<PAGE>

                                                               Exhibit 10.37(b)

                                 FIRST AMENDMENT
                                       TO
                       MASTER LOAN AND SECURITY AGREEMENT


     THIS FIRST AMENDMENT TO MASTER LOAN and SECURITY AGREEMENT (the "First
Amendment") is made and dated as of the 30th day of December, 1999, by and among
AAMES CAPITAL CORPORATION, a California corporation (the "Borrower"), and MORGAN
STANLEY MORTGAGE CAPITAL, INC., a New York corporation (the "Lender"), and
together with the Borrower (the "Parties").

                                    RECITALS

     A.   Pursuant to that certain Master Loan and Security Agreement dated as
          of October 29, 1999 by and between the Borrower and the Lender (the
          "Loan Agreement"), the Borrower and Lender agreed to enter into
          transactions on the terms and subject to the conditions set forth
          therein. All capitalized terms not otherwise defined herein shall have
          the meanings given to such terms in the Loan Agreement.

     B.   The Parties hereto wish to amend certain provisions in the Loan
          Agreement as set forth more particularly below.

     NOW, THEREFORE, in consideration of the foregoing Recitals and for other
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Parties hereto agree as follows:

                                    AGREEMENT

     1. MAINTENANCE OF PROFITABILITY. To reflect the agreement of the Parties
hereto to amend the negative covenant regarding the Borrower's Maintenance of
Profitability, effective as of the First Amendment Effective Date; Section 7.16
of the Loan Agreement is hereby amended to delete the reference to "December 31,
1999" and to replace it with "June 30, 2000".

     2. FIRST AMENDMENT EFFECTIVE DATE. This First Amendment shall become
effective on the 30th day of December, 1999 (the "First Amendment Effective
Date").

     3. REAFFIRMATION OF OBLIGATIONS. The Borrower hereby reaffirms all of its
obligations under the Loan Agreement and under all other documents, instruments
and agreements executed in connection therewith and acknowledges and agrees that
such obligations are not altered, modified or affected in any manner or to any
extent except as expressly provided herein.

<PAGE>

     4. COUNTERPARTS. This First Amendment may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
agreement.

     5. REPRESENTATIONS AND WARRANTIES. The Borrower hereby represents and
warrants to Lender as follows:

          (a)  The Borrower has the corporate power and authority and the leagal
               right to execute, deliver and perform this First Amendment and
               has taken all necessary corporate action to authorize the
               execution, delivery and performance of this First Amendment. This
               First Amendment has been duly executed and delivered on behalf of
               the Borrower and constitutes the legal, valid and binding
               obligations enforceable in accordance with its terms.

          (b)  At and as of the date of execution hereof and as of the First
               Amendment Effective Date and both prior to and after giving
               effect hereto: (a) the representations and warranties of Borrower
               contained in the Loan Agreement are accurate and complete in all
               respects, and (ii) there has not occurred and Event of Default.

     6. NO OTHER AMENDMENT. Except as expressly amended hereby, the Loan
Agreement shall remain in full force and effect as written and amended to date.



                            [SIGNATURE PAGE FOLLOWS]
<PAGE>

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


                                      AAMES CAPITAL CORPORATION

                                      By:      /s/ David A. Sklar
                                          -------------------------------------
                                      Name:    David A. Sklar
                                      Title:   Executive Vice President and CFO


                                      MORGAN STANLEY MORTGAGE
                                      CAPITAL INC.


                                      By:      /s/ Andrew Neuberger
                                          -------------------------------------
                                      Name:    Andres Neuberger
                                      Title:   Vice President