NEW YORK(Bloomberg) — Bear Stearns, the second-biggest US underwriter of mortgage bonds, is liquidating holdings from one of its hedge funds after making money-losing bets on subprime mortgage bonds, said three people with knowledge of the decision.Bear Stearns is seeking bids today from prospective buyers for about $3.8 billion of mortgage securities, said the people, who declined to be identified because the plan isn't public. The 10-month-old Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Fund, which is down about 20 percent this year, had about $600 million of investors' money and borrowed to increase its buying power, one of the people said.

As delinquencies rise on loans made to homebuyers with poor credit or heavy debt loads, bondholders stand to lose as much as $75 billion on securities backed by the mortgages, according to an estimate in April from Pacific Investment Management, manager of the world's largest bond fund. Bear Stearns's fund is among the first to start liquidating because of the subprime crisis, which already has forced lenders such as New Century Financial and ResMae Mortgage into bankruptcy.

Investors "may also call into question" the asset values of other hedge funds, depending on how much Bear Stearns gets in the auction, said Josh Rosner, managing director at New York- based investment-research firm Graham Fisher & Co.

Russell Sherman, a spokesman for New York-based Bear Stearns, declined to comment.