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The Federal Reserve has finalized its rules banning lender-paid bonuses for mortgage brokers and loan officers who get borrowers to accept a higher interest rate than necessary.

These bonuses sometimes are called rebates, or referred to by the technical term yield spread premiums. Brokers can use them to cover borrowers’ closing costs, so a homeowner wanting a no-cost refinance might accept a higher interest rate to accomplish that.

Critics said the rebates were little more than kickbacks for higher-cost loans that were worth more when they were traded in the secondary market or sat on lenders’ own books. They said loan officers and mortgage brokers often steered borrowers into costlier loans without disclosing that they made more money for doing so — and kept the rebates.

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