(Reuters) -New York Community Bancorp ( NYCB/PA ) unit, Flagstar Bank, has agreed to sell its residential mortgage servicing business for $1.4 billion as it looks to boost capital and sharpen focus on its core businesses.

The deal will allow the lender, which has been under pressure due to its exposure to commercial real estate loans, to exit a business highly sensitive to interest-rate changes.

"While the mortgage servicing business has made significant contributions to the bank, we also recognize the inherent financial and operational risk in a volatile interest rate environment," NYCB CEO Joseph Otting said.

Non-bank mortgage platform Mr Coop will buy the business. The deal is expected to close in the fourth quarter.

Shares fell 7% in premarket trading after the lender lowered its 2025 profit forecast to up to 5 cents per share compared with a prior view of 35 cents to 40 cents.

The bank posted a loss of $333 million, or $1.14 per share, in the three months ended June 30, compared with a profit of $405 million, or $1.66 per share, last year.

(Reporting by Niket Nishant in Bengaluru; Editing by Arun Koyyur)