how to get our money back from loan agent

When we did refi last month, the loan agent said it will be no point no fee.

However he asked us to pay the fee upfront, then he will reimberse the money back to us.

After a month, now he is saying he has to issue 1099 to us, this means we have to pay tax, right?

Then the money will be chopped off half almost.

Q: how could he give us the money back? cost may aorund $3k for $600k loan amount.

Could he pay us by his personal check? Or could her pay us back in several installments to be lower than $600 each time?

Your help is really needed and appreciated! QQH is you prefer.