B-168239, DEC. 15, 1969

B-168239: Dec 15, 1969

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IS NOT ENTITLED TO REIMBURSEMENT OF LOAN SERVICE CHARGE. EVEN THOUGH ADVISED AT TIME OF TRANSFER IN SEPT. 1968 THAT LENDER'S LOAN ORIGINATION FEE WAS REIMBURSABLE REAL ESTATE EXPENSE. SINCE SUCH FEE WAS REMOVED FROM LISTING OF REIMBURSABLE EXPENSES BY REVISION OF SEC. 4.2D OF BUREAU OF BUDGET CIR. A-56 AND IT IS IMMATERIAL THAT EMPLOYEE WAS NOT AWARE OF REVISED REGULATION WHICH BECAME EFFECTIVE JUNE 26. 1969 BETWEEN EXECUTION OF CONTRACT AND SETTLEMENT DATE AS REGULATION IS STATUTORY IN NATURE AND HAS FORCE AND EFFECT OF LAW. THE PERTINENT FACTS IN THIS MATTER ARE THAT IN THE ISSUANCE OF MR. HE WAS GIVEN A LIST OF INSTRUCTIONS AND AN ITEMIZATION OF REIMBURSABLE REAL ESTATE EXPENSES. INCLUDING LOAN ORIGINATION FEE WHICH AT THAT TIME WAS AN ALLOWABLE EXPENSE UNDER SECTION 4.2B OF CIRCULAR NO.

B-168239, DEC. 15, 1969

OFFICERS AND EMPLOYEES--TRANSFERS--RELOCATION EXPENSES--HOUSE PURCHASE- LOAN CHARGES EMPLOYEE WHO ENTERED INTO CONTRACT TO PURCHASE HOME AT NEW DUTY STATION ON JUNE 11, 1969 AND MADE SETTLEMENT THEREON ON AUG. 1, 1969, IS NOT ENTITLED TO REIMBURSEMENT OF LOAN SERVICE CHARGE, EVEN THOUGH ADVISED AT TIME OF TRANSFER IN SEPT. 1968 THAT LENDER'S LOAN ORIGINATION FEE WAS REIMBURSABLE REAL ESTATE EXPENSE, SINCE SUCH FEE WAS REMOVED FROM LISTING OF REIMBURSABLE EXPENSES BY REVISION OF SEC. 4.2D OF BUREAU OF BUDGET CIR. NO. A-56 AND IT IS IMMATERIAL THAT EMPLOYEE WAS NOT AWARE OF REVISED REGULATION WHICH BECAME EFFECTIVE JUNE 26, 1969 BETWEEN EXECUTION OF CONTRACT AND SETTLEMENT DATE AS REGULATION IS STATUTORY IN NATURE AND HAS FORCE AND EFFECT OF LAW.

TO MR. T. U. HARDEMAN:

YOUR LETTER OF OCTOBER 17, 1969, AND ENCLOSURES, REFERENCE A-AND-TS FIN- DIR, FORWARDED TO US BY THE DIRECTOR OF FINANCIAL MANAGEMENT ON OCTOBER 28, 1969, REFERENCE BFG, REQUESTS AN ADVANCE DECISION WHETHER THE AMOUNT OF $370.75 RECLAIMED ON THE ENCLOSED VOUCHER SUBMITTED BY MR. GEORGE R. RUSSELL MAY BE CERTIFIED FOR PAYMENT TO HIM.

AS YOU SAY, THE MATTER INVOLVES THE APPLICATION OF SECTION 4.2D OF BUREAU OF THE BUDGET CIRCULAR NO. A-56 AS REVISED BY TRANSMITTAL MEMORANDUM NO. 5, EFFECTIVE JUNE 26, 1969, WHICH REMOVED ,LENDER'S LOAN ORIGINATION" FEE FROM THE LISTING OF REIMBURSABLE EXPENSES IN CONNECTION WITH REAL ESTATE TRANSACTIONS.

THE PERTINENT FACTS IN THIS MATTER ARE THAT IN THE ISSUANCE OF MR. RUSSELL'S CHANGE OF STATION ORDERS DATED SEPTEMBER 3, 1968, HE WAS GIVEN A LIST OF INSTRUCTIONS AND AN ITEMIZATION OF REIMBURSABLE REAL ESTATE EXPENSES, INCLUDING LOAN ORIGINATION FEE WHICH AT THAT TIME WAS AN ALLOWABLE EXPENSE UNDER SECTION 4.2B OF CIRCULAR NO. A-56 OF OCTOBER 12, 1966. ALSO, THE ENCLOSURES SHOW THAT ON JUNE 11, 1969, MR. RUSSELL ENTERED INTO A SALES CONTRACT TO PURCHASE A RESIDENCE WHICH PROVIDED, IN PART: "THIS CONTRACT IS SUBJECT TO PURCHASER OBTAINING A * * * CONVENTIONAL LOAN ON THIS PROPERTY IN THE AMOUNT OF $20,600 FOR 25 YEARS, OTHERWISE, EARNEST MONEY WILL BE REFUNDED * * *" AND THAT "PURCHASER TO PAY ALL CLOSING COSTS.' THEREAFTER THE SETTLEMENT OF THE LOAN AND PURCHASE WAS ACCOMPLISHED ON AUGUST 1, 1969, AND UNDER "PREPAID FINANCE CHARGE" INCLUDED "INITIAL SERVICE CHARGE -- $370.75" BY THE SECURITY FEDERAL SAVINGS AND LOAN ASSOCIATION OF HUNTSVILLE.

AS YOU POINT OUT OUR DECISION AT 47 COMP. GEN. 582 (B-163827 DATED APRIL 23, 1968) HELD THAT A CONTRACT TO SELL REALTY IS NOT A SALE UNTIL TITLE OR EQUITABLE INTEREST IS TRANSFERRED, USUALLY AT THE TIME OF SETTLEMENT. HOWEVER, AS TO THE REVISION OF SECTION 4.2D, WE ENCLOSE HEREWITH A COPY OF OUR DECISION B-168011 DATED OCTOBER 24, 1969, WHICH CONSIDERED A CASE INVOLVING SIMILAR FACTS AND CIRCUMSTANCES AS PRESENTED IN THIS CASE.

HENCE, IT IS IMMATERIAL THAT MR. RUSSELL WAS NOT AWARE OF THE REVISED REGULATION WHICH BECAME EFFECTIVE DURING THE TIME BETWEEN THE DATE OF HIS CONTRACT AND ITS SETTLEMENT DATE. AS THE REGULATION IS STATUTORY IN NATURE AND HAS THE FORCE AND EFFECT OF LAW, HE IS CHARGEABLE WITH CONSTRUCTIVE NOTICE OF THE REVISION OF SECTION 4.2D AND OF THE EFFECTIVE DATE THEREOF.

THEREFORE, THE VOUCHER TOGETHER WITH ATTACHMENTS, RETURNED HEREWITH, MAY NOT BE CERTIFIED FOR PAYMENT.