AMENDMENT NO. 2
                                       TO
                                    GUARANTY



THIS AMENDMENT NO. 2 TO GUARANTY (this "Amendment"), dated as of June 1, 2000,
amends the Guaranty dated as of February 10, 2000 (the "Guaranty"), made by
Aames Financial Corporation (the "Guarantor") in favor of Greenwich Capital
Financial Products, Inc. (the "Lender"). Capitalized terms used herein and not
otherwise defined herein shall have the meanings set forth in the Guaranty or,
if not so defined therein, the Loan Agreement (as defined in the Guaranty).

WHEREAS, the Guarantor and the Lender wish to amend the Guaranty to modify
certain of the terms thereof.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Guarantor and the Lender agree as follows:


1.       AMENDMENTS

Effective as of March 31, 2000 the following Sections of the Guaranty are hereby
amended as follows:

1.1 Section 3(b)(i) of the Guaranty is hereby deleted in its entirety and
replaced with the following:

              "MAINTENANCE OF TANGIBLE NET WORTH. The Tangible Net Worth of the
              Guarantor, on a consolidated basis and on any given day, shall be
              equal to or greater than (a) prior to and on June 30, 2000,
              $20,000,000, (b) after June 30, 2000 and prior to and on July 31,
              2000, $45,000,000 and (c) after July 31, 2000, $55,000,000; and
              not less than 80% of the Tangible Net Worth of the Guarantor, on a
              consolidated basis, as at the end of each fiscal quarter;"

1.2 Section 3(b)(ii) of the Guaranty is hereby deleted in its entirety and
replaced with the following:

              "MAINTENANCE OF RATIO OF TOTAL INDEBTEDNESS TO TANGIBLE NET WORTH.
              The Guarantor shall not permit the ratio of Total Indebtedness to
              Tangible Net Worth, on a consolidated basis and on any given day,
              to be greater than (a) prior to and on June 30, 2000, 16.0 to 1.0,
              (b) after June 30, 2000 and prior to and on July 31, 2000, 7.0 to
              1.0 and (c) after July 31, 2000, 5.5 to 1.0;"





1.3 Section 3(b)(iii) of the Guaranty is hereby deleted in its entirety and
replaced with the following:

              "LIQUIDITY. The aggregate amount of the Guarantor's cash, Cash
              Equivalents and available borrowing capacity on unencumbered
              assets that could be drawn against (taking into account required
              haircuts) under committed warehouse or working capital facilities,
              on a consolidated basis and on any given day, shall be equal to or
              greater than (a) prior to and on June 15, 2000, $5,000,000 and (b)
              after June 15, 2000, $15,000,000;"


1.4 Section 3(b)(iv) of the Guaranty is hereby deleted in its entirety and
replaced with the following:

              "MAINTENANCE OF RATIO OF EARNINGS TO TOTAL INTEREST EXPENSE. The
              Guarantor shall not permit the ratio of earnings before interest
              and taxes to total interest expense, on a consolidated basis, to
              be less than 1.05 to 1.0 measured on a rolling basis from the
              immediately preceding two calendar quarters commencing with the
              two quarters ended September 30, 2000 and December 31, 2000;"

1.5 Section 3(b)(v) of the Guaranty is hereby deleted in its entirety and
replaced with the following:

              "PROFITABILITY. The Guarantor shall have a GAAP after tax net
              income of at least $1.00 for the fiscal quarter ended September
              30, 2000;"

2.       REPRESENTATIONS

In order to induce the Lender to execute and deliver this Amendment, the
Guarantor hereby represents to the Lender that as of the date hereof, after
giving effect to this Amendment, (a) the representations and warranties set
forth in Section 3 of the Guaranty are and shall be and remain true and correct
and (b) the Guarantor is in full compliance with all of the terms and conditions
of the Guaranty.


3.       MISCELLANEOUS

Except as specifically amended herein, the Guaranty shall continue in full force
and effect in accordance with its original terms. Reference to this specific
Amendment need not be made in the Guaranty or any other instrument or document
executed in connection therewith, or in any certificate, letter or communication
on issued or made pursuant to or with respect to the Guaranty, any reference in
any of such items to the Guaranty being sufficient to refer to the Guaranty as
amended hereby.



IN WITNESS WHEREOF, the Guarantor and the Lender have caused this Amendment No.
2 to be duly executed and delivered as of the date first above written.


                                     AAMES FINANCIAL CORPORATION


                                     By:               /s/ Jon D. Van Deuren
                                        ---------------------------------------
                                     Name:             Jon D. Van Deuren
                                     Title:            Senior Vice President


                                     GREENWICH CAPITAL FINANCIAL
                                     PRODUCTS, INC.


                                     By:               /s/ John C. Anderson
                                        ---------------------------------------
                                     Name:             John C. Anderson
                                     Title:            Senior Vice President