Pressure is mounting at the mortgage banking divisions of  the biggest US  banks.

As refinancing activity has plummeted, banks are trying to step up their new  home loan books, in an attempt to offset the dramatic revenue drag on overall  bank earnings. There are few easy ways to boost new purchase originations, but  one of the starkest battles is playing out in the bidding war for hotshot  mortgage loan officers.

“People are fighting over a smaller pie,” said Franklin  Codel, head of mortgage production at Wells Fargo, the biggest US home lender. “The  competition for quality loan officers is very high.”

Up to now, the focus has been on thousands  of job cuts in the mortgage divisions of US banks – many of which came in  the refinancing call centres as higher interest rates deterred borrowers from  refinancing their mortgages.

But as credit quality improves the banks have begun vying for a slice of the  new purchase market and have started an intense competition for experienced  mortgage bankers with existing client relationships.

The role of government-backed entities such as Fannie Mae and Freddie Mac means that US banks tend to offer  similar mortgage products so it is harder for them to stand out in this area  than in credit cards, where their benefits packages differ.

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