The embattled New York Community Bancorp reported another tough quarter Thursday and said it plans to sell its residential mortgage servicing business to Mr. Cooper for roughly $1.4 billion.

The parent company of Flagstar Bank — which has suffered a steep decline in its stock price this year amid troubles with commercial real estate loans, deficiencies in internal controls and a flurry of leadership changes — reported a net loss of $323 million, or $1.14 per share, for the second quarter. 

That's far below the net loss of 40 cents per share predicted by analysts surveyed by FactSet Research Systems. It follows a $327 million net loss in the first quarter.

One factor in the latest results: New York Community's provision for credit losses rose to $390 million, up from the $315 million it recorded in the first quarter. In May, executives warned that provisions would be elevated this year, forecasting a range of $750 million to $800 million.

The company updated that guidance Thursday, calling for provisions of $900 million to $1 billion.

New York Community also announced that it will "simplify its business model" by selling its residential mortgage servicing business to Mr. Cooper, a non-bank mortgage originator and servicer. The deal is expected to be finalized during the fourth quarter of this year.

"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, along with increased regulatory oversight for such businesses," New York Community CEO Joseph Otting said in a press release.