Great question. Due to the Frank-Dodd financial reform act enacted last year all mortgage originators (brokers, bankers & retail LO's form the big banks) are required to charge all borrowers the same fee (or percentage) for the rate offered. That means if you charge one customer 2 points to do the loan you have to charge 2 points to everyone you do business with. We are required by federal regulations to charge everyone the same fees, and points. In essence they have taken away our ability to reduce our commission to earn your business.
As a banker he is not able to extend a broker credit since he is not a broker. Now that being said he would be able to extend a credit to the borrower if there was additional rebate on the loan. For example, I charge 1 point for all loans, so if the investor we lock your loan with is giving a rebate of 1.25% for a given rate I still only make 1 point, and we give the extra rebate to the borrower for a closing cost credit. There is no benefit to keeping the extra .25% as the Loan officer does not make more money anymore.
As a borrower you always have the opportunity to do a 0 points loan or pay points if you choose. We typically disclose with a 1 point fee for origination due to the fact that if the borrower wanted to pay points to buy down the rate when locking the loan we would be required to cancel the loan and start over had we not disclosed points up front.
It seems strange that a mortgage banker (as we are too) would disclose with 2% loan origiation charge unless that is what he makes on every loan; which very likely could be the case so he would not have to cancel the loan should the buyer want to buy down the rate when they do actually lock. The lender that charges 0 points could also have to cancel & start over if you decided you wanted to pay points when you lock.
My guess is that one lender charges everyone 2 points for every loan he/she does, and the other lender does not.
Just out of curiosity, was the rate the same for both GFE's?
Hope this helps...
