Skip to main content

Matter of: Bruce R. Wheeler File: B-249621 Date: January 19, 1993

B-249621 Jan 19, 1993
Jump To:
Skip to Highlights

Highlights

The payment of which was required at settlement. Claim is denied. Was authorized a change of official duty station. He was required to pay a "mortgage insurance premium" at settlement by HUD since his down payment was less than 20 percent of the purchase price. Insurance which insures the lender against possible default on the mortgage by the purchaser is not a reimbursable expense. Whether the premiums for "mortgage insurance" are paid at settlement or over the life of the mortgage. Such premiums are clearly not reim- bursable under the FTR provision and our decisions cited above. Wheeler's claim for reimbursement of the mortgage insurance premium paid at settlement is denied.

View Decision

Matter of: Bruce R. Wheeler File: B-249621 Date: January 19, 1993

CIVILIAN PERSONNEL Relocation Residence transaction expenses Mortgage insurance Reimbursement A transferred employee claims reimbursement for a mortgage insurance premium, the payment of which was required at settlement. The Federal Travel Regulation, 41 C.F.R. Sec. 302-6.2(d)(2)(i) (1991), specifically prohibits reimbursement of this type of charge. Claim is denied.

DECISION The National Credit Union Administration (NCUA) requests a ruling on whether it may pay the claim of an employee for reimbursement of a one-time mortgage insurance premium paid at settlement and required by the Federal Housing Administration, Department of Housing and Urban Development (HUD). For the following reasons, the claim may not be paid.

Mr. Bruce R. Wheeler, a NCUA employee, was authorized a change of official duty station. When Mr. Wheeler purchased a new residence on March 15, 1990, he was required to pay a "mortgage insurance premium" at settlement by HUD since his down payment was less than 20 percent of the purchase price.

"Mortgage insurance" insures the lender against possible default on the mortgage by the purchaser. The Federal Travel Regulation, 41 C.F.R. Sec. 302-6.2(d)(2)(i) (1991) provides, in relevant part, that "mortgage insurance," i.e., insurance which insures the lender against possible default on the mortgage by the purchaser is not a reimbursable expense.

Pappas and Grubaugh, B-226010, Nov. 30, 1987; Michael S. Kochmanski, B-227503, Aug. 20, 1987; Daniel T. Mates, B-217822, June 20, 1985. Thus, whether the premiums for "mortgage insurance" are paid at settlement or over the life of the mortgage, such premiums are clearly not reim- bursable under the FTR provision and our decisions cited above.

Accordingly, Mr. Wheeler's claim for reimbursement of the mortgage insurance premium paid at settlement is denied.

GAO Contacts

Office of Public Affairs