Exhibit 99.1

Investment Corporation

Aames Investment Corporation Reports Second Quarter Results

Core EPS of $0.27, GAAP EPS of $0.11

Retail Production up 22.3% From Year Ago

Net Cost to Originate Ratio of 2.08%

Los Angeles, California, August 9, 2006 – Aames Investment Corporation (NYSE: AIC), a nationwide subprime mortgage lender, today reported core net income of $16.7 million, or $0.27 per diluted share and GAAP net income of $7.2 million, or $0.11 per diluted share for the second quarter of 2006. During the quarter, the Company recorded a mark-to-market derivative loss under FASB 133 of $9.5 million equal to a pretax loss per common share of $0.15.

Second Quarter 2006 Operational Highlights

· Net cost to originate was 2.08%, compared with 2.33% in the second quarter of 2005;

· Weighted average interest rate on loan production was 8.72%, compared with 8.39% for the first quarter of 2006;

· Taxable portfolio net interest margin was 1.17%;

· Retail Channel production increased by 22.3% from the second quarter of 2005 and 2.4% from the first quarter of 2006 and

· Total loan production was $1.2 billion, 25.2% below year-ago volume, reflecting current market conditions and the absorption of Aames wholesale lending operations by Accredited Home Lenders during the quarter.

Mr. A. Jay Meyerson, Chairman and CEO of Aames, said, “We are pleased with our strong second quarter results which clearly demonstrate the strength of our core retail franchise. Our retail production increased 22.3% over last year and accounted for 63.9% of total production during the quarter. Our results were also positively impacted by increased loan coupons that generated higher net gain on sale of loans, as well as lower than expected origination and credit costs.”

On May 25, Aames announced a definitive agreement to be acquired by Accredited Home Lenders Co. (NASDAQ: LEND). The deal is expected to close in October 2006. The Company also completed the sale of its wholesale operation to Accredited in July. The Company and Accredited also announced that their joint proxy statement was mailed to Aames shareholders on August 4th and that Aames has set a shareholder meeting date of September 14th, 2006 to vote on the approval of the merger with Accredited.

Financial Disclosure

The Company has included measurements of core financial metrics, including core net interest income, core net income and loss and core diluted earnings and loss per share, which are non-GAAP financial metrics. Core earnings excludes the mark-to-market derivative gain or loss under FASB 133, as well as non-core charges or credits to income. The Company does not account for its derivative financial instruments as cash flow or fair value hedges under the provisions of Statement of Financial Accounting Standards No. 133 (Accounting for Derivative Financial Instruments and Hedging Activities) and, as a result, the unrealized mark-to-market gains or losses on the derivative financial instruments are recorded as income or losses, even though the cash flows will not be received until sometime in the future. By excluding the impact of the mark-to-market gain or loss from the net income or net loss, management believes that core net interest income and core net income or loss can provide a useful measurement of the Company’s operating performance.

Throughout this press release, the Company will provide comparisons between the second quarter of 2006 and the first quarter of 2006 and the second quarter of 2005. Due to certain changes mentioned in our March 17, 2006 earnings announcement, including expansion of corporate cost reductions, a corporate reorganization making Aames Financial, our current TRS, our parent company and a C Corp for tax purposes, management believes that some comparisons to prior periods do not provide the best measurement of the Company’s financial performance.

Core Revenue and Expense

The following table details the components of total and core revenue and expense and core net income or loss for the quarters ended June 30, 2006 and 2005 and March 31, 2006.

	Quarter Ended								Percentage Change
(dollars in thousands)	6/30/2006		6/30/2005			3/31/2006			Y-Y		Sequential

Net interest income after provision for loan losses (1)	$	25,509	$	16,632		$	26,497		53.4	%	-3.7	%
Noninterest income	25,075		6,030			8,418			315.8	%	197.9	%
Total revenue	50,584		22,662			34,915			123.2	%	44.9	%
Mark-to-market loss on derivative financial instruments	9,499		11,495			5,187			-17.4	%	83.1	%
Total core revenue	60,083		34,157			40,102			75.9	%	49.8	%

Noninterest expense	43,370		44,572			48,415			-2.7	%	-10.4	%
Non core noninterest expense	—		(3,700		)	(2,323		)	nm		nm
Total core expenses	43,370		40,872			46,092			6.1	%	-5.9	%

Core pretax income (loss)	16,713		(6,715		)	(5,990		)	348.9	%	379.0	%
Income tax provision	40		665			17			-94.0	%	135.3	%
Core net income (loss)	16,673		(7,380		)	$	(6,007	)	325.9	%	377.6	%

Core EPS	$	0.27	$	(0.12	)	$	(0.10	)	325.0	%	370.0	%

(1) NII for all periods includes the FASB 133 mark-to-market gain or loss on derivative financial instruments.

Total core revenue for the June 2006 quarter equaled $ 60.1 million, a 49.8% sequential increase from the March 2006 quarter; this increase resulted from a significantly higher net gain on sale of loans, offset by a slight decrease in net interest income.

Total core expense for the second quarter of 2006 decreased by 5.9% sequentially due to planned cost reductions, primarily in the wholesale loan origination channel.

Net Interest Income

The following table details the components of net interest income before the provision for loan losses for the quarters ended June 30, 2006 and 2005 and March 31, 2006.

	Quarter Ended									Percentage Change
(dollars in thousands)	6/30/2006			6/30/2005			3/31/2006			Y-Y		Sequential
Interest earned on:
Loans held for investment	$	63,701		$	59,261		$	71,178		7.5	%	-10.5	%
Loans held for sale	19,585			6,754			19,926			190.0	%	-1.7	%
Overnight investments	1,301			520			1,040			150.2	%	25.1	%
Income from derivative financial instruments	15,883			4,629			13,634			243.1	%	16.5	%
Amortization of net deferred loan origination costs	(1,180		)	(1,143		)	(1,318		)	3.2	%	-10.5	%
Prepayment penalty fees	6,767			4,856			7,515			39.4	%	-10.0	%
Other	55			66			70			-16.7	%	-21.4	%
Total interest income	106,112			74,943			112,045			41.6	%	-5.3	%

Interest expense	63,826			32,326			63,093			97.4	%	24.1	%
Mark-to-market loss on derivative financial instruments	9,499			11,495			5,187			-17.4	%	83.1	%
Amortization of financing costs	4,823			2,471			4,547			95.2	%	6.1	%
Other	119			154			120			-22.7	%	-0.8	%
Total interest expense	78,267			46,446			72,947			68.5	%	7.3	%

Net interest income (1)	27,845			28,497			39,098			-2.3	%	-28.8	%
Add mark-to-market loss on derivative financial instruments	9,499			11,495			5,187			-17.4	%	83.1	%
Core net interest income (1)	$	37,344		$	39,992		$	44,285		-6.6	%	-15.7	%

(1) Before the provision for losses on loans held for investment.

Core net interest income during the June 2006 quarter, which excludes the impact of the mark-to-market loss on derivative instruments, was $37.3 million, compared with $44.3 million during the March 2006 quarter. The decline was due primarily to a lower balance of loans held for investment, higher financing costs and the negative impact of a higher balance of non-accrual loans.

The provision for loan losses for the second quarter totaled $2.3 million, compared to $11.9 million in the prior year period. The decrease reflects both lower balance of loans held for investment as well as lower than anticipated losses in the held for investment portfolio.

During the second quarter of 2006, the average balance of loans held for investment decreased 3.7% from the March 31, 2006 balance, from $4.1 billion to $3.95 billion.

The table below provides the details of the components of net interest margin on the held for investment portfolio for the June 2006 and March 2006 quarters.

	Quarter Ended
	6/30/2006		3/31/2006

Gross yield on LHFI	7.00	%	7.22	%
Prepayment penalty fees	0.74	%	0.76	%
Amortization of premiums	-0.50	%	-0.53	%
Amortization of deferred loan fees and costs, net	-0.13	%	-0.13	%
Net yield on LHFI	7.11	%	7.32	%

Net cost of funding for LHFI	5.11	%	4.88	%

Net interest margin before servicing	2.00	%	2.44	%

Servicing costs	-0.50	%	-0.45	%

Net interest margin	1.50	%	1.99	%

Net charge-offs	-0.33	%	-0.27	%

REIT taxable income margin	1.17	%	1.72	%

LHFI = Loans held for investment

Noninterest Income

The following table details the components of noninterest income for the quarters ended June 30, 2006 and 2005 and March 31, 2006.

	Quarter Ended						Percentage Change
(dollars in thousands)	6/30/2006		6/30/2005		3/31/2006		Y-Y		Sequential
Noninterest income:
Gain on sale of loans	$	22,538	$	4,666	$	5,995	383.0	%	275.9	%
Loan servicing revenue	2,537		1,364		2,423		86.0	%	4.7	%
Total noninterest income	$	25,075	$	6,030	$	8,418	315.8	%	197.9	%

Total noninterest income for the June 2006 quarter increased by $16.7 million compared to the first quarter of 2006 due primarily to a higher volume of loans sold and higher net gain on sale of loans.

The following table details the components of the gain on sale of loans for the quarters ended June 30, 2006 and 2005 and March 31, 2006.

	Quarter Ended									Percentage Change
(dollars in thousands)	6/30/2006			6/30/2005			3/31/2006			Y-Y		Sequential
xGain on sale of loans:
Gain on whole loan sales	$	24,637		$	7,060		$	9,861		249.0	%	149.8	%
Loan originations fees, net	13,094			2,617			7,525			400.3	%	74.0	%
Provision for secondary market reserves	(15,095		)	(4,016		)	(11,255		)	275.9	%	34.1	%
Miscellaneous costs	(98		)	(995		)	(136		)	-90.2	%	-27.9	%
Total gain on sale of loans	$	22,538		$	4,666		$	5,995		383.0	%	275.9	%

Whole loan market sales	$	1,488,719		$	410,714		$	1,494,848
Gross gain on sale rate	1.65		%	1.72		%	0.66		%
Net gain on sale rate	1.51		%	1.14		%	0.40		%

The gross gain on sale of loans for the second quarter of 2006 equaled 1.65% of loans sold, as compared to 0.66% for the first quarter of 2006. The increase resulted from higher sale premiums generated by higher coupons on the loans originated during the quarter, as well as higher value first lien loans accounting for a higher percentage of total loan sales.

The net gain on sale ratio for the first quarter increased to 1.51%, compared with 0.40% for the first quarter of 2006. The higher net gain ratio resulted from higher points and fees earned on retail loans, which accounted for a substantially higher percentage of loans sold during the June 2006 quarter compared to the previous quarter.

Servicing revenue for the June 2006 quarter equaled $2.5 million, compared with $2.4 million in the March 2006 quarter.

Noninterest Expense

The following table details the components of noninterest expense for the quarters ended June 30, 2006 and 2005 and March 31, 2006.

	Quarter Ended								Percentage Change
(dollars in thousands)	6/30/2006		6/30/2005			3/31/2006			Y-Y		Sequential

Noninterest expense:
Personnel	$	21,570	$	20,980		$	24,891		2.8	%	-13.3	%
Production	9,079		8,577			9,377			5.9	%	-3.2	%
General and administrative	12,721		15,015			14,147			-15.3	%	-10.1	%
Total noninterest expense	43,370		44,572			48,415			-2.7	%	-10.4	%

Non-core income (expense)	—		(3,700		)	(2,323		)	nm		nm
Core noninterest expense	$	43,370	$	40,872		$	46,092		6.1	%	-5.9	%

Total core noninterest expense for the second quarter of 2006 decreased by approximately $2.7 million, or 5.9%, compared with the March 2006 quarter, reflecting lower operating expenses due to the previously mentioned expense reduction initiatives.

Net Cost to Originate

The net cost to originate loans is a non GAAP measurement of the Company’s efficiency trends within the meaning of Regulation G promulgated by the Securities and Exchange Commission. The data represents reported operating expenses, plus the origination costs deferred under SFAS No. 91 (Accounting for Nonrefundable Fees and Costs Associated with Origination or Acquiring Loans and Initial Direct Costs of Leases), less (i) the cost of servicing the Company’s loans held for investment portfolio, (ii) certain corporate overhead costs and (iii) the fees received on originations less points paid on wholesale originations. The Company believes that the non GAAP measurement of the net cost to originate is indicative of its ability to generate profits from the sale of its loans into the secondary markets and an indication of its overall efficiency.

The table below details the components of the net cost to originate loans for the quarters ended June 30, 2006 and 2005 and March 31, 2006.

	Quarter Ended									Percentage Change
(dollars in thousands)	6/30/2006			6/30/2005			3/31/2006			Y-Y		Sequential

Total noninterest expense	$	43,370		$	44,572		$	48,415		-2.7	%	-10.4	%
Non-core expense	—			(3,700		)	(2,323		)	nm		nm
Deferred loan origination costs	18,600			19,434			21,148			-4.3	%	-12.0	%
Loan servicing and other costs	(2,937		)	(2,274		)	(3,025		)	29.2	%	-2.9	%
Total expenses	59,033			58,032			64,215			1.7	%	-8.1	%

Loan origination fees received	(34,221		)	(20,901		)	(29,696		)	63.7	%	15.2	%
Net cost to originate	$	24,812		$	37,131		$	34,519		-33.2	%	-28.1	%

Total loan originations	$	1,195,270		$	1,597,014		$	1,565,524		-25.2	%	-23.7	%

Cost Ratios:
Total noninterest expense	3.63		%	2.56		%	2.94		%	41.8	%	23.2	%
Deferred loan origination costs	1.56		%	1.22		%	1.35		%	27.9	%	15.2	%
Loan servicing and other costs	-0.25		%	-0.14		%	-0.19		%	72.6	%	27.2	%
Total expenses	4.94		%	3.63		%	4.10		%	35.9	%	20.4	%
Loan origination fees received	-2.86		%	-1.31		%	-1.90		%	118.8	%	50.9	%

Net cost to originate	2.08		%	2.33		%	2.20		%	-10.7	%	-5.9	%

The net cost to originate for the June 2006 quarter equaled 2.08% of total loan production, a decrease of 12 basis points from 2.20% in the March 2006 quarter. Both the above mentioned reduction in core operating expenses as well as higher net points and fee earned on a higher volume of retail loans accounted for the decrease in the net cost to originate.

Loan Portfolio

Total loans held for investment as of June 30, 2006 equaled $3.4 billion, compared with $3.7 billion as of March 31, 2006. The Company also held $607.0 million of loans for sale as of June 30, 2006.

At the end of the second quarter of 2006, the Company’s leverage ratio, defined as total loans held for investment divided by total consolidated shareholders’ equity, equaled 12.9 times.

Loan Production

The following table details the Company’s loan production for the quarters ended June 2006 and 2005 and March 2006.

	Quarter Ended						Percentage Change
(dollars in thousands)	6/30/2006		6/30/2005		3/31/2006		Y-Y		Sequential

Retail	$	763,979	$	624,816	$	746,131	22.3	%	2.4	%
Wholesale	431,291		972,198		819,393		-55.6	%	-47.4	%
Total loan production	$	1,195,270	$	1,597,014	$	1,565,524	-25.2	%	-23.7	%

Loan production for the June 2006 quarter totaled $1.2 billion, $370.3 million, or 23.7%, lower than the first quarter of 2006. Compared with the prior year quarter, June 2006 production decreased by $401.7 million, or 25.2%.

Retail loan production increased by 2.4% sequentially and increased by 22.3% year over year. Retail production accounted for 63.9% of total production during the June 2006 quarter, compared with 47.7% for March 2006. Wholesale production accounted for 36.1% of total production for the second quarter of 2006, compared with 52.3% for the first quarter of 2006.

Credit Quality

The allowance for loan losses for the loans held for investment portfolio as of June 30, 2006 equaled $52.2 million, or 1.5%, of gross loans held for investment portfolio. The Company provided $2.3 million for loan losses during the second quarter of 2006, consistent with the Company’s current loan loss allocation model. Net charge-offs for the first half of 2006 have been substantially below the Company’s previous estimate and the Company believes that the current level of allowance and provisioning is sufficient to cover anticipated losses on the current held for investment portfolio.

Total delinquencies in the loans held for investment portfolio equaled 9.9% at the end of the second quarter of 2006, compared with 7.0% at the end of 2005. Net charge-offs for loans held for investments in the June 2006 quarter equaled $3.5 million, or an annualized 0.35% of the average held for investment portfolio.

About Aames Investment Corporation

Aames is a fifty-year old national mortgage banking company that originates subprime residential mortgage loans in 47 states through its retail channel under the name “Aames Home Loan.” To find out more about Aames, please visit www.aames.com.

Information Regarding Forward Looking Statements

This press release may contain forward-looking statements under federal securities laws. These statements are based on management’s current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The risks and uncertainties that may cause the Company’s performance and results to vary include: (i) limited cash flow to fund operations and dependence on short-term financing facilities; (ii) changes in overall economic conditions and interest rates; (iii) increased delinquency rates in the portfolio; (iv) intense competition in the mortgage lending industry; (v) adverse changes in the securitization and whole loan market for mortgage loans; (vi) declines in real estate values; (vii) an inability to originate subprime hybrid/adjustable mortgage loans; (viii) obligations to repurchase mortgage loans and indemnify investors; (ix) concentration of operations in California, Florida, New York and Texas; (x) the occurrence of natural disasters; (xi) extensive government regulation; and (xii) an inability to comply with the federal tax requirements applicable to REITs and effectively operate within limitations imposed on REITs by federal tax rules. For a more complete discussion of these risks and uncertainties and information relating to the Company, see the Form 10-K for the year ended December 31, 2005 and other filings with the SEC made by the Company. Aames Investment expressly disclaims any obligation to update or revise any forward-looking statements in this press release.

Further Information

For more information, contact the Aames Investment’s Investor Relations Department at (323) 210-5311 or at info@aamescorp.com

Financial tables and supplementary information follows.

AAMES INVESTMENT CORPORATION and SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands)

	June 30,		December 31,
	2006		2005
	(unaudited)
Assets

Cash and cash equivalents:
Unrestricted	$	50,017	$	36,078
Restricted	67,384		87,094
Loans held for sale, at lower of cost or market	607,037		951,177
Loans held for investment, net	3,398,074		4,085,536
Advances and other receivables	38,377		39,591
Prepaid expenses and other assets	87,372		70,012
Derivative financial instruments, at estimated fair value	42,927		58,147
Total assets	$	4,291,188	$	5,327,635

Liabilities and Stockholders’ Equity

Financings on loans held for investment	$	3,398,459	$	3,623,188
Revolving warehouse and repurchase facilities	578,908		1,341,683
Other borrowings	—		16,487
Other liabilities	50,017		76,773
Total liabilities	4,027,384		5,058,131
Stockholders’ equity	263,804		269,504
Total liabilities and stockholders’ equity	$	4,291,188	$	5,327,635

Shares outstanding	61,965		61,828

AAMES INVESTMENT CORPORATION and SUBSIDIARIES

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except per share data)

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2006		2005			2006			2005

Interest income	$	106,112	$	74,943		$	218,157		$	128,595
Interest expense	78,267		46,446			151,214			58,362
Net interest income	27,845		28,497			66,943			70,233
Provision for losses on loans held for investment	2,336		11,865			14,937			18,365
Net interest income after provision for loan losses	25,509		16,632			52,006			51,868

Noninterest income:
Gain on sale of loans	22,538		4,666			28,533			10,349
Loan servicing	2,537		1,364			4,960			2,404
Total noninterest income	25,075		6,030			33,493			12,753

Net interest income after provision for loan losses and noninterest income	50,584		22,662			85,499			64,621

Noninterest expense:
Personnel	21,570		20,980			46,461			43,327
Production	9,079		8,577			18,456			17,377
General and administrative	12,721		15,015			26,868			25,828
Total noninterest expense	43,370		44,572			91,785			86,532

Income (loss) before income taxes	7,214		(21,910		)	(6,286		)	(21,911		)
Income tax provision	40		665			57			1,430
Net income (loss)	$	7,174	$	(22,575	)	$	(6,343	)	$	(23,341	)

Net loss per common share:
Basic	$	0.11	$	(0.37	)	$	(0.10	)	$	(0.38	)
Diluted	$	0.11	$	(0.37	)	$	(0.10	)	$	(0.38	)

Weighted average number of common shares outstanding:
Basic	62,560		61,535			62,547			61,478
Diluted	62,560		61,535			62,547			61,478

AAMES INVESTMENT CORPORATION and SUBSIDIARIES

Other Financial Data

(Unaudited)

(In thousands)

	Six Months Ended
	June 30,
	2006			2005

Condensed Consolidated Statement of Cash Flows Information

Net cash provided by (used in):
Operating activities	$	354,245		$	119,705
Investing activities	670,359			(2,169,162		)
Financing activities	(1,030,375		)	2,134,829

Net increase (decrease) in cash and cash equivalents	(5,771		)	85,372
Cash and cash equivalents, beginning of period	123,172			37,780
Cash and cash equivalents, end of period	$	117,401		$	123,152

	June 30,			December 31,
	2006			2005

Revolving Warehouse and Repurchase Facilities

Committed facilities	$	2,500,000		$	2,700,000
Uncommitted facilities	100,000			100,000
Total warehouse and repurchase facilities	$	2,600,000		$	2,800,000

Amount utilized on committed	$	578,908		$	1,341,683

Borrowing capacity on committed	$	1,921,092		$	1,358,317

Liquidity

Unrestricted cash	$	50,017		$	36,078
Plus: Unencumbered loans held for sale	72,231			87,597
Less: Margin and ineligible mortgage collateral	(65,144		)	(80,962		)
Plus: Short-term collateralized financing facility	1,324			9,154
Plus: Revolving line of credit facility	25,000			—
	$	83,428		$	51,867

AAMES INVESTMENT CORPORATION and SUBSIDIARIES

Loan Production Information

(Unaudited)

	Three Months Ended									Six Months Ended
	June 30,						March 31,			June 30,
Loan Production	2006			2005			2006			2006			2005

Retail

Total dollar amount (in thousands)	$	763,979		$	624,816		$	746,131		$	1,510,110		$	1,141,374
Number of loans	5,026			4,315			4,814			9,840			8,033
Average loan amount	$	152,005		$	144,801		$	154,992		$	153,466		$	142,086
Average initial LTV	74.78		%	76.33		%	74.44		%	74.61		%	76.12		%
Weighted average interest rate	8.69		%	7.37		%	8.13		%	8.41		%	7.44		%

Wholesale

Total dollar amount (in thousands)	$	431,291		$	972,198		$	819,393		$	1,250,684		$	1,817,256
Number of loans	3,141			6,830			5,702			8,843			12,858
Average loan amount	$	137,310		$	142,342		$	143,703		$	141,432		$	141,333
Average initial LTV	80.98		%	80.38		%	82.06		%	81.69		%	80.79		%
Weighted average interest rate	8.77		%	7.66		%	8.63		%	8.68		%	7.63		%

Total

Total dollar amount (in thousands)	$	1,195,270		$	1,597,014		$	1,565,524		$	2,760,794		$	2,958,630
Number of loans	8,167			11,145			10,516			18,683			20,891
Average loan amount	$	146,354		$	143,294		$	148,871		$	147,770		$	141,622
Average initial LTV	77.02		%	78.79		%	78.43		%	77.82		%	78.98		%
Weighted average interest rate	8.72		%	7.55		%	8.39		%	8.53		%	7.56		%

AAMES INVESTMENT CORPORATION and SUBSIDIARIES

Loan Production Information

(Unaudited)

(In thousands)

	Three Months Ended						Six Months Ended
	June 30,				March 31,		June 30,
Loan Production	2006		2005		2006		2006		2005

By Loan Purpose

Cash-out refinance	$	790,093	$	900,379	$	950,589	$	1,740,682	$	1,699,747
Purchase money	344,458		645,301		559,527		903,985		1,164,929
Rate/term refinance	60,719		51,334		55,408		116,127		93,954
	$	1,195,270	$	1,597,014	$	1,565,524	$	2,760,794	$	2,958,630

By Property Type

Single-family	$	1,064,357	$	1,399,906	$	1,359,045	$	2,423,402	$	2,594,833
Multi-family	64,715		114,499		106,542		171,257		208,898
Condominiums	66,198		82,609		99,937		166,135		154,899
	$	1,195,270	$	1,597,014	$	1,565,524	$	2,760,794	$	2,958,630

By State/Region Produced

California	$	215,895	$	439,308	$	322,733	$	538,628	$	812,230
Florida	313,855		372,851		424,039		737,894		669,702
New York	109,071		94,357		121,819		230,890		187,915
Texas	120,378		136,411		130,170		250,548		247,803
Other Western states	113,108		128,581		133,245		246,353		267,872
Other Midwestern states	65,684		101,325		84,691		150,375		196,551
Other Northeastern states	164,407		177,435		199,534		363,941		323,288
Other Southeastern states	92,872		146,746		149,293		242,165		253,269
	$	1,195,270	$	1,597,014	$	1,565,524	$	2,760,794	$	2,958,630

By Loan Product

Hybrid:
Traditional	$	459,747	$	976,427	$	688,062	$	1,147,809	$	1,923,946
Interest Only	11,947		190,110		30,131		42,078		338,918
40/30	489,974		38,190		540,549		1,030,523		38,190
	961,668		1,204,727		1,258,742		2,220,410		2,301,054
Fixed Rate:
Traditional	216,924		392,287		279,316		496,240		657,576
40/30	16,678		—		27,466		44,144		—
	233,602		392,287		306,782		540,384		657,576

	$	1,195,270	$	1,597,014	$	1,565,524	$	2,760,794	$	2,958,630

AAMES INVESTMENT CORPORATION and SUBSIDIARIES
Loan Servicing Information
(Unaudited)
(Dollars in thousands)

	June 30,		December 31,
	2006		2005

Servicing Portfolio

Mortgage loans serviced:
Loans held for investment	$3,425,581		$4,077,448
Loans serviced on an interim basis	1,433,887		1,926,876
Loan subserviced for others on a long-term basis	79,094		92,213
Total serviced in-house	4,938,562		6,096,537

Loans held for investment subserviced by others	48,151		50,202
Total servicing portfolio	$4,986,713		$6,146,739

Percentage serviced in-house	99.0	%	99.2	%

Loan Delinquencies

Percentage of dollar amount of delinquent loans serviced (period end):
One month	2.8	%	1.9	%
Two months	0.8	%	0.9	%
Three or more months:
Not foreclosed	4.0	%	2.5	%
Foreclosed	0.6	%	0.1	%
	8.2	%	5.4	%

Percentage of dollar amount of delinquent loans in:
Loans held for investment	9.9	%	7.0	%
Loans serviced on an interim basis	4.5	%	2.0	%
Loans subserviced for others on a long-term basis	8.7	%	8.9	%

AAMES INVESTMENT CORPORATION and SUBSIDIARIES
Loan Servicing Information
(Unaudited)
(Dollars in thousands)

	Six Months Ended
	June 30,
	2006			2005

Loan Foreclosures

Percentage of dollar amount of loans foreclosed during the period to servicing portfolio (period end)
Number of loans foreclosed during the period	214			83
Principal amount of loans foreclosed during the period	$	30,064		$	6,284
Number of loans liquidated during the period	156			151

Net losses on liquidations during the period from:
Loans held for investment	$	3,028		$	42
Loans serviced on an interim basis	2,737			2,646
Loans subserviced for others on a long-term basis	—			19
Loans in off-balance sheet securitization trusts serviced in-house	—			2,850
	$	5,765		$	5,557

Percentage of annualized losses to
servicing portfolio	0.2		%	0.2		%
Servicing portfolio at period end	$	4,987,000		$	4,482,000

1-32340		34-1981408
(commission File Number)		(IRS employer identification no.)

	AAMES INVESTMENT CORPORATION

	By:	/s/John F. Madden, Jr.
		John F. Madden, Jr.
		Executive Vice President General Counsel
		and Secretary

		Dated: August 10, 2006