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EXHIBIT 10.32(c)

THIRD AMENDMENT TO MASTER REPURCHASE AGREEMENT
GOVERNING PURCHASES AND SALES OF MORTGAGE LOANS

        This Amendment, dated as of July 31, 2002 (the "Amendment"), to the
Master Repurchase Agreement Governing Purchases and Sales of Mortgage Loans,
dated as of December 1, 2000, as amended by each of the First Amendment and the
Second Amendment to the Master Repurchase Agreement Governing Purchases and
Sales of Mortgage Loans, dated as of June 21, 2001 (as amended, the
"Agreement"), is made by and between LEHMAN BROTHERS BANK, FSB ("Buyer") and
AAMES CAPITAL CORPORATION ("Seller" and, together with the Buyer, the
"Parties").

RECITALS

        WHEREAS, the Seller and the Buyer are parties to the Agreement, pursuant
to which the Buyer has agreed, subject to the terms and conditions set forth in
the Agreement, to purchase certain Mortgage Loans owned by the Seller,
including, without limitation, all rights of Seller to service and administer
such Mortgage Loans. Terms used but not defined herein shall have the respective
meanings ascribed to such terms in the Agreement, as amended hereby.

        WHEREAS, the Parties wish to amend the Agreement to modify certain of
the terms and conditions governing the purchase and sale of the Mortgage Loans.

        NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto agree as
follows:

        Section 1.    Amendment.    

        1.1  In connection with the Agreement, the Parties agree that the
Agreement shall not terminate on July 31, 2002 and shall be extended until
July 30, 2003 as provided below; provided that all provisions hereof (other than
such extension of the term) shall not be effective until on and after July 2,
2002.

        1.2  The definitions of "Final Repurchase Date", "Pricing Spread" and
"Purchase Price" in Section 2 of the Agreement are hereby deleted in their
entirety and replaced with the following:

"Final Repurchase Date" means July 30, 2003 or such earlier date on which all
Purchased Mortgage Loans are required to be immediately repurchased pursuant to
Section 14(a).

"Pricing Spread" means the rate specified in the Confirmation, which shall be
equal to (i) on each date prior to the delivery to the Custodian of the complete
Mortgage Files with respect to the related Purchased Mortgage Loans, 1.50% and
(ii) on each date on and after the delivery to the Custodian of such Mortgage
Files, 1.00%.

"Purchase Price" means on each Purchase Date, the price at which Purchased
Mortgage Loans are transferred by Seller to Buyer or its designee (including the
Custodian) which shall be equal to, with respect to each Purchased Mortgage Loan
that is not a Wet Ink Mortgage Loan, the lowest of (x) 95.5% of the Market Value
of such Purchased Mortgage Loan as determined by the Buyer in its sole
discretion, (y) 97.0% of the Securitization Value of such Purchased Mortgage
Loan as determined by the Buyer in its sole discretion and (z) 98.5% (or, with
respect to any Purchased Loan which is a Wet Ink Mortgage Loan, 97.0%) of the
outstanding principal amount of such Purchased Mortgage Loan.

        1.3  In Section 3(f) of the Agreement, the reference in the third line
to "$200,000,000" is hereby deleted and replaced with "$300,000,000".

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        1.4  In Section 13(a) of the Agreement, clauses (xiii), (xix), (xx) and
(xxi) are hereby deleted in their entirety and replaced with the following:

        (xiii)Tangible Net Worth of the Seller shall be less than $315,000,000;

        (xix) the aggregate amount of the Seller's cash, Cash Equivalents and
available borrowing capacity on unencumbered assets that could be drawn against
(taking into account required haircuts) under committed warehouse facilities, on
a consolidated basis and on any given day, shall be less than $5,000,000 at any
time;

        (xx) Seller and its Affiliates shall at any time cease or fail to have
warehouse facilities with other lenders or buyers (other than the Buyer pursuant
to the Agreement) in an amount equal to or greater than $600,000,000; or

        (xxi) for any two consecutive fiscal quarters of Guarantor after the
date of this Agreement, Guarantor and its subsidiaries shall incur a loss on a
consolidated basis in accordance with GAAP.

        1.5  In Exhibit V of the Agreement, the representations and warranties
in paragraphs (o) and (zz) are hereby deleted in their entirety and replaced
with the following:

(o)    Loan-to-Value Ratio. The Mortgage Loans subject to Transactions do not
have a weighted average cumulative Loan-to-Value Ratio in excess of 85%. If a
Mortgage Loan has a Loan-to-Value Ratio greater than 90% and less than or equal
to 100%, the Purchase Price of such Mortgage Loan together with the Purchase
Price of Purchased Mortgage Loans secured by a first or a second lien on the
related Mortgaged Properties subject to then outstanding Transactions having a
Loan-to-Value Ratio greater than 90% and less than or equal to 100% does not, in
either case, exceed the greater of (x) 3% of the aggregate Purchase Price for
all Mortgage Loans which are subject to then outstanding Transactions and
(y) $10,000,000. For purposes of this paragraph, the Loan-to-Value Ratio for
A-MI loans is reduced by the amount of coverage of Mortgage Insurance.

(zz)    Wet Ink Mortgage Loans. The Purchase Price of a Wet Ink Mortgage Loan
together with the Purchase Price of Purchased Mortgage Loans which are Wet Ink
Mortgage Loans does not exceed, during the period beginning on the third from
last Business Day of each calendar month, through and including the seventh
Business Day of next succeeding calendar month, $80,000,000 and, at all other
times, $50,000,000; provided that such amounts referred to above in this clause
(zz) shall be reduced to $50,000,000 and $35,000,000, respectively, in the event
that the Guarantor has cash, Cash Equivalents and unused borrowing capacity on
unencumbered assets that could be drawn against (taking into account required
haircuts) under committed warehouse and repurchase facilities in an amount less
than either (a) $20,000,000, or (b) $17,500,000 in the event that Seller has
unused committed sale capacity on unencumbered assets that could be sold under
the Capital Z Residual Sale Agreement in an amount equal to not less than
$10,000,000.

        1.6  The following new definitions are hereby inserted in Section 2 of
the Agreement in their appropriate alphabetical location:

"Capital Z Residual Sale Agreement" shall mean that certain Residual Sale
Agreement, dated August 31, 2000, between Aames Capital Corporation and Capital
Z Investments, L.P., as amended, supplemented, restated or modified from time to
time.

"Cash Equivalents" shall mean (a) securities with maturities of 90 days or less
from the date of acquisition issued or fully guaranteed or insured by the United
States Government or any agency thereof, (b) certificates of deposit and
eurodollar time deposits with maturities of 90 days or less from the date of
acquisition and overnight bank deposits of any commercial

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bank having capital and surplus in excess of $500,000,000, (c) repurchase
obligations of any commercial bank satisfying the requirements of clause (b) of
this definition, having a term of not more than seven days with respect to
securities issued or fully guaranteed or insured by the United States
Government, (d) commercial paper of a domestic issuer rated at least A-1 or the
equivalent thereof by Standard and Poor's Ratings Group ("S&P") or P-1 or the
equivalent thereof by Moody's Investors Service, Inc. ("Moody's") and in either
case maturing within 90 days after the day of acquisition, (e) securities with
maturities of 90 days or less from the date of acquisition issued or fully
guaranteed by any state, commonwealth or territory of the United States, by any
political subdivision or taxing authority of any such state, commonwealth or
territory or by any foreign government, the securities of which state,
commonwealth, territory, political subdivision, taxing authority or foreign
government (as the case may be) are rated at least A by S&P or A by Moody's,
(f) securities with maturities of 90 days or less from the date of acquisition
backed by standby letters of credit issued by any commercial bank satisfying the
requirements of clause (b) of this definition or (g) shares of money market
mutual or similar funds which invest exclusively in assets satisfying the
requirements of clauses (a) through (f) of this definition.

        1.7  In Exhibit V of the Agreement, the following new representation and
warranty is hereby inserted in its appropriate alphabetical location:

(bbb)Mortgage Loans Purchased Through Clean-up Calls of Affiliate
Securitizations. The Purchase Price of Mortgage Loans subject to Transactions
purchased by the Seller through clean-up calls of securitizations of Affiliates
of the Seller which Mortgage Loans are Delinquent for 29 or fewer days does not
exceed $20,000,000. No Mortgage Loans subject to Transactions purchased by the
Seller through clean-up calls of securitizations of Affiliates of the Seller are
Delinquent for 30 or more days.

        Seller acknowledges and agrees that in determining the Market Value of
any Mortgage Loans subject to Transactions which were purchased by the Seller
through clean-up calls of securitizations of Affiliates of the Seller, the Buyer
may in its sole and absolute discretion determine the Market Value of such
Mortgage Loans separate and apart from the Market Value of any other Mortgage
Loans.

        1.8  The following new affirmative covenants labeled clauses (o) and
(p) are hereby inserted in Section 12 of the Agreement in their appropriate
alphabetical location:

(o)    In the event that the Seller or any of its Affiliates enters into a
warehouse facility or other funding vehicle with any other Person (including,
without limitation, a transaction with a new counterparty or a renewal of an
existing relationship) that is structured utilizing a "true sale" of mortgage
loans to a bankruptcy-remote non-consolidated special purpose entity ("SPE"),
Buyer shall have the right to restructure the Agreement and replace the
Agreement with a facility structured through an SPE.

(p)    Seller and its Affiliates shall not amend any other warehouse financing
agreements (including, but not limited to, credit agreements or repurchase
agreements) with other lenders or buyers without the prior written approval of
Buyer which approval shall not be unreasonably withheld, so long as the Seller
provides to the Buyer the opportunity to amend this Agreement to incorporate
similar terms.

        Section 2.    Covenants, Representations and Warranties of the
Parties.    

        2.1  Except as expressly amended by Section 1 hereof, the Agreement
remains unaltered and in full force and effect. Each of the Parties hereby
reaffirms all terms and covenants made in the Agreement as amended hereby.

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        2.2  Each of the Parties hereby represents and warrants to the other
that (a) this Amendment constitutes the legal, valid and binding obligation of
such Party, enforceable against such Party in accordance with its terms, and
(b) the execution and delivery by such Party of this Amendment has been duly
authorized by all requisite corporate action on the part of such Party and will
not violate any provision of the organizational documents of such Party.

        Section 3.    Effect upon the Agreement.    

        3.1  Except as specifically set forth herein, the Agreement shall remain
in full force and effect and is hereby ratified and confirmed. All references to
the "Agreement" in the Master Repurchase Agreement Governing Purchases and Sales
of Mortgage Loans shall mean and refer to the Master Repurchase Agreement
Governing Purchases and Sales of Mortgage Loans as modified and amended hereby.

        3.2  The execution, delivery and effectiveness of this Amendment shall
not operate as a waiver of any right, power or remedy of any Party under the
Agreement, or any other document, instrument or agreement executed and/or
delivered in connection therewith.

        Section 4.    Governing Law.    

        THIS AMENDMENT SHALL BE CONSTRUED, INTERPRETED AND GOVERNED BY THE LAW
OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
PRINCIPLES THEREOF.

        Section 5.    Counterparts.    

        This Amendment may be executed in any number of counterparts, and all
such counterparts shall together constitute the same agreement.

        [SIGNATURE PAGE FOLLOWS]

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        IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be
executed as of the day and year first above written.

    SELLER:               AAMES CAPITAL CORPORATION, as Seller                  
      By:

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      Name: Jon Van Deuren       Title: Senior Vice President                  
                BUYER:               LEHMAN BROTHERS BANK, FSB, as Buyer        
                By:

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      Name:         Title:  

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EXHIBIT 10.32(c)

THIRD AMENDMENT TO MASTER REPURCHASE AGREEMENT GOVERNING PURCHASES AND SALES OF
MORTGAGE LOANS