Aames Financial Corporation Declared Cash Dividend on Series B, Series C and Series D Convertible Preferred Stock.

LOS ANGELES -- Aames Financial Corporation (OTCBB:AMSF), a 50 year old national subprime mortgage lender, declared a cash dividend on its Series B convertible preferred stock, Series C convertible preferred stock, and Series D convertible preferred stock for the period ending November 5, 2004. The Company will pay this dividend, approximately $1.1 million, on November 5, 2004 to stockholders of record on October 28, 2004.

The quarterly cash dividend is calculated based upon the dividend rate on the stated value of the shares accrued from October 1, 2004 through November 5, 2004. In connection with this cash dividend, the holders of Series B Convertible Preferred Stock will receive $0.006 per share, holders of Series C Convertible Preferred Stock will receive $0.032 per share and holders of Series D Convertible Preferred Stock will receive $0.005 per share. All fractional payment amounts will be rounded up to the nearest cent for each shareholder.

For more information, contact either Ronald J. Nicolas, Jr., Executive Vice President and Chief Financial Officer, or Jon D. Van Deuren, Senior Vice President, Finance and Chief Accounting Officer, in the Company's Investor Relations Department at 323-210-5311 or at [e-mail] via email.

Additional information may also be obtained by visiting www.aames.net, the Company's website.

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: increases in mortgage lending interest rates; adverse changes in the secondary market for mortgage loans; decline in real estate values; decreases in earnings from the Company calling securitization trusts; limited cash flow to fund operations; dependence on short-term financing facilities; obligations to repurchase mortgage loans and indemnify investors; concentration of operations in California, Florida, New York and Texas; extensive government regulation; concentrated ownership of the Company' by a single stockholder; losses in securitization trusts; and intense competition in the mortgage lending industry. 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 Annual Report on Form 10-K for the year ended June 30, 2004 and subsequent filings by the Company with the United States Securities and Exchange Commission.