**Exhibit 10.8(d)**

**AMENDMENT NO. 3**

AMENDMENT NO. 3, dated asof May 9, 2006 (this “Amendment”) to that certain Master RepurchaseAgreement dated as of December 2, 2005, (as amended, restated, supplemented orotherwise modified prior to the date hereof, the “Existing RepurchaseAgreement”; as modified hereby and as further amended, restated,supplemented or otherwise modified and in effect from time to time, the “RepurchaseAgreement”) among AAMES CAPITAL CORPORATION, a California corporation (“AamesCapital”), AAMES FUNDING CORPORATION, a California corporation (“AamesFunding”), AAMES INVESTMENT CORPORATION, a Maryland corporation (“AamesInvestment”, together with Aames Capital and Aames Funding, collectively,the “Sellers”, each a “Seller”) and MORGAN STANLEY BANK (the “Buyer”).  Capitalized terms used but not otherwisedefined herein shall have the meanings given to them in the Existing RepurchaseAgreement.  Unless otherwise stated, allarticle and section references used herein refer to the corresponding parts ofthe Existing Repurchase Agreement.

**RECITALS**

The Sellers and the Buyer are parties to the ExistingRepurchase Agreement.

The Sellers and the Buyer have agreed, subject to theterms and conditions of this Amendment, that the Existing Repurchase Agreementshall be modified as set forth in this Amendment.

## Therefore, in consideration of the premises and for other good andvaluable consideration, the receipt and sufficiency of which are herebyacknowledged, the Sellers and the Buyer agree as follows:

## **SECTION 1.**  Amendment.  Effective as of March 31, 2006 (the “AmendmentEffective Date”), the financial covenant set forth in Section 7.14(d), ishereby deleted in its entirety and the following new covenant is inserted inlieu thereof:

## “(d)         Maintenance of Profitability.  Aames Investment shall not permit its NetIncome before tax, generated during the fiscal quarter ended June 30, 2006, andthereafter, generated over any two consecutive fiscal quarters, measured on thelast day of each fiscal quarter, to be less than $1.00.”

**SECTION2.**  ConditionsPrecedent.  This Amendment and itsprovisions shall become effective as of the Amendment Effective Date, providedthat all of the following conditions precedent shall have been satisfied:

### (a)  Delivered Documents.  On or before the Amendment Effective Date,the Buyer shall have received all of the following documents, each of whichshall be satisfactory to the Buyer in form and substance:

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#### (i)            Amendment.  This Amendment, executed and delivered by aduly authorized officer of each of the Sellers and the Buyer; and

#### (ii)           OtherDocuments.  Such other documents asthe Buyer or counsel to the Buyer may reasonably request.

### (b)  No Default.  On the Amendment Effective Date,(i) each Seller shall be in compliance with all of the terms andprovisions set forth in the Existing Repurchase Agreement and the otherRepurchase Documents on its part to be observed or performed, (ii) therepresentations and warranties made and restated by each Seller pursuant toSection 3 of this Amendment shall be true and complete on and as of suchdate with the same force and effect as if made on and as of such date, and(iii) no Default or Event of Default shall have occurred and be continuingon such date.

**SECTION 3. **Representationsand Warranties.  Each Seller herebyrepresents and warrants to the Buyer, as of the date hereof and as of theAmendment Effective Date, that it is in compliance with all of the terms andprovisions set forth in the Repurchase Documents on its part to be observed orperformed and that no Default or Event of Default has occurred or is continuingand each Seller hereby confirms and reaffirms the representations andwarranties contained in Section 6 of the Repurchase Agreement.

## **SECTION 4.**  Limited Effect.  Except as expressly modified by thisAmendment, the Existing Repurchase Agreement will continue to be, and willremain, in full force and effect in accordance with its terms; provided,that upon the Amendment Effective Date, each reference therein and herein tothe “Repurchase Documents” shall be deemed to include this Amendment and to bea reference to the Existing Repurchase Agreement as modified by this Amendment.

## **SECTION 4.**  Counterparts.  This Amendment may be executed by each of theparties hereto on any number of separate counterparts, each of which shall bean original and all of which taken together shall constitute one and the sameinstrument.  Delivery of an executedcounterpart of a signature page of this Amendment in Portable Document Format(PDF) or by facsimile transmission shall be effective as delivery of a manuallyexecuted original counterpart of this Amendment.

##### **SECTION5.**  GOVERNING LAW.  THIS AMENDMENT SHALL BE GOVERNED BY,CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

[SIGNATURE PAGEFOLLOWS]

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INWITNESS WHEREOF, the parties hereto have caused this Amendment to be dulyexecuted and delivered as of the day and year first above written.
|       | SELLERS                           |
|------------|-----------------------------------|
|       |                              |
| ** ** | **AAMES  CAPITAL CORPORATION**    |
| ** ** | ** **                        |
| ** ** | ** **                        |
|       | By:                               |   |   |
|       |                              | Name: |
|       |                              | Title: |
|       |                              |   |
| ** ** | **AAMES  FUNDING CORPORATION**    |
| ** ** | ** **                        |
| ** ** | ** **                        |
|       | By                                |   |   |
|       |                              | Name: |
|       |                              | Title: |
|       |                              |
| ** ** | **AAMES  INVESTMENT CORPORATION** |
| ** ** | ** **                        |
| ** ** | ** **                        |
|       | By                                |   |   |
|       |                              | Name: |
|       |                              | Title: |
|       |                              |
|       | BUYER                             |
|       |                              |
| ** ** | **MORGAN  STANLEY BANK**          |
| ** ** | ** **                        |
| ** ** | ** **                        |
|       | By                                |   |   |
|       |                              | Name: |
|       |                              | Title: |

 

 

*[Amendment No. 3 to Aames Repurchase Agreement]*

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