A dispute with a third party over the value of Prudential Home Mortgage Co.'s portfolio of servicing rights on large mortgages shot down its negotiations with First Union Mortgage for the sale of the portfolio and other assets.

Details of the negotiations provide an unusual insight into the intricacies of such deals - and the collapse also underscores a basic problem in the mortgage industry.

Limited Time Offer

Save $400 off your subscription. Special offer ends April 30, 2017.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.