<PAGE>
                                                                EXHIBIT 10.3(c)


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

This Third Amendment, dated as of October 31, 2000 (the "FIRST AMENDMENT"),
to the Second Amended and Restated Master Repurchase Agreement Governing
Purchases and Sales of Mortgage Loans dated as of April 28, 2000 (as amended,
the "AGREEMENT"), is made by and between LEHMAN COMMERCIAL PAPER INC.
("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.

     THE DEFINITION OF "FINAL REPURCHASE DATE" IN SECTION 1 OF THE AGREEMENT
IS HEREBY DELETED IN ITS ENTIRETY AND REPLACED WITH THE FOLLOWING:

     "Final Repurchase Date" means November 30, 2000 or such earlier date on
     which all Purchased Mortgage Loans are required to be immediately
     repurchased pursuant to Section 14(a).

     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.

           2.2  Each of the Parties hereby represents and warrants to the
     other that (a) this First 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 First 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.

<PAGE>

     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 Second Amended and Restated
     Master Repurchase Agreement Governing Purchases and Sales of Mortgage
     Loans shall mean and refer to the Second Amended and Restated Master
     Repurchase Agreement Governing Purchases and Sales of Mortgage Loans as
     modified and amended hereby.

           3.2  The execution, delivery and effectiveness of this First
     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 FIRST 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 First Amendment may be executed in any number of counterparts, and
all such counterparts shall together constitute the same agreement.



                              [SIGNATURE PAGE FOLLOWS]


                                      2

<PAGE>

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

                                        SELLER:

                                        AAMES CAPITAL CORPORATION, as Seller

                                        By:   /s/ John Kohler
                                            --------------------------------
                                        Name:  John Kohler
                                        Title: Executive Vice President


                                        BUYER:

                                        LEHMAN COMMERCIAL PAPER INC., as Buyer

                                        By:   /s/ Fred C. Madonna
                                            --------------------------------
                                        Name:  Fred C. Madonna
                                        Title: Authorized Signatory