Prudential Insurance Co. is leaving the mortgage business and has put its giant home lending unit - the country’s third-largest mortgage company - on the sales block, the insurer said Wednesday.
Dogged by a sharp drop in residential lending, losses in its trouble-ridden securities unit and huge claims related to the 1994 California earthquake, Prudential is exiting the mortgage business to raise capital and focus on its core insurance and investment businesses.
The company’s Residential Services Corp. of America “is a very good business, but we believe the Prudential needs to better focus its resources at this time,” said Arthur F. Ryan, the former Chase Manhattan Corp. president who was named chairman of Prudential in December.
The decision is Ryan’s first move to steady the ailing insurer, whose capital base plunged by $1.2 billion last year to $9.5 billion.
The mortgage business could fetch more than $1 billion.