Subprime mortgages may have wreaked havoc on the U.S. economy over the past decade, but they have been very good to Tom Marano.

At Bear Stearns Cos., he gained fame in the industry and no small fortune leading the team that bundled billions of dollars of subprime home loans into securities. The historic implosion of those low-quality, risky bonds brought down Bear and helped fuel the worst financial crisis since the Great Depression.

Yet it’s done little to hinder his career or earning potential. He has, in fact, leveraged his extensive mortgage background and relationships into a lucrative second act. He cleans up and sells troubled mortgage companies that had suffered in the housing crash.

In his latest role, which closed last month, Marano guided home loan servicer Ditech Holding Corp. through bankruptcy and sale. The buyer of most of its assets was a firm run by a former Bear Stearns colleague. Before that, Marano oversaw a similar Chapter 11 bankruptcy for Residential Capital LLC, known as ResCap. Ironically, pieces of the loans that his group securitized at Bear ended up at both ResCap and Ditech.

Marano’s career and connections show how even a decade after a crash that left millions jobless and evicted from their homes, the same bankers who created pools of risky loans continue to benefit. Critics chafe at the unfairness, while others say people like Marano are well-suited to play fix-it roles given their expertise.

“It’s like somebody who works at a nuclear power plant and causes a disaster and then works on the cleanup,” said Jared Ellias, a professor of bankruptcy law at the University of California Hastings. “It may feel a little bit morally ambiguous, but in truth it’s just capitalism. People who have specific skill sets will get hired to use them.”

Protecting Consumers
In an interview and over email, the 58-year-old Marano said it’s not surprising that he’s been brought in to restructure mortgage firms.

“I’ve got some pretty good experience defusing these overleveraged financial companies,” he said.

Marano said the financial crisis was the result of systemic failures while acknowledging some “slippage in industry standards” by bundling loans to home buyers with low credit ratings.

“I have always put doing right by the customer first,” he said. “At every place I worked, from Bear to ResCap to Ditech, I put in place policies and and practices to strengthen standards and protect consumers to help them keep their homes.”

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