Best Answer: the first answer is ridicules.
the high cost loan limit, section 32, will not allow a loan officer to charge fees and points in excess of 5%, which is really high number, and is almost never done. (there are a few exceptions to this rule where you can charge more, but those are extremely rare).
on average an LO will charge 1-3% after expenses and commission split, the check cut to the LO is something less than that.
all of the fees that you pay in your refi are broken down on the HUD-1 settlement form and to whom they are paid, most go to third parties like bank that holds your note, appraisers, title companies, government agencies. etc.
the bottom line is you can either have the bank pay the broker in the form of YSP or you can pay the broker in the form of points or some combination of
So why do you want to you me 1-3%, I can't speak for all brokers out there (b/c there are always bad apples in the bunch. and it just so happens they get the most attention).
the answer is simple, I get wholesale rate's from 100's of banks, where if you were to walk into the same bank off the street they would give you a higher rate then they would give me. I split the difference with you so that you still end up with a better rate or less fee and/or some tangible monetary benefit and accept a small fee for my services. everybody wins. Even in those rare instances where another bank can beat me, I'll tell you. hey that's a great deal run with it. and it still costs you nothing.
so if you've got a good, honest broker on your side you'll always win.
Source(s): broker 15 yrs