B-167605, AUG. 21, 1969

B-167605: Aug 21, 1969

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EMPLOYEE WHO NEGOTIATED TWO LOANS AGGREGATING 90 PERCENT OF HOME PURCHASE PRICE AND PAID PROCESSING FEE AND RECORDING FEE MAY HAVE SUCH CHARGES REIMBURSED UNDER SECTION 4.2D OF BUREAU OF THE BUDGET CIRCULAR NO. DO NOT EXCEED THE CUSTOMARY COSTS IN THE AREA AND ARE REASONABLE AND DO COMPENSATE LENDER FOR HIGH RISK INVOLVED. KELL: THIS IS IN REPLY TO YOUR LETTER OF JULY 17. DEWITT'S CLAIM FOR REIMBURSEMENT OF THESE AMOUNTS WAS DISALLOWED ON THE GROUND THEY WERE ITEMS OF PERSONAL EXPENSE. DEWITT STATES THERE IS NO DISTINCTION BETWEEN FIRST AND SECOND MORTGAGE COSTS AND RECLAIMS $192. OTHERWISE PROPER FINANCING COSTS INCURRED IN CONNECTION WITH THE NEGOTIATION OF A SECOND MORTGAGE AT THE TIME OF PURCHASE MAY BE REIMBURSED PROVIDED THEY DO NOT EXCEED THE CUSTOMARY COSTS IN THE AREA INVOLVED AND THE CHARGES ARE REASONABLE AND DO NOT COMPENSATE THE LENDER FOR THE HIGH RISK INVOLVED.

B-167605, AUG. 21, 1969

CIVIL PAY - TRANSFERS - REAL ESTATE MORTGAGES DECISION TO CERTIFYING OFFICER OF INTERNAL REVENUE SERVICE CONCERNING REIMBURSEMENT OF HOME FINANCING COSTS INCIDENT TO TRANSFER FROM ATLANTA, GA., TO GREENSBORO, NORTH CAROLINA. EMPLOYEE WHO NEGOTIATED TWO LOANS AGGREGATING 90 PERCENT OF HOME PURCHASE PRICE AND PAID PROCESSING FEE AND RECORDING FEE MAY HAVE SUCH CHARGES REIMBURSED UNDER SECTION 4.2D OF BUREAU OF THE BUDGET CIRCULAR NO. A-56 PROVIDED THE COSTS, INCIDENT TO A SECOND MORTGAGE AT TIME OF PURCHASE, DO NOT EXCEED THE CUSTOMARY COSTS IN THE AREA AND ARE REASONABLE AND DO COMPENSATE LENDER FOR HIGH RISK INVOLVED.

TO MISS MILDRED J. KELL:

THIS IS IN REPLY TO YOUR LETTER OF JULY 17, 1969, REFERENCE ADFF:LM, REQUESTING A DECISION AS TO WHETHER YOU MAY CERTIFY FOR PAYMENT A VOUCHER FOR $192 IN FAVOR OF MR. CHARLES O. DEWITT, AN EMPLOYEE OF YOUR AGENCY.

MR. DEWITT PURCHASED A HOME INCIDENT TO HIS TRANSFER OF OFFICIAL STATION FROM ATLANTA, GEORGIA, TO GREENSBORO, NORTH CAROLINA. IN ORDER TO FINANCE THE PURCHASE, HE NEGOTIATED TWO LOANS AGGREGATING 90 PERCENT OF THE PURCHASE PRICE AND PAID A PROCESSING FEE (PRESUMABLY A LOAN ORIGINATION FEE) OF $138 AND RECORDING FEES OF $54 IN CONNECTION WITH A SECOND MORTGAGE. MR. DEWITT'S CLAIM FOR REIMBURSEMENT OF THESE AMOUNTS WAS DISALLOWED ON THE GROUND THEY WERE ITEMS OF PERSONAL EXPENSE. MR. DEWITT STATES THERE IS NO DISTINCTION BETWEEN FIRST AND SECOND MORTGAGE COSTS AND RECLAIMS $192.

SECTION 4.2D OF BUREAU OF THE BUDGET CIRCULAR NO. A-56 PROVIDES FOR REIMBURSEMENT OF FINANCING COSTS INCIDENT TO THE PURCHASE OF A HOME. OTHERWISE PROPER FINANCING COSTS INCURRED IN CONNECTION WITH THE NEGOTIATION OF A SECOND MORTGAGE AT THE TIME OF PURCHASE MAY BE REIMBURSED PROVIDED THEY DO NOT EXCEED THE CUSTOMARY COSTS IN THE AREA INVOLVED AND THE CHARGES ARE REASONABLE AND DO NOT COMPENSATE THE LENDER FOR THE HIGH RISK INVOLVED. B-166698, MAY 27, 1969, COPY ENCLOSED.

THE VOUCHER, WHICH IS RETURNED HEREWITH, MAY BE PROCESSED IN ACCORDANCE WITH THE ABOVE.