Exhibit 11.1

AAMES INVESTMENT CORPORATION

Computation of basic and diluted net income (loss) per common share

Three and six months ended June 30, 2005 and 2004

(amounts in
thousands, except per share data)



|                                                                          |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |        |  
|------------------------------------------------------------------------- |  | -------------------------- | ------- | - | ------------------------ | - | ------- | ---- |  | - | ------- | - |  | - | ------ | -
|                                                                          |  | Three Months EndedJune 30, |         |   | Six Months EndedJune 30, |  
|                                                                          |  | 2005                       |         |   | 2004                     |   |         | 2005 |  |   | 2004    |  
|Basic net income (loss) per common share:                                 |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |        |  
|                                                                          |  |                            |         |  
|Net income (loss)                                                         |  | $                          | (22,575 | ) |                          | $ | 23,981  |      |  | $ | (23,341 | ) |  | $ | 44,870 |  
|Less: Accrued dividends on Series B, C, and D Convertible Preferred Stock |  |                            |        |   |                          |   | (2,869  | )    |  |   |        |   |  |   | (5,738 | )
|                                                                          |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |        |  
|Basic net income (loss) to common stockholders                            |  | $                          | (22,575 | ) |                          | $ | 21,112  |      |  | $ | (23,341 | ) |  | $ | 39,132 |  
|                                                                          |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |        |  
|Basic weighted average number of common shares outstanding                |  |                            | 61,535  |   |                          |   | 7,170   |      |  |   | 61,478  |   |  |   | 7,145  |  
|                                                                          |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |        |  
|Basic net income (loss) per common share                                  |  | $                          | (0.37   | ) |                          | $ | 2.94    |      |  | $ | (0.38   | ) |  | $ | 5.48   |  
|                                                                          |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |        |  
|                                                                          |  |                            |         |  
|Diluted net income (loss) per common share:                               |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |        |  
|                                                                          |  |                            |         |  
|Basic net income (loss) to common stockholders                            |  | $                          | (22,575 | ) |                          | $ | 21,112  |      |  | $ | (23,341 | ) |  | $ | 39,132 |  
|Plus: Accrued dividends on Series B, C, and D Convertible Preferred Stock |  |                            |        |   |                          |   | 2,869   |      |  |   |        |   |  |   | 5,738  |  
|Interest on 5.5% Convertible Subordinated Debentures                      |  |                            |        |   |                          |   | 522     |      |  |   |        |   |  |   | 1,045  |  
|                                                                          |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |        |  
|Diluted net income (loss) to common stockholders                          |  | $                          | (22,575 | ) |                          | $ | 24,503  |      |  | $ | (23,341 | ) |  | $ | 45,915 |  
|                                                                          |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |        |  
|Basic weighted average number of common shares outstanding                |  |                            | 61,535  |   |                          |   | 7,170   |      |  |   | 61,478  |   |  |   | 7,145  |  
|Plus incremental shares from assumed                                      |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |        |  
|Conversions of:                                                           |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |        |  
|Series B, C and D Convertible Preferred Stock                             |  |                            |        |   |                          |   | 85,055  |      |  |   |        |   |  |   | 85,061 |  
|5.5% Convertible Subordinated Debentures                                  |  |                            |        |   |                          |   | 824     |      |  |   |        |   |  |   | 824    |  
|Exercise of:                                                              |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |        |  
|Common Stock options                                                      |  |                            |        |   |                          |   | 7,500   |      |  |   |        |   |  |   | 2,123  |  
|Warrants                                                                  |  |                            |        |   |                          |   | 3,522   |      |  |   |        |   |  |   | 1,222  |  
|                                                                          |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |        |  
|Diluted weighted average number of common shares outstanding              |  |                            | 61,535  |   |                          |   | 104,071 |      |  |   | 61,478  |   |  |   | 96,375 |  
|                                                                          |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |        |  
|Diluted net income (loss) per common share                                |  | $                          | (0.37   | ) |                          | $ | 0.24    |      |  | $ | (0.38   | ) |  | $ | 0.48   |  
|                                                                          |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |        |