NYCB’s Flagstar to Sell Mortgage-Servicing Unit for $1.4 Billion

New York Community Bancorp’s Flagstar Bank unit agreed to sell its residential mortgage-servicing business to Mr. Cooper Group Inc. for about $1.4 billion.

The transaction, which is expected to be completed in the fourth quarter, will add about 60 basis points to the company’s common equity tier 1 capital ratio, Flagstar said in a statementThursday.

NYCB Chief Executive Officer Joseph Otting is overhauling the company’s balance sheet, as concerns about its outsized exposure to commercial real estate in New York weighed down the stock earlier this year. Otting said that while the mortgage-servicing business has made significant contributions ...