Request for Reimbursement of Mortgage Discount

An advance decision was requested as to whether payment could be made on a voucher submitted by a Federal employee for reimbursement of a warehousing fee charged in connection with the sale of his residence upon his relocation. A warehousing fee is a charge paid by the seller to cover the carrying cost incurred by the mortgagor for the temporary warehousing of a mortgage until its transfer to a permanent investor. The fee covers the interest on a portion of the mortgage lost by the mortgage company between the time a loan is made and the time when the mortgage is sold to the permanent investor. Thus, a warehousing fee is a discount charged to the seller. Federal regulations specifically prohibit reimbursement of interest on loans, points, and mortgage discounts. Accordingly, since a warehousing fee is a mortgage discount, it may not be reimbursed, and the voucher may not be certified for payment.