8-K

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549
                         ---------------------------

                                    Form 8-K

                                 CURRENT REPORT
                       PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

      Date of Report (Date of earliest event reported): August 26, 1999


                           AAMES FINANCIAL CORPORATION
             (Exact name of Registrant as Specified in Its Charter)


        DELAWARE                      0-19604                 95-340340
(State or Other Jurisdiction        (Commission             (IRS Employer
   of Incorporation)                File Number)          Identification No.)



                       350 South Grand Avenue, 52nd Floor
                          Los Angeles, California 90071
                   (Address of Principal Executive Offices)



                                  (323) 210-5000
             (Registrant's Telephone Number, Including Area Code)


                                         NA
         (Former Name or Former Address, if Changed Since Last Report)


                                     Page 1




ITEM 5.     OTHER EVENTS

      Reference is made to the press release of Registrant issued on August 26,
1999 which contains information meeting the requirements of this Item 5 and is
incorporated herein by this reference. A copy of the press release is attached
to this Form 8-K as Exhibit 99.


ITEM 7.     FINANCIAL STATEMENTS AND EXHIBITS

      (c)   EXHIBITS

      99 Press release issued August 26, 1999.


                                     Page 2



                                   SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this Current Report on Form 8-K to be
signed on its behalf by the undersigned hereunto duly authorized.


                                    AAMES FINANCIAL CORPORATION


Dated:  August 30, 1999             By:    /S/ BARBARA S. POLSKY
                                           -----------------------------------
                                           Barbara S. Polsky
                                           Executive Vice President,
                                           General Counsel and Secretary


                                     Page 3



                                  EXHIBIT INDEX


EXHIBIT NO.             DESCRIPTION OF EXHIBIT

   99                   Press release issued August 26, 1999


                                     Page 4

EX-99

                                   EXHIBIT 99

CONTACTS:

David Sklar
Aames Financial Corporation
(323) 210-5311

Jeffrey Lloyd/Steve Hawkins
Sitrick And Company
(310) 788-2850



                           AAMES FINANCIAL CORPORATION
                   NOTIFIES STOCKHOLDERS OF RIGHTS OFFERING


LOS ANGELES, AUGUST 26, 1999 - Aames Financial Corporation (NYSE: AAM), a leader
in subprime home equity lending, today sent the notification to stockholders
required by the rules of the New York Stock Exchange regarding the Company's
plans for its previously announced rights offering.

On December 23, 1998, Aames Financial Corporation entered into a preferred stock
purchase agreement, as subsequently amended, with Capital Z Financial Services
Fund II, L.P., a $1.8 billion global private equity fund focused on the
insurance, financial services and healthcare services industries. Pursuant to
the preferred stock purchase agreement, Capital Z (through a partnership
majority owned by Capital Z) has to date purchased $100 million of Series B
Convertible Preferred Stock of the Company and Series C Convertible Preferred
Stock of the Company at a per share equivalent price of $1.00 per share.

The Agreement also provides for an offering to the holders of the Company's
common stock of non-transferable subscription rights to purchase one share of
Series C Convertible Preferred Stock for $1.00 per share for each share of
common stock owned. If less than 25 million shares of Series C Convertible
Preferred Stock are purchased in this rights offering, Capital Z has agreed to
purchase the difference (up to 25 million shares of Series C Convertible
Preferred Stock) for $1.00 per share.

The Company has filed a registration statement with the Securities and Exchange
Commission to register the subscription rights, underlying shares of Series C
Convertible Preferred Stock and the shares of common stock into which the Series
C Convertible Preferred Stock is convertible. The record date for the rights
offering is September 7, 1999. It is expected that certificates evidencing the
right to subscribe will be mailed to holders of common stock as soon as
practicable following the record date. The subscription rights will expire on
September 29, 1999, subject to extension by the Company.

The rights offering is subject to three conditions: (i) the effectiveness of
registration under the Securities Act of 1933 and (ii) stockholder approval, and
completion, of a recapitalization which includes an increase of the Company's
authorized common and preferred stock (together with a split of the outstanding
Series B Convertible Preferred Stock and Series C Convertible Preferred Stock)
at the 1998 Annual Meeting of Stockholders to be held on September 13, 1999.

A registration statement relating to these securities has been filed with the
Securities and Exchange Commission but has not yet become effective. These
securities may not be sold nor may offers to buy be accepted prior to the time
the registration statement becomes effective. This communication shall not
constitute an offer to sell or the


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solicitation of an offer to buy nor shall there be any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.

From time to time the Company may publish forward-looking statements relating to
such matters as anticipated financial performance, business prospects and
similar matters. The Private Securities Litigation Reform Act of 1995 provides a
safe harbor for forward-looking statements. In order to comply with the terms of
the safe harbor, the Company notes that a variety of factors could cause the
Company's actual results and experience to differ materially from the
anticipated results or other expectations expressed in the Company's
forward-looking statements. The risks and uncertainties that may affect the
operations, performance and results of the Company's business include the
following: negative cash flows and capital needs; delinquencies and losses in
securitization trusts; negative impact on cash flow, right to terminate mortgage
servicing; changes in interest rate environment; year 2000 compliance and
technological enhancement; prepayment risk; basis risk; credit risk; risk of
adverse changes in the secondary market for mortgage loans; dependence on
funding sources; dependence on broker network; risks involved in commercial
mortgage lending; strategic alternatives; competition; concentration of
operations in California; timing of loan sales; economic conditions; contingent
risks; and government regulation. For a more complete discussion of these risks
and uncertainties, see "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Risk Factors" in the Company's
form 10-K for the fiscal year ended June 30, 1998 and "Item 2. Management's
Discussion and Analysis of Financial Condition and Results of Operations -- Risk
Factors" in form 10-Q for the quarters ended September 30, 1998, December 31,
1998 and March 31, 1999.

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