B-165851, FEB. 11, 1969

B-165851: Feb 11, 1969

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SCHULTZ: THIS IS IN REPLY TO YOUR LETTER OF DECEMBER 17. WHO WAS TRANSFERRED FROM GREAT FALLS. THE PURCHASER MADE A DEPOSIT AND WAS TO PAY THE BALANCE OF THE PURCHASE PRICE "VIA ASSUMPTION OF CURRENT LOAN AND BALANCE OF EQUITY PAYABLE AT CLOSING VIA CASH SETTLEMENT.'. A-56 PROVIDES THAT THE GOVERNMENT WILL REIMBURSE AN EMPLOYEE FOR EXPENSES REQUIRED TO BE PAID BY HIM IN CONNECTION WITH THE SALE OF ONE RESIDENCE AT HIS OLD OFFICIAL STATION IN CONNECTION WITH A TRANSFER OF OFFICIAL STATION. SECTION 4.2D OF THE CIRCULAR PROVIDES THAT A CHARGE MADE FOR PREPAYMENT OF A MORTGAGE IN CONNECTION WITH THE SALE OF A RESIDENCE AT THE OLD OFFICIAL STATION IS REIMBURSABLE IF THE TERMS IN THE ORIGINAL MORTGAGE INSTRUMENT PROVIDE FOR SUCH A COST.

B-165851, FEB. 11, 1969

TO MR. C. H. SCHULTZ:

THIS IS IN REPLY TO YOUR LETTER OF DECEMBER 17, 1968, REFERENCE 300, REQUESTING OUR DECISION AS TO WHETHER A VOUCHER IN THE AMOUNT OF $191.16 SUBMITTED BY MR. DONALD E. CLEMANS, AN EMPLOYEE OF YOUR AGENCY, MAY BE CERTIFIED FOR PAYMENT.

MR. CLEMANS, WHO WAS TRANSFERRED FROM GREAT FALLS, MONTANA, TO BISMARCK, NORTH DAKOTA, EFFECTIVE JUNE 30, 1968, ENTERED INTO AN AGREEMENT TO SELL HIS RESIDENCE. THE PURCHASER MADE A DEPOSIT AND WAS TO PAY THE BALANCE OF THE PURCHASE PRICE "VIA ASSUMPTION OF CURRENT LOAN AND BALANCE OF EQUITY PAYABLE AT CLOSING VIA CASH SETTLEMENT.' HOWEVER, THE PURCHASER PAID THE LOAN AND $191.16, THE 2 PERCENT PREPAYMENT PENALTY SPECIFIED IN THE PROMISSORY NOTE, AND THE REAL ESTATE BROKER CHARGED THE PENALTY TO MR. CLEMANS. IN A LETTER OF EXPLANATION TO MR. CLEMANS THE BROKER STATED HE HAD CONTACTED THE LENDER, THE LENDER DID NOT ADVISE HIM OF THE PENALTY, AND HE COULD NOT MISREPRESENT THE SALE BY CHARGING THE PURCHASER OVER AND ABOVE THE STIPULATED PURCHASE PRICE.

SECTION 4.1 OF BUREAU OF THE BUDGET CIRCULAR NO. A-56 PROVIDES THAT THE GOVERNMENT WILL REIMBURSE AN EMPLOYEE FOR EXPENSES REQUIRED TO BE PAID BY HIM IN CONNECTION WITH THE SALE OF ONE RESIDENCE AT HIS OLD OFFICIAL STATION IN CONNECTION WITH A TRANSFER OF OFFICIAL STATION. SECTION 4.2D OF THE CIRCULAR PROVIDES THAT A CHARGE MADE FOR PREPAYMENT OF A MORTGAGE IN CONNECTION WITH THE SALE OF A RESIDENCE AT THE OLD OFFICIAL STATION IS REIMBURSABLE IF THE TERMS IN THE ORIGINAL MORTGAGE INSTRUMENT PROVIDE FOR SUCH A COST.

IN THE INSTANT CASE THE SALES AGREEMENT PROVIDED FOR THE PURCHASER TO ASSUME THE CURRENT LOAN AND THE SELLER TO TRANSFER ALL ESCROW THEREON TO THE PURCHASER WITHOUT ADDITIONAL COST TO THE LATTER. THEREFORE, IT IS CLEAR THAT THE AGREEMENT DID NOT REQUIRE THE SELLER TO PAY THE PENALTY SHOULD THE PURCHASER PREPAY THE LOAN AT TIME OF SETTLEMENT. MOREOVER, WE NOTE THAT THE BROKER IN HIS LETTER OF EXPLANATION STATED THAT WHILE MR. CLEMANS WAS CHARGED WITH THE PENALTY OF $191.16 HE WAS ALSO CREDITED WITH AN ADDITIONAL $310.03 OF THE ESCROW MONEY. IN VIEW OF THE ABOVE THE VOUCHER RETURNED HEREWITH MAY NOT BE CERTIFIED FOR PAYMENT.