A new federal regulation that restricts how loan officers are compensated might result in higher costs for borrowers.

So far, no one knows exactly how the rule, effective April 1, will play out, but one result could be fewer choices of interest rate and fee combinations, suggests Reggie Green, a loan officer at Firstline Mortgage/Crossline Capital in Chandler, Ariz.

"You're going to see two options," Green says. "Pay all the loan officer's compensation upfront or take a higher rate and the loan officer gets totally paid through the rate."

The rule "is already sounding like it's a shell game," says Gary Parkes, a loan officer at Acopia Home Loans in Woodstock, Ga.

Parkes thinks the rule could be especially problematic for smaller loan amounts because the loan officer won't earn enough to justify the time involved.

"The numbers are just not going to really work," he says.

Loan officers are virtually unanimous in their opposition to the rule, so much so that two trade organizations have sued the Federal Reserve to try to stop it from taking effect.