Our bank is looking at correspondent lending where we would purchase individual loans from another bank. The other bank would be underwriting the loan, closing, and funding it; however, we would review the loan before closing to determine whether we will purchase it. Do the premiums we pay the other bank have to be included in the points and fees (they will know the amount of the premium when they lock the rate)?

I am not a board Guru, but we have lots of secondary market experience and can share our perspective. If your transaction is classified as a secondary market transaction, the premium is not part of points and fees. If the other bank is funding the loan and closing in their name, then selling it to you (with assignment through MERS or paper), then it generally can be classified as a secondary market transaction and you would exclude the premium.