By Rick Rothacker and Jochelle Mendonca
Nov 21 (Reuters) - A U.S. bankruptcy court judge on
Wednesday approved the sale of Residential Capital LLC's
mortgage business to Ocwen Financial Corp and Walter Investment
Management Corp, which agreed to pay $3 billion in an auction
ResCap, the mortgage subsidiary of auto lender Ally
Financial, filed for bankruptcy in May in a bid to protect its
parent from mortgage liabilities that threatened to swamp the
company. Ally is 74 percent-owned by the U.S. government after a
series of bailouts.
U.S. Judge Martin Glenn also approved the sale of a ResCap
loan portfolio to Warren Buffett's Berkshire Hathaway Inc, which
agreed to pay $1.5 billion last month for a package of 50,000
ResCap said the sale is expected to close in the first
Ally, the former finance arm of General Motors Co and once
known as GMAC, is trying to refocus its business on U.S. auto
lending and banking. In May, it announced plans to sell its
international operations in an effort to speed up repayment to
Earlier this month, sources familiar with the matter said
Ally was nearing a deal to sell its auto financing operations in
Europe and Latin America for around $4 billion, with GM emerging
as the lead bidder.
Last month, Detroit-based Ally agreed to sell its Canadian
auto finance and deposit business to Royal Bank of Canada for
$4.1 billion, and its Mexican insurance unit to ACE Ltd for $865
Ally received $17 billion in bailouts from the U.S.
government during the financial crisis. Including dividend
payments, it has paid back $5.8 billion.
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