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Switzerland’s property market is at greater risk of overheating, raising the question as to whether authorities have done enough to curtail the boom.

The UBS Swiss Real Estate Bubble Index rose to 1.23 points in the fourth quarter from 1.2 points in the third, according to a statement from UBS AG (UBSN) today. A reading above 2 indicates a bubble.

“The potential for correction has increased further,”Matthias Holzhey and Claudio Saputelli at UBS in Zurich said.

The Swiss National Bank (SNBN)’s policy of zero rates, in place since August 2011, has kept down the cost of taking out a mortgage. Coupled with high immigration from neighboring European countries that has fueled a strong increase in real estate prices in Switzerland.

Growth in mortgages has exceeded that of economic output since 2009, and last year price gains of homes and apartments outstripped advances in incomes, according to the central bank.

Concerned Switzerland could fall victim to a real estate crisis similar to that of the 1990s, the government last year forced banks to build up a countercyclical buffer of 1 percent of mortgage-related assets. After that failed to prevent a further deterioration of the mortgage market, it last month doubled the requirement to 2 percent. Even so, it refrained from raising it to the maximum 2.5 percent. Banks have until June 30 to comply.

http://www.bloomberg.com/news/2014-02-05/swiss-housing-market-bubble-looms-closer-ubs-says.html

US banks under pressure to step up new mortgage business | Waccabuc NY Homes

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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.

http://www.ft.com/intl/cms/s/0/ef5d1b9e-8377-11e3-86c9-00144feab7de.html#axzz2sIQ3eQmw