Settlement fee is another word for Escrow. If you've not gone to contract yet, the Settlement Fee is simply an estimate at this time. It's also not a certain cost that the lender has quoted. Many escrows have an "escrow fee" plus many other fees that are not always lumped into their settlement fee, but are part of the total settlement charges. The lender does not control this cost and should not be used for comparison purposes.
The 2010 RESPA law changes require lenders to show an Origination Fee, then discount that fee depending on the rate. The Origination Fee is comprised of several costs so it's not always what was known as "Points" in days gone by. You might find that for a $300,000 loan, you'd have a $3000 Origination Fee, then a lender credit based on the rate your chosing for $3000 which means your rate is 5.0% but your cost is zero. If you are discounting your rate, you might have 4.750% for a $3000 Origination Fee, a $1,500 credit from the lender, which means that 4.75% is costing you 1/2 point.
Yes, it's confusing, but that is the world view you have to work within to get some kind of comparison of rates and terms. Even after you've gotten the quote your rate is not yet locked. Rates change hourly sometimes so 5.0% at -0- points quoted at noon might be 4.875% for -0- (YAY!) at 3:00 PM or 5.125% later that day (BOO!)
.125 in rate is real money, but working with a lender who can get your loan approved is even more important to shop for. The board is rife with stories of last second issues popping up during escrow. Some lenders can work around these issues, many don't however which can kill a deal quickly.