NEW YORK (AP) -- A bankruptcy court has approved a joint $3 billion buyout bid from Ocwen Loan Servicing and Walter Investment Management for Residential Capital.

The court also approved the sale of ResCap's portfolio of about 50,000 loans to Berkshire Hathaway Inc. for $1.5 billion.

Residential Capital, also known as ResCap, is a subsidiary of Ally Financial, the former auto lending arm of General Motors.

ResCap filed for bankruptcy protection in May after being hobbled by payments on debt taken out to finance soured home mortgages.

The sale is expected to close in the first quarter of 2013.

Ally now operates mainly as an automotive lender and bank.

It's trying to sell off non-core and overseas assets in an effort to generate cash to pay back its government loans and reshape its operations.

AP-WF-11-21-12 1615GMT