April 23 (Bloomberg) -- Thomas Marano, the former mortgage chief at Bear Stearns Cos., joined Residential Capital LLC as non-executive chairman after writedowns eroded capital at the biggest privately held U.S. home lender.

Marano, the ex-head of mortgage and asset-backed securities at Bear Stearns, succeeds Michael Rossi, who resigned from ResCap's board last month, the company said today in a statement. Marano, 46, was assigned last year to help unwind two Bear Stearns hedge funds that collapsed because of losses on bonds linked to subprime home loans. Joshua Weintraub, one of his former deputies, also joined the ResCap board.

Investors have speculated that ResCap, a unit of Detroit- based GMAC LCC, may join the list of at least 100 mortgage companies that have stopped lending, sought buyers or shut down as housing sales slumped and the value of mortgage-backed assets collapsed. GMAC lost $2.3 billion last year and credit analysts have said continued support for ResCap may damage the financial health of the parent company.

Marano and Weintraub have a ``long history'' in mortgage markets and ``they'll bring something, but there's not much you can do if you can't issue securities,'' said Mirko Mikelic, who helps manage $22 billion as a portfolio manager at Fifth Third Asset Management in Grad Rapids, Michigan. ResCap would have to pay a ``huge coupon'' to lure bond buyers, making it too expensive for the company to raise cash in the capital markets.

``There's very few people who can help out ResCap,'' Mikelic said. ``What they need is somebody who can write a check.''

Cerberus Role

Cerberus Capital Management LLC, the private equity fund that owns a majority stake in GMAC, was ``instrumental'' in recruiting Marano and Weintraub, ResCap spokeswoman Toni Simonetti said today. The two men will also be employed by Cerberus, she said. Weintraub, 38, was Bear Stearns's senior director of global mortgage operations.

``They're very well-versed in the mortgage business,'' Simonetti said. ``We're happy to have them.''

The collapse of the two Bear Stearns hedge funds Marano worked to unwind helped spark a broader contraction in credit markets, as investors shunned other forms of high risk, high- yield debt. The funds filed for bankruptcy protection in July.

For Bear Stearns, the hedge fund crisis ultimately contributed to the failure of the entire company. It was forced to accept a takeover by JPMorgan Chase & Co. last month after concern that the securities firm faced a cash shortage caused lenders and customers to flee.

GMAC'S Prospects

JPMorgan Chief Executive Officer Jamie Dimon is trying to retain top talent at Bear Stearns by offering cash and stock bonuses to the best performers at the company, which got half its revenue from fixed-income units and was once the biggest U.S. underwriter of mortgage-backed securities.

GMAC's profitability this year depends on strengthening of demand for securities backed by home loans, Chief Executive Officer Alvaro de Molina said in a March 18 interview. As prices for those securities decline, GMAC must write down their value, which pressures the company's earnings, he said.

General Motors Corp. sold 51 percent of GMAC, its auto and home lending unit, to a group led by New York-based Cerberus in 2006. GM later injected $1 billion into GMAC to make up for previous writedowns of mortgage assets at ResCap. GMAC in the third quarter of 2007 infused $1 billion more into ResCap.

To contact the reporter on this story: Linda Shen in New York at lshen21@bloomberg.net

Last Updated: April 23, 2008 13:16 EDT