Lehman Brothers helps belligerent UK home loans

Lehman Brothers’ have a survival plan to sell $4 billion British mortgages, this comes as an aggressive bet on high risk UK mortgages in the last three years on UK mortgages have misfired.

Investment firm BlackRock Inc. are set to buy the UK mortgages off of Lehman as part of a far-reaching restructuring to aid the survival of the credit crunch in the way of raising capital that is in desperate need, it was reported on Wednesday.

Lehman Brothers’ back in 2006 and the beginning of 2007 led a group of investment banks who grew from securitising mortgages to offering their own UK mortgages during the UK housing boom.

This was done by originating their own mortgages that could then offer a constant stream of loans that could then be packaged into bonds then issued and traded, generally they entered partnerships and took on loans from banks such as Northern Rock and Alliance & Leicester typically targeting non-con-conforming mortgages that other mainstream lenders tried to stay away from.

Read full story at Reuters.

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