AMENDMENT NO. 4 TO THE
                                        MASTER LOAN AND SECURITY AGREEMENT

AMENDMENT NO. 4, dated as of February 12, 2003 (this "Amendment"),
to the Amended and Restated Master Loan and Security Agreement, dated as of November 16, 2001 (as previously amended, supplemented or
otherwise modified, the "Existing Loan Agreement", and as amended hereby and as further amended, supplemented or
otherwise modified from time to time, the "Loan Agreement"), among AAMES CAPITAL CORPORATION ("Aames Capital"),
AAMES FUNDING CORPORATION ("Aames Funding" and together with Aames Capital, each a "Borrower" and collectively,
the "Borrowers") and MORGAN STANLEY DEAN WITTER MORTGAGE CAPITAL INC. (the "Lender").

RECITALS

The  Borrowers  and the Lender are parties to the  Existing  Loan  Agreement.  Capitalized  terms
used but not otherwise defined herein shall have the meanings given to them in the Existing Loan Agreement.

The  Borrowers  and  the  Lender  have  agreed,  subject  to the  terms  and  conditions  of this
Amendment, that the Existing Loan Agreement be amended to revise the maintenance of Tangible Net Worth covenant.

Accordingly,  the Borrowers and the Lender hereby agree, in  consideration of the mutual premises
and mutual obligations set forth herein, that the Existing Loan Agreement is hereby amended as follows:

Section 1.  Amendment. The Existing Loan Agreement is hereby
amended by deleting  Section 7.14 in its entirety and substituting in lieu thereof the following new Section 7.14:

"7.14   Maintenance of Tangible Net Worth. 
Aames Capital shall not permit Tangible Net Worth
at any time to be less than $315,000,000."

Section 2.  Conditions Precedent. This Amendment shall be effective as of December 31, 2002 (the
"Amendment Effective Date"); provided that the following conditions precedent shall have been satisfied:

2.1   Delivered  Documents. 
The Lender shall have received the following  documents,  each of
which shall be satisfactory to the Lender in form and substance:

(a)        Amendment.   This Amendment,  executed and delivered by a duly authorized  officer of each Borrower and the
         Lender; and

(b)        Other Documents.   Such other documents as the Lender or counsel to the Lender may reasonably request.

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2.2        No Default.   On the Amendment  Effective  Date, (i) each Borrower shall be in compliance
with all the  terms  and  provisions  set  forth in the  Existing  Loan  Agreement  on its part to be  observed  or
performed,  (ii) the  representations  and warranties  made and restated by the Borrowers  pursuant to Section 3 of
this  Amendment  shall be true and complete on and as of such date with the same force and effect as if made on and
as of such date, and (iii) no Default shall have occurred and be continuing on such date.

Section 3.          Representations  and  Warranties. 
  Each  Borrower  hereby  represents  and warrants to the Lender
that it is in  compliance  with all the terms and  provisions  set  forth in the Loan  Documents  on its part to be
observed or performed,  and that no Default has occurred or is  continuing,  and hereby  confirms and reaffirms the
representations and warranties contained in Section 6 of the Loan Agreement.

Section 4.          Limited Effect. 
Except as expressly  amended and modified by this  Amendment,  the Existing Loan
Agreement  shall  continue  to be,  and shall  remain,  in full  force and  effect in  accordance  with its  terms;
provided,  however,  that reference  therein and herein to the "Loan Documents" shall be deemed to include,  in any
event, (i) the Existing Loan Agreement,  (ii) Amendment No. 1 to the Master Loan and Security  Agreement,  dated as
of November 14, 2002,  (iii)  Amendment No. 2 to the Master Loan and Security  Agreement,  dated as of November 22,
2002,  (iv)  Amendment  No. 3 to the Master Loan and  Security  Agreement,  dated as of December 5, 2002,  (v) this
Amendment,  (vi) the Note,  (vii) the  Custodial  Agreement  and  (viii)  the  Custodial  Joinder  Agreement.  Each
reference  to the Loan  Agreement  in any of the Loan  Documents  shall be deemed to be a reference to the Existing
Loan  Agreement as amended  hereby.  The execution of this Amendment by the Lender shall not operate as a waiver of
any of its rights,  powers or privileges  under the Loan Agreement or under any of the other Loan Documents  except
as expressly set forth herein.

Section 5.          Counterparts. 
  This  Amendment  may be executed  by each of the  parties  hereto on any number of
separate  counterparts,  each of which shall be an original and all of which taken  together  shall  constitute one
and the same instrument.

Section 6.          GOVERNING  LAW. 
 THIS  AMENDMENT  SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE  WITH, THE LAW
OF THE STATE OF NEW YORK WITHOUT REFERENCE TO THE CHOICE OF LAW PROVISIONS THEREOF.

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

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|                                                          |                              
|--------------------------------------------------------- | -----------------------------
|BORROWER                                                  |                              
|                                                          |                              
|**AAMES
      CAPITAL CORPORATION**                       |                              
|                                                          |                              
|                                                          |                              
|By                                                        | _____________________________
|Name:                                                     |                              
|Title:                                                    |                              
|                                                          |                              
|**AAMES
      FUNDING CORPORATION**                       |                              
|                                                          |                              
|                                                          |                              
|By                                                        | _____________________________
|Name:                                                     |                              
|Title:                                                    |                              
|                                                          |                              
|LENDER                                                    |                              
|                                                          |                              
|**MORGAN
      STANLEY DEAN WITTER MORTGAGE CAPITAL INC** |                              
|                                                          |                              
|                                                          |                              
|By                                                        | __________________________   
|Name:                                                     |                              
|Title:                                                    |                              



























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