Mortgage brokers work with lenders in the wholesale marketplace and pass on these rates and costs to their customers. Further, mortgage brokers’ compensation is legislated to not exceed 3% of the amount financed, including the wholesale lender’s fees, and is disclosed on every transaction. Mortgage banks, and banks, do not have this restriction. They can make as much as they want on any loan and do not have to disclose it. Why does this matter? Because the higher the rate, the more the lender makes. Thus, they can charge higher rates than mortgage brokers, as their compensation is not legislatively limited.