Well, that's how many points you're getting charged in the back-end that you can't see because those points that you're paying are the reason why your interest rate is higher. Also, we can't charge processing and underwriting fee as a mortgage broker, and the mortgage bankers can. But wait, the mortgage banker says one more thing. "Well, they don't have their underwriters in-house, and they're not going to close on time." Well, let me explain how in-house underwriters work. If you're the owner of a mortgage banker, the last thing you'll do is have the underwriter sitting next to the loan officer.
If an underwriter makes a credit decision based on the loan officer's influence versus actually the documents and what they say and what a credit decision should be based on when that mortgage banker sells the loan to the Federal Housing Administration or FHA or VA. They come back, and they say, "Hey, you didn't get this document, and it looks like you didn't document it well enough about the job gap. We can't buy this loan from you." Now you own this $400,000 loan, this $300,000 loan. That's a $400,000 loss in one day on one loan, so if you're the mortgage banker, you will go ahead and separate them.
After that, who will you go with, the mortgage lender that charges more fees, makes more on the back-end, has one underwriting department that they can sell to, or do you want to go with a mortgage broker? Has various options of lenders, no fees upfront, and you can see how much compensation they're making in the back-end, which results in you getting a lower interest rate. Don't know about you, but I am probably going to go for the cheaper option, and I'm probably going to go with the option of the mortgage broker because where a mortgage banker can only go to one underwriting department, the mortgage broker has access to multiple lenders.
