... In Temple doctrine, one ancient tradition holds that, among his many other crimes, Molag Bal, the Father of Monsters, spawned the first vampire upon the corpse of a defeated foe. Several different versions of this story exist, with the foe variously identified as a Daedra Lord, a Temple Saint, or a powerful beast creature. This account of the origin of vampirism is peculiar to Morrowind, appearing nowhere else in Imperial lore. Unfortunately, scholarly inquiry upon this topic is discouraged by the Temple, which controls access to the only substantial collection of historical and cultural records in Morrowind.... - Vampires of Vvardenfell
Considering Molag Ball [censored] somebody, or something and turning it into a vampire seems to be the common story, the Lamae Bal is presumably just another variant on the theme.
Vampires them self however appear to be more related to Vearnima, mother of Nightmares.