The German bank West LB will gain a foothold in the U.K. mortgage market via its newly established U.K. subsidiary, Basinghall Finance PLC.

Basinghall Finance will offer new mortgages and buy packages of existing home loans from banks and building societies. It plans to package many of the loans it buys into securitizations, which will fund future mortgage investments.

Home Funding deal

Basinghall Finance has entered into a joint venture with Home Funding Ltd.

Home Funding will carry out all day-to-day management of Basinghall, including the establishment of distribution partners and product design.

"Basinghall has outsourced all aspects of its business to us," said Tony Ward, chief executive of Home Funding.

West LB owns a significant minority stake in Home Funding.

Ward said though mortgage origination has not yet started on the Basinghall platform, he expected business to be well under way by the second half of this year.

"We are likely to securitize sooner rather than later as part of our funding strategy," Ward said.

Basinghall initially plans to look at both prime and nonconforming mortgages and eventually plans to add commercial mortgages to its portfolio mix.

"West LB Capital Markets is excited to be able to extend its activities in the mortgage market from the provision of warehousing, securitization financing and capital markets to a more pro-active involvement through Basinghall, and believes that it will be able to add more value to its current clients as well as to establish new mortgage origination channels," said Simon Wood of West LB.

Ian Darby, who was previously commercial director on the board of directors at Bradford and Bingley Group PLC, was appointed chairman of the new joint venture.

(c) 2006 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved.

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