Bear Stearns Cos. assigned its top mortgage trader to help manage the $1.6 billion bailout of a money-losing hedge fund as it tries to unwind bets on investments tied to home loans.

The global head of mortgages and asset-backed securities, Thomas Marano, 45, was appointed after Bear Stearns agreed to provide financing to its High-Grade Structured Credit Strategies Fund, said a person with knowledge of the decision. Bear Stearns, the fifth-biggest American securities firm, said in a statement Tuesday that it won’t rescue a second fund, which borrowed more and sustained bigger losses.

Pulling Mr. Marano away from one of Bear Stearns’s biggest businesses shows how high the stakes are for the chief executive officer, James “Jimmy” Cayne. Mr. Marano will be working on a temporary basis with the head of Bear Stearns Asset Management, Richard Marin, and the overseerer the funds, Ralph Cioffi, said the source, who declined to be identified because the decision hasn’t been made public.

“They’re probably doing whatever is necessary to protect the $1.6 billion,” a manager of $600 million at Chicago Asset Management and holder of Bear Stearns shares, Peter Goldman, said.

A Bear Stearns executive who was the firm’s chief risk officer in the 1990s, Michael Winchell, will help Mr. Marano to sell off the fund assets, a person familiar with that appointment said. Mr. Winchell is the chief operating officer of Bear Wagner Specialists LLC, the firm’s market-making unit on the floor of the New York Stock Exchange.

Bear Stearns spokeswoman Elizabeth Ventura declined to comment.