(Bloomberg News) MetLife Inc. agreed to sell the mortgage-servicing business of its bank to JPMorgan Chase & Co., as the biggest U.S. life insurer works to reduce oversight from federal regulators.

The deal will help JPMorgan, the biggest U.S. bank by assets, increase its servicing business by more than 5 percent, according to a statement issued yesterday. Terms of the transaction for the portfolio of about $70 billion weren't disclosed, New York-based MetLife said.

MetLife Chief Executive Officer Steven Kandarian, 60, is seeking to end the insurer's status as a bank-holding company to limit Federal Reserve oversight that's blocked the insurer from raising its dividend or repurchasing shares. The firm has reached deals to sell its reverse-mortgage portfolio and most of its U.S. bank deposits.

"Given MetLife's strategic focus as a global insurance and employee-benefits leader, the company decided in 2011 that a bank holding company structure was no longer appropriate," MetLife said in the statement.

JPMorgan, led by CEO Jamie Dimon, adds a pool of borrowers whose loans it can service and offer to refinance, boosting fees. The New York-based lender is the third-largest mortgage servicer, after Wells Fargo & Co. and Bank of America Corp., according to data compiled by Bloomberg from Inside Mortgage Finance.

"We will be able to provide our full range of products and services to an additional 350,000 individuals and families," Eric Schuppenhauer, head of mortgage servicing at JPMorgan, said in the statement. "We expect that many of these customers will take advantage of historically low interest rates by refinancing."

Opportunity Seen

Expanding in mortgage servicing is a "once-in-a-lifetime" opportunity as some firms scale back, U.S. Bancorp CEO Richard Davis said earlier this year.

Ocwen Financial Corp. is among firms adding home loans by acquisitions. It won a $3 billion auction for Residential Capital LLC.'s mortgage-servicing unit last month, outbidding Nationstar Mortgage Holdings Inc. Ocwen also agreed to buy Homeward Residential Holdings Inc. from Wilbur Ross's WL Ross & Co. last month.

Servicers collect payments from borrowers and pass them on to mortgage lenders or investors, minus fees. They also handle foreclosures when borrowers don't pay.

MetLife agreed to sell its reverse-mortgage portfolio to Nationstar in April. The insurer reached a deal to sell about $7.5 billion of deposits to a unit of General Electric Co.

Seeking Approval

Kandarian has been unable to win approval for the deposit sale as quickly as he'd planned, preventing him from ending the firm's bank status. MetLife and Fairfield, Connecticut-based GE amended the deal in September so that Federal Deposit Insurance Corp. approval was no longer required.

MetLife faces a January deadline to submit a new capital plan to the Fed. The insurer may be regulated as a non-bank systemically important financial institution after it exits bank status, Kandarian said on a conference call Nov. 1.

"Until we have clarification on the future as a bank, the future being a non-bank or de-banking, and the future as a non- bank SIFI, as well as what the rules would be under that, we can't give any guidance on capital," MetLife Chief Financial Officer John Hele said on the call.

MetLife was advised on the deal by K&L Gates LLP, Milestone Advisors LLC and Deutsche Bank AG., according to the statement. Amy Bonitatibus, a JPMorgan spokeswoman, said the bank didn't use outside advisers.