,021.74	Dec-13-04	8.350%	KY - 89.16%	Paid Off - 360	Jan-26-04
7579098 1			260,000.00	257,935.49	Dec-07-04	7.375%	CA - 89.66%	Paid Off - 360	Jan-09-04
7588933 1			262,000.00	259,526.23	Nov-22-04	6.400%	NY - 79.39%	Paid Off - 360	Dec-29-03
7596081 1			78,000.00	77,404.54	Dec-15-04	7.500%	IL - 88.64%	Paid Off - 360	Jan-09-04
7843151 1			143,200.00	142,189.91	Dec-01-04	7.350%	VA - 80.00%	Paid Off - 360	Jan-26-04
8162115 1			112,400.00	111,716.03	Nov-17-04	8.100%	AZ - 89.99%	Paid Off - 360	Jan-28-04
8222266 1			66,400.00	66,071.92	Dec-13-04	9.525%	MO - 80.00%	Paid Off - 360	Jan-26-04
8305307 1			234,000.00	231,913.61	Dec-14-04	6.700%	VA - 88.47%	Paid Off - 360	Jan-06-04
8574863 1			42,500.00	42,273.39	Dec-09-04	8.750%	CO - 50.00%	Paid Off - 360	Jan-27-04
8579288 1			216,000.00	214,126.19	Nov-12-04	6.480%	FL - 80.00%	Paid Off - 360	Jan-13-04
8588872 1			148,000.00	146,867.09	Dec-15-04	6.930%	MN - 80.00%	Paid Off - 360	Jan-21-04
8593752 1			170,000.00	168,898.37	Dec-06-04	7.780%	FL - 77.27%	Paid Off - 360	Jan-22-04
8621098 1			152,800.00	151,462.57	Nov-17-04	6.230%	WA - 80.00%	Paid Off - 360	Jan-28-04
8621284 1			250,000.00	248,277.68	Nov-18-04	7.480%	NY - 71.43%	Paid Off - 360	Jan-22-04
8635633 1			192,000.00	190,466.53	Nov-19-04	6.710%	CA - 80.00%	Paid Off - 360	Jan-12-04
8646295 1			204,000.00	202,214.45	Nov-18-04	6.230%	CA - 80.00%	Paid Off - 360	Jan-12-04
8661863 1			179,999.00	177,792.55	Dec-07-04	6.880%	NV - 80.00%	Paid Off - 360	Jan-15-04
8666989 1			205,000.00	203,406.21	Dec-07-04	6.850%	MO - 73.74%	Paid Off - 360	Jan-22-04
8670013 1			274,500.00	272,046.94	Nov-19-04	6.130%	CA - 90.00%	Paid Off - 360	Jan-15-04
8687439 1			212,000.00	210,344.59	Nov-23-04	6.990%	CA - 80.00%	Paid Off - 360	Jan-16-04
8727767 1			166,200.00	164,852.02	Nov-24-04	6.630%	CT - 79.90%	Paid Off - 360	Jan-27-04
8738556 1			285,000.00	283,182.87	Dec-02-04	7.990%	MA - 95.00%	Paid Off - 360	Jan-22-04

					Page 20 of 29				© COPYRIGHT 2004 Deutsche Bank
	Morgan Stanley ABS Capital I Inc. 2004-HE3
	Mortgage Pass-Through Certificates
	Series 2004-HE3
	Prepayment Detail Report for December 27, 2004 Distribution


	Prepayment Detail Report - Loans Prepaid in Full During Current Distribution



Loan Number			Original			Current	State &
&		Loan	Principal	Prepayment	Prepayment	Note	LTV at	Original	Origination
Loan Group		Status	Balance	Amount	Date	Rate	Origination	Term	Date

8763933 1			108,900.00	108,031.04	Dec-02-04	7.380%	WA - 90.00%	Paid Off - 360	Jan-20-04
8769346 1			94,560.00	93,791.51	Nov-16-04	6.830%	MN - 80.00%	Paid Off - 360	Jan-22-04
8809208 1			127,000.00	125,910.17	Dec-09-04	7.080%	CA - 83.28%	Paid Off - 360	Jan-21-04
8815259 1			260,000.00	257,838.16	Dec-10-04	6.500%	CA - 64.20%	Paid Off - 360	Feb-02-04
311110906 1			239,000.00	236,776.75	Nov-04-04	6.990%	VA - 100.00%	Paid Off - 360	Nov-25-03
311110958 1			110,320.00	109,518.30	Nov-23-04	7.750%	CT - 80.00%	Paid Off - 360	Dec-04-03
311145655 1			66,700.00	65,184.55	Nov-17-04	9.000%	PA - 78.47%	Paid Off - 360	Dec-30-03
311145749 1			224,000.00	222,412.07	Nov-03-04	7.875%	CA - 80.00%	Paid Off - 360	Dec-12-03
311189248 1			300,000.00	297,346.47	Nov-01-04	7.250%	CA - 80.00%	Paid Off - 360	Dec-10-03
311244195 1			118,400.00	117,794.25	Nov-02-04	9.490%	MI - 80.00%	Paid Off - 360	Dec-16-03
311286786 1			98,320.00	97,605.50	Dec-01-04	7.750%	FL - 80.00%	Paid Off - 360	Dec-08-03
311286908 1			206,380.00	204,640.50	Nov-18-04	6.990%	CA - 85.00%	Paid Off - 360	Dec-16-03
312017948 1			75,000.00	74,720.62	Nov-18-04	10.990%	CA - 42.86%	Paid Off - 360	Dec-22-03
312040918 1			102,000.00	101,287.63	Nov-23-04	7.950%	VA - 80.00%	Paid Off - 360	Dec-17-03
312052292 1			250,000.00	247,682.19	Nov-23-04	6.990%	CA - 76.92%	Paid Off - 360	Dec-18-03
312106401 1			232,000.00	230,314.12	Nov-29-04	7.750%	CA - 80.00%	Paid Off - 360	Dec-29-03
312117126 1			187,000.00	184,692.72	Nov-22-04	6.990%	CA - 83.11%	Paid Off - 360	Dec-30-03
312127876 1			204,000.00	202,784.78	Nov-24-04	8.750%	CA - 80.00%	Paid Off - 360	Dec-31-03
312128016 1			205,000.00	203,510.30	Nov-29-04	7.750%	NY - 67.21%	Paid Off - 360	Dec-29-03
312160651 1			120,000.00	118,904.07	Nov-08-04	7.250%	CA - 60.00%	Paid Off - 360	Dec-31-03
999466 2			302,000.00	298,914.94	Nov-22-04	7.400%	RI - 81.62%	Paid Off - 360	Sep-09-03
1027223 2			131,500.00	130,039.42	Nov-26-04	7.000%	KS - 52.60%	Paid Off - 360	Sep-25-03
1082389 2			156,000.00	151,596.75	Nov-22-04	7.350%	IL - 58.87%	Paid Off - 180	Jan-29-04
1104665 2			425,600.00	422,686.74	Nov-30-04	7.850%	CA - 95.00%	Paid Off - 360	Jan-27-04
1144000 2			382,200.00	381,997.26	Nov-30-04	5.125%	MI - 84.75%	Paid Off - 300	Jan-22-04
1235997 2			224,000.00	222,435.35	Nov-26-04	7.400%	CA - 80.00%	Paid Off - 360	Jan-29-04
1238319 2			414,000.00	410,148.92	Nov-30-04	6.850%	CA - 90.00%	Paid Off - 360	Jan-16-04
1250513 2			128,000.00	126,925.55	Dec-03-04	6.450%	CA - 69.95%	Paid Off - 360	Jan-23-04
1251571 2			122,400.00	121,313.45	Nov-30-04	6.350%	CA - 80.00%	Paid Off - 360	Jan-22-04
1256785 2			52,000.00	51,336.76	Nov-30-04	10.550%	CA - 20.00%	Paid Off - 240	Jan-09-04
1263500 2			38,288.00	37,727.93	Nov-24-04	9.780%	MN - 20.00%	Paid Off - 240	Jan-02-04
1263860 2			207,400.00	205,592.65	Nov-26-04	6.750%	CA - 85.00%	Paid Off - 360	Jan-14-04
1265769 2			365,000.00	361,682.60	Nov-24-04	6.600%	MT - 79.35%	Paid Off - 360	Dec-23-03
1268941 2			195,000.00	193,250.78	Nov-18-04	6.100%	FL - 78.00%	Paid Off - 360	Jan-16-04
1268959 2			41,000.00	40,345.08	Dec-08-04	8.750%	CA - 20.00%	Paid Off - 240	Jan-08-04
1274057 2			112,500.00	111,536.77	Nov-15-04	6.550%	PA - 54.88%	Paid Off - 360	Jan-30-04
1278257 2			165,300.00	164,133.96	Nov-22-04	7.350%	VA - 95.00%	Paid Off - 360	Jan-12-04
1281212 2			150,000.00	148,788.10	Dec-13-04	6.650%	CA - 60.00%	Paid Off - 360	Jan-27-04
1282768 2			65,600.00	65,216.01	Dec-03-04	8.300%	LA - 80.00%	Paid Off - 360	Jan-14-04
1284374 2			72,000.00	70,918.72	Dec-15-04	9.250%	CA - 20.00%	Paid Off - 240	Jan-05-04
1284652 2			27,180.00	26,811.77	Dec-09-04	9.500%	CO - 20.00%	Paid Off - 240	Jan-15-04
1285828 2			36,400.00	35,869.68	Dec-06-04	9.600%	CA - 20.00%	Paid Off - 240	Jan-12-04
1286885 2			313,000.00	310,133.44	Dec-01-04	5.990%	ME - 70.34%	Paid Off - 360	Jan-28-04
1286912 2			50,200.00	49,943.01	Nov-22-04	8.950%	UT - 20.00%	Paid Off - 360	Jan-15-04
1287109 2			53,400.00	52,635.16	Nov-19-04	8.750%	NV - 20.00%	Paid Off - 240	Jan-14-04
1293249 2			143,000.00	142,067.82	Dec-13-04	7.750%	CA - 89.94%	Paid Off - 360	Jan-27-04
1293449 2			93,600.00	92,893.09	Dec-08-04	7.000%	CA - 86.67%	Paid Off - 360	Jan-13-04
1294561 2			183,200.00	181,719.87	Nov-24-04	6.650%	CA - 80.00%	Paid Off - 360	Jan-15-04
1296000 2			72,000.00	71,024.56	Dec-01-04	9.200%	CA - 20.00%	Paid Off - 240	Jan-12-04
1296743 2			156,000.00	155,111.33	Dec-08-04	8.800%	MI - 75.00%	Paid Off - 360	Jan-28-04
1299219 2			345,000.00	341,741.21	Nov-23-04	5.825%	CA - 76.67%	Paid Off - 360	Jan-13-04
1306194 2			234,000.00	230,699.17	Nov-30-04	7.700%	TN - 90.00%	Paid Off - 360	Jan-29-04

					Page 21 of 29				© COPYRIGHT 2004 Deutsche Bank
	Morgan Stanley ABS Capital I Inc. 2004-HE3
	Mortgage Pass-Through Certificates
	Series 2004-HE3
	Prepayment Detail Report for December 27, 2004 Distribution


	Prepayment Detail Report - Loans Prepaid in Full During Current Distribution



Loan Number			Original			Current	State &
&		Loan	Principal	Prepayment	Prepayment	Note	LTV at	Original	Origination
Loan Group		Status	Balance	Amount	Date	Rate	Origination	Term	Date

1306970 2			119,000.00	118,384.58	Nov-30-04	9.150%	CA - 85.00%	Paid Off - 360	Jan-27-04
1307219 2			477,000.00	473,219.49	Nov-22-04	6.750%	CA - 90.00%	Paid Off - 360	Jan-15-04
1307474 2			297,000.00	294,800.25	Dec-03-04	7.100%	CA - 90.00%	Paid Off - 360	Jan-29-04
1310841 2			359,920.00	356,927.27	Nov-16-04	6.500%	CA - 80.00%	Paid Off - 360	Jan-15-04
1313296 2			140,800.00	139,548.77	Nov-26-04	6.150%	CA - 80.00%	Paid Off - 360	Jan-29-04
1316815 2			138,400.00	136,945.92	Dec-03-04	8.000%	CA - 80.00%	Paid Off - 360	Jan-30-04
1316927 2			372,000.00	368,994.51	Dec-07-04	6.650%	CA - 80.00%	Paid Off - 360	Jan-22-04
1317884 2			498,750.00	495,127.28	Dec-07-04	7.200%	CA - 95.00%	Paid Off - 360	Jan-22-04
1321732 2			530,550.00	526,465.01	Nov-23-04	6.900%	CA - 90.00%	Paid Off - 360	Jan-23-04
1327080 2			100,000.00	97,950.09	Nov-26-04	5.730%	CA - 54.05%	Paid Off - 240	Jan-28-04
1327399 2			63,960.00	62,616.99	Nov-29-04	5.519%	FL - 52.00%	Paid Off - 240	Jan-26-04
1329315 2			308,000.00	305,673.99	Dec-06-04	7.000%	TX - 79.79%	Paid Off - 360	Jan-30-04
1330281 2			365,750.00	362,982.56	Nov-29-04	6.990%	CO - 95.00%	Paid Off - 360	Jan-30-04
1333965 2			500,000.00	496,836.32	Dec-14-04	7.900%	HI - 86.81%	Paid Off - 360	Jan-30-04
1334167 2			500,000.00	495,514.83	Dec-10-04	6.100%	CA - 76.92%	Paid Off - 360	Jan-30-04
7511035 2			296,000.00	292,980.42	Nov-23-04	5.990%	CA - 77.89%	Paid Off - 360	Jan-06-04
7553099 2			120,650.00	119,720.99	Dec-02-04	6.900%	AZ - 95.00%	Paid Off - 360	Jan-12-04
7578008 2			54,600.00	54,403.67	Nov-19-04	10.650%	OH - 70.00%	Paid Off - 360	Jan-14-04
7593554 2			143,500.00	142,457.17	Dec-01-04	7.750%	NY - 65.23%	Paid Off - 360	Jan-06-04
8048789 2			164,532.00	163,536.00	Nov-18-04	8.130%	CA - 80.00%	Paid Off - 360	Jan-30-04
8136416 2			340,000.00	337,837.95	Nov-19-04	7.875%	FL - 67.33%	Paid Off - 360	Jan-15-04
8428891 2			400,000.00	396,294.45	Dec-02-04	6.500%	CA - 75.47%	Paid Off - 360	Jan-15-04
8572755 2			124,000.00	122,925.73	Nov-29-04	6.850%	NV - 80.00%	Paid Off - 360	Jan-06-04
8573549 2			128,000.00	127,233.43	Dec-03-04	8.175%	CA - 80.00%	Paid Off - 360	Jan-30-04
8575258 2			75,001.00	74,461.50	Nov-17-04	7.250%	NY - 22.73%	Paid Off - 360	Jan-14-04
8576254 2			270,000.00	268,307.15	Dec-03-04	8.490%	MD - 90.00%	Paid Off - 360	Jan-13-04
8586500 2			142,000.00	141,043.97	Nov-22-04	7.590%	CA - 71.00%	Paid Off - 360	Jan-26-04
8606102 2			105,000.00	104,342.19	Dec-14-04	7.950%	OH - 64.02%	Paid Off - 360	Jan-07-04
8616353 2			384,000.00	380,608.85	Nov-24-04	6.750%	CA - 80.00%	Paid Off - 360	Jan-12-04
8620601 2			292,000.00	286,700.61	Dec-15-04	6.000%	CA - 80.00%	Paid Off - 360	Jan-09-04
8626235 2			106,000.00	105,579.31	Nov-26-04	10.175%	VA - 80.00%	Paid Off - 360	Jan-26-04
8636575 2			195,500.00	194,520.57	Nov-18-04	9.055%	NV - 85.00%	Paid Off - 360	Feb-03-04
8640351 2			384,000.00	380,867.21	Dec-01-04	7.160%	OH - 80.00%	Paid Off - 360	Jan-05-04
8656118 2			97,500.00	96,858.63	Dec-02-04	8.250%	FL - 75.00%	Paid Off - 360	Jan-09-04
8667136 2		FCL	50,600.00	50,432.56	Nov-18-04	11.030%	FL - 46.42%	Paid Off - 360	Jan-23-04
8668701 2			345,600.00	343,015.24	Dec-09-04	7.050%	MA - 80.00%	Paid Off - 360	Jan-29-04
8679142 2			180,765.00	179,459.63	Nov-16-04	7.230%	MN - 90.00%	Paid Off - 360	Jan-20-04
8685150 2			132,000.00	131,065.25	Nov-22-04	7.330%	CA - 62.86%	Paid Off - 360	Jan-14-04
8699178 2			157,500.00	156,448.58	Nov-17-04	7.630%	FL - 90.00%	Paid Off - 360	Jan-16-04
8714819 2			214,400.00	212,857.37	Dec-09-04	7.250%	CA - 80.00%	Paid Off - 360	Jan-14-04
8738203 2			236,000.00	233,834.28	Nov-24-04	5.980%	WA - 80.00%	Paid Off - 360	Jan-14-04
8740003 2			340,200.00	337,233.58	Dec-03-04	6.250%	MD - 80.00%	Paid Off - 360	Jan-20-04
8746028 2			135,000.00	134,034.60	Nov-30-04	7.280%	MN - 90.00%	Paid Off - 360	Jan-20-04
8749280 2			180,000.00	178,637.49	Dec-06-04	6.990%	CA - 80.00%	Paid Off - 360	Jan-15-04
8797447 2			310,000.00	308,216.60	Dec-10-04	8.375%	CA - 80.00%	Paid Off - 360	Jan-23-04
8830185 2			375,000.00	372,027.89	Dec-09-04	6.750%	CA - 86.21%	Paid Off - 360	Jan-28-04
8837570 2			100,000.00	99,233.23	Dec-09-04	7.990%	CA - 64.52%	Paid Off - 360	Jan-29-04
8846758 2			288,000.00	285,488.71	Dec-09-04	6.250%	CA - 74.32%	Paid Off - 360	Jan-30-04
8853355 2			500,000.00	496,473.24	Dec-09-04	7.350%	CA - 89.29%	Paid Off - 360	Jan-27-04
8856966 2			225,000.00	223,758.18	Dec-01-04	8.580%	CA - 57.69%	Paid Off - 360	Feb-03-04
310025377 2			480,000.00	474,070.77	Nov-30-04	6.500%	CA - 80.00%	Paid Off - 360	Nov-25-03
310211271 2			358,700.00	356,451.77	Nov-22-04	8.490%	CA - 85.00%	Paid Off - 360	Dec-31-03

					Page 22 of 29				© COPYRIGHT 2004 Deutsche Bank
	Morgan Stanley ABS Capital I Inc. 2004-HE3
	Mortgage Pass-Through Certificates
	Series 2004-HE3
	Prepayment Detail Report for December 27, 2004 Distribution


	Prepayment Detail Report - Loans Prepaid in Full During Current Distribution



Loan Number			Original			Current	State &
&		Loan	Principal	Prepayment	Prepayment	Note	LTV at	Original	Origination
Loan Group		Status	Balance	Amount	Date	Rate	Origination	Term	Date

310301891 2			72,500.00	71,888.68	Nov-22-04	6.990%	TN - 77.96%	Paid Off - 360	Dec-23-03
311044298 2			125,100.00	123,717.53	Nov-30-04	7.375%	CA - 90.00%	Paid Off - 360	Dec-02-03
311056079 2			263,500.00	261,416.54	Nov-30-04	8.250%	CA - 85.00%	Paid Off - 360	Dec-04-03
311123508 2			166,500.00	164,203.68	Nov-24-04	7.750%	CA - 90.00%	Paid Off - 360	Dec-18-03
311189318 2			188,792.00	187,240.23	Nov-22-04	7.625%	CA - 80.00%	Paid Off - 360	Dec-02-03
311255142 2			238,091.00	235,885.36	Nov-30-04	6.500%	CA - 80.00%	Paid Off - 360	Dec-23-03
312017765 2			130,000.00	128,992.35	Nov-01-04	7.450%	CA - 61.90%	Paid Off - 360	Dec-17-03
312028471 2			234,000.00	231,656.72	Nov-12-04	7.500%	NY - 65.00%	Paid Off - 360	Dec-15-03
312051922 2			86,500.00	85,860.00	Nov-23-04	7.659%	IN - 100.00%	Paid Off - 360	Dec-11-03
312095092 2			311,560.00	309,062.35	Nov-05-04	7.250%	AZ - 80.00%	Paid Off - 360	Dec-29-03
312116609 2			251,750.00	249,472.79	Nov-08-04	6.625%	CA - 95.00%	Paid Off - 360	Dec-24-03
312158604 2			123,200.00	122,226.24	Nov-24-04	7.900%	VA - 80.00%	Paid Off - 360	Dec-24-03
312158859 2			174,400.00	172,896.41	Nov-05-04	6.875%	CA - 80.00%	Paid Off - 360	Dec-31-03


					Page 23 of 29				© COPYRIGHT 2004 Deutsche Bank
	Morgan Stanley ABS Capital I Inc. 2004-HE3
	Mortgage Pass-Through Certificates
	Series 2004-HE3
	Realized Loss Report for December 27, 2004 Distribution


	Realized Loss Report - Collateral


COLLATERAL REALIZED LOSSES						GROUP 2	GROUP 1	TOTAL

	*Current*
	Number of Loans Liquidated					1	-	1
	Collateral Realized Loss/(Gain) Amount					7.75	-	7.75
	Net Liquidation Proceeds					99,297.24	-	99,297.24

	*Cumulative*
	Number of Loans Liquidated					1	-	1
	Collateral Realized Loss/(Gain) Amount					15.50	-	15.50
	Net Liquidation Proceeds					99,289.49	-	99,289.49

	Note: Collateral Realized Loss Amount may include adjustments to loans liquidated in prior periods.


	Applied Realized Loss Amount Current							0.00
	Applied Realized Loss Amount Aggregate							0.00
	Cumulative Loss Percentage							0.00%


	Group 1						3 Months Moving Average
	Group 2

Collateral Loss Severity Approximation by Groups					Collateral Loss Severity Approximation


				Page 24 of 29				© COPYRIGHT 2004 Deutsche Bank
	Morgan Stanley ABS Capital I Inc. 2004-HE3
	Mortgage Pass-Through Certificates
	Series 2004-HE3
	Realized Loss Report for December 27, 2004 Distribution


	Realized Loss Report - Collateral


DEFAULT SPEEDS						GROUP 2	GROUP 1	TOTAL

	MDR					0.02%	0.00%	0.01%
	3 Months Avg MDR					0.01%	0.00%	0.00%
	12 Months Avg MDR
	Avg MDR Since Cut-off					0.00%	0.00%	0.00%

	CDR					0.28%	0.00%	0.12%
	3 Months Avg CDR					0.09%	0.00%	0.04%
	12 Months Avg CDR
	Avg CDR Since Cut-off					0.04%	0.00%	0.02%

	SDA					1.34%	0.00%	0.59%
	3 Months Avg SDA Approximation					0.49%	0.00%	0.22%
	12 Months Avg SDA Approximation
	Avg SDA Since Cut-off Approximation					0.27%	0.00%	0.12%

	Loss Severity Approximation for Current Period
	3 Months Avg Loss Severity Approximation
	12 Months Avg Loss Severity Approximation
	Avg Loss Severity Approximation Since Cut-off

	Group 1
	Group 2
CDR by Groups					Total CDR


SDA by Groups					Total SDA


				Page 25 of 29				© COPYRIGHT 2004 Deutsche Bank
	Morgan Stanley ABS Capital I Inc. 2004-HE3
	Mortgage Pass-Through Certificates
	Series 2004-HE3
	Realized Loss Report for December 27, 2004 Distribution


	Realized Loss Report - Collateral

	Group 1
	Group 2

CDR Avg since Cut-Off by Groups					Total CDR Avg since Cut-Off


SDA Avg since Cut-Off by Groups					Total SDA Avg since Cut-Off


COLLATERAL REALIZED LOSS CALCULATION METHODOLOGY
Monthly Default Rate (MDR): (Beg Principal Balance of Liquidated Loans)/(Total Beg Principal Balance)
Conditional Default Rate (CDR): 1-((1-MDR)^12)
SDA Standard Default Assumption: CDR/IF(WAS<61,MIN(30,WAS)0.02,MAX(0.03,MIN(30,WAS)0.02-0.0095*(WAS-60)))
Average MDR over period between nth month and mth month (AvgMDRn,m): [(1-MDRn) * (1-MDRn+1) .......(1-MDRm)]^(1/months in period n,m)
Average CDR over period between the nth month and mth month (AvgCDRn,m): 1-((1-AvgMDRn,m)^12)
Average SDA Approximation over period between the nth month and mth month:
AvgCDRn,m/IF(Avg WASn,m<61,MIN(30,Avg WASn,m)0.02,MAX(0.03,MIN(30,Avg WASn,m)0.02-0.0095*(Avg WASn,m-60)))
Average WASn,m: (WASn + WASn+1 +.......+ WASm )/(number of months in the period n,m)
Loss Severity Approximation for current period: sum(Realized Loss Amount)/sum(Beg Principal Balance of Liquidated Loans)
Average Loss Severity Approximation over period between nth month and mth month: Avg(Loss Severityn,m)
Note: Default rates are calculated since deal issue date and include realized gains and additional realized losses and gains from prior periods.
Dates correspond to distribution dates.

				Page 26 of 29				© COPYRIGHT 2004 Deutsche Bank


	Morgan Stanley ABS Capital I Inc. 2004-HE3
	Mortgage Pass-Through Certificates
	Series 2004-HE3
	Realized Loss Detail Report for December 27, 2004 Distribution


	Realized Loss Detail Report - Loans Liquidated During Current Distribution

SUMMARY							LOAN GROUP
Total Loan Count Current Losses = 1
Total Loan Count Revisions = 0						Loan Group 1 = Group 1
Total Prior Principal Balance = 99,304.99						Loan Group 2 = Group 2
Total Current Realized Loss Amount = 7.75
Total Revisions Amount = 0.00
Total Realized Loss Amount = 7.75
Total Net Liquidation Proceeds = 99,297.24
Note: Total Realized Loss Amount may include adjustments to loans liquidated in prior periods.

Loan Number			Current	State &		Prior	Realized		Cumulative
&		Loan	Note	LTV at	Original	Principal	Loss/(Gain)	Realized	Realized
Loan Group		Status	Rate	Origination	Term	Balance	Revisions	Loss/(Gain)	Loss/(Gain)

312041598 2			7.975%	CA - 80.00%	360	99,304.99		7.75	7.75


					Page 27 of 29				© COPYRIGHT 2004 Deutsche Bank
	Morgan Stanley ABS Capital I Inc. 2004-HE3
	Mortgage Pass-Through Certificates
	Series 2004-HE3
	Triggers, Adj. Rate Cert. and Miscellaneous Report for December 27, 2004 Distribution


	Triggers, Adj. Rate Cert. and Miscellaneous Report


TRIGGER EVENTS						GROUP 2	GROUP 1	TOTAL

	Has a Stepdown Date occurred?							No
	Has Optional Termination date occurred?							No
	Has Cumulative Loss Trigger Event occurred?							Yes
	Has Delinquency Trigger Event occurred?							No

	Cumulative Loss Trigger Event calculation

	If Cumulative Loss Percentage > Applicable Percentage
	Cumulative Loss Percentage							0.00%
	Applicable percentage							0.00%

	Delinquency Trigger Event calculation

	The event will happen if (a) equals or exceeds (b)
	(a) The percentage obtained by dividing (x) by (y)							0.95%
	(x) Three months rolling average of 60+ Day Delinquency							8,819,594.30
	(y) Ending pool balance							924,189,469.33
	(b) 45% of prior period Senior Enhancement Percentage							6.59%



ADJUSTABLE RATE CERTIFICATE INFORMATION						GROUP 2	GROUP 1	TOTAL
SPACE INTENTIONALLY LEFT BLANK


ADDITIONAL INFORMATION						GROUP 2	GROUP 1	TOTAL

	Basis Risk Carry Forward Amount							0.00


				Page 28 of 29				© COPYRIGHT 2004 Deutsche Bank
	Morgan Stanley ABS Capital I Inc. 2004-HE3
	Mortgage Pass-Through Certificates
	Series 2004-HE3
	Other Related Information for December 27, 2004 Distribution


	Other Related Information


ADDITIONAL INFORMATION						GROUP 2	GROUP 1	TOTAL

	Twelve months Scheduled Payments

	Current month Scheduled Payments							6,597,003.55
	1 month prior Scheduled Payments							0.00
	2 months prior Scheduled Payments							0.00
	3 months prior Scheduled Payments							0.00
	4 months prior Scheduled Payments							0.00
	5 months prior Scheduled Payments							0.00
	6 months prior Scheduled Payments							0.00
	7 months prior Scheduled Payments							0.00
	8 months prior Scheduled Payments							0.00
	9 months prior Scheduled Payments							0.00
	10 months prior Scheduled Payments							0.00
	11 months prior Scheduled Payments							0.00
	12 months prior Scheduled Payments							0.00

	Twelve months 60+ days delinquencies

	Current month 60+ days delinquent							1,770,239.67
	1 month prior 60+ days delinquent							0.00
	2 months prior 60+ days delinquent							0.00
	3 months prior 60+ days delinquent							0.00
	4 months prior 60+ days delinquent							0.00
	5 months prior 60+ days delinquent							0.00
	6 months prior 60+ days delinquent							0.00
	7 months prior 60+ days delinquent							0.00
	8 months prior 60+ days delinquent							0.00
	9 months prior 60+ days delinquent							0.00
	10 months prior 60+ days delinquent							0.00
	11 months prior 60+ days delinquent							0.00
	12 months prior 60+ days delinquent							0.00


				Page 29 of 29				© COPYRIGHT 2004 Deutsche Bank

Morgan Stanley ABS Capital I Inc. Trust 2004-HE3 8-K