B-168675, FEB. 17, 1970

B-168675: Feb 17, 1970

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IN CONNECTION WITH RESIDENCE TRANSACTIONS MAY NOT BE PAID SINCE SUCH FEES WERE REMOVED FROM THE LISTING OF REIMBURSABLE EXPENSES PURSUANT TO THE TRUTH-IN-LENDING ACT. A VETERAN'S ADMINISTRATION FUNDING FEE IS A FEE REQUIRED TO BE COLLECTED UNDER 38 U.S.C. 1818(D) AS A CONDITION PRECEDENT TO THE GUARANTEE OF THE HOME LOAN TO THE VETERAN AND IS A FINANCE CHARGE WHICH MAY NOT BE PAID IF SUCH FEE IS INCURRED SUBSEQUENT TO JUNE 30. DAWSON: REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 17. BREWER WAS TRANSFERRED FROM WASHINGTON. HE WAS DELAYED IN REPORTING DUE TO THE LATE ARRIVAL OF GOVERNMENT EQUIPMENT AT HIS NEW DUTY STATION. THE SETTLEMENT WAS TO OCCUR ON OR BEFORE JULY 1. THE ACTUAL DATE OF SETTLEMENT WAS JULY 15.

B-168675, FEB. 17, 1970

CIVIL PAY--TRANSFERS--REAL ESTATE EXPENSES DECISION TO THE FINANCE AND ACCOUNTING OFFICER OF THE NATIONAL SECURITY AGENCY CONCLUDING THAT AN EMPLOYEE'S CLAIM FOR REIMBURSEMENT FOR A FEE INCIDENT TO A LOAN FOR THE PURCHASE OF A RESIDENCE AT LAUREL, MD. MAY NOT BE PAID. CLAIMS FOR REIMBURSEMENT OF LOAN ORIGINATION FEES INCURRED SUBSEQUENT TO JUNE 30, 1969, IN CONNECTION WITH RESIDENCE TRANSACTIONS MAY NOT BE PAID SINCE SUCH FEES WERE REMOVED FROM THE LISTING OF REIMBURSABLE EXPENSES PURSUANT TO THE TRUTH-IN-LENDING ACT, EFFECTIVE JULY 1, 1969. A VETERAN'S ADMINISTRATION FUNDING FEE IS A FEE REQUIRED TO BE COLLECTED UNDER 38 U.S.C. 1818(D) AS A CONDITION PRECEDENT TO THE GUARANTEE OF THE HOME LOAN TO THE VETERAN AND IS A FINANCE CHARGE WHICH MAY NOT BE PAID IF SUCH FEE IS INCURRED SUBSEQUENT TO JUNE 30, 1969.

TO MR. GILBERT H. DAWSON:

REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 17, 1969, SERIAL D5/2168F, FORWARDED HERE BY THE PER DIEM, TRAVEL AND TRANSPORTATION ALLOWANCE COMMITTEE ON DECEMBER 12, 1969, PDTATAC CONTROL NO. 69-48, FOR AN ADVANCE DECISION WHETHER THE CLAIM FOR REIMBURSEMENT OF REAL ESTATE EXPENSES MAY BE MADE TO MR. CHARLES B. BREWER, AND EMPLOYEE OF THE NATIONAL SECURITY AGENCY, INCIDENT TO A PERMANENT CHANGE OF STATION.

THE INFORMATION OF RECORD SHOWS THAT MR. BREWER WAS TRANSFERRED FROM WASHINGTON, D. C; TO FORT GEORGE G. MEADE REPORTING FOR DUTY AT HIS NEW DUTY STATION JULY 15, 1968. ALTHOUGH SCHEDULED TO REPORT ON JUNE 25, 1968, HE WAS DELAYED IN REPORTING DUE TO THE LATE ARRIVAL OF GOVERNMENT EQUIPMENT AT HIS NEW DUTY STATION. ON FEBRUARY 23, 1969, MR. BREWER ENTERED INTO A CONTRACT TO PURCHASE A RESIDENCE AT LAUREL, MARYLAND. ACCORDING TO THE PURCHASE CONTRACT, THE SETTLEMENT WAS TO OCCUR ON OR BEFORE JULY 1, 1969. THE ACTUAL DATE OF SETTLEMENT WAS JULY 15, 1969.

IT IS STATED THAT THE 1-YEAR ELIGIBILITY TERMINATED ON JULY 14, 1969, AND YOU SAY THAT THERE IS NOTHING IN THE RECORD TO INDICATE ANY TYPE OF LITIGATION OR WHY THE PROPERTY BEING PURCHASED COULD NOT HAVE GONE TO SETTLEMENT PRIOR TO JULY 15, 1969. THIS APPEARS TO BE AN ARBITRARY DATE MUTUALLY ACCEPTABLE TO THE BUYER AND THE SELLER.

SECTION 4.1E OF CIRCULAR NO. A-56, REVISED JUNE 26, 1969, FORMERLY SECTION 4.1D, WAS AMENDED TO PROVIDE AGENCY AUTHORITY TO EXTEND THE 1 YEAR LIMITATION, UNDER SPECIFIED CONDITIONS, FOR SETTLEMENT. THE CIRCUMSTANCES WHICH ARE DETERMINED BY THE HEAD OF THE AGENCY OR HIS DESIGNEE TO JUSTIFY THE EXCEPTION SHALL BE SET FORTH IN WRITING. IN THE ABSENCE OF SUCH A DETERMINATION, THE CLAIM MAY NOT BE ALLOWED.

YOU REQUEST INFORMATION WHETHER LOAN ORIGINATION FEES AND VETERANS ADMINISTRATION FUNDING FEES ARE NOW ALLOWABLE ITEMS SINCE YOU HAVE SEVERAL ADDITIONAL CLAIMS IN PROCESS WHEREIN LOAN ORIGINATION FEES AND VA FUNDING FEES ARE BEING CLAIMED. SINCE YOU REFER TO THE TRUTH IN LENDING ACT, TITLE 1, PUBLIC LAW 90-321, EFFECTIVE JULY 1, 1969, WE ASSUME THE SETTLEMENT DATE OF THE CLAIMS YOU HAVE PENDING WERE SUBSEQUENT TO JULY 1, 1969, AND OUR ANSWERS WILL BE BASED ON THAT ASSUMPTION.

WITH THE REVISION OF BUREAU OF THE BUDGET CIRCULAR NO. A-56, AS PROVIDED UNDER TRANSMITTAL MEMORANDUM NO. 5, "LENDER'S LOAN ORIGINATION FEE" WAS REMOVED FROM THE LISTING OF REIMBURSABLE EXPENSES UNDER SECTION 4.2D RELATING TO ALLOWANCE FOR EXPENSES INCURRED IN CONNECTION WITH RESIDENCE TRANSACTIONS. THUS, CLAIMS FOR REIMBURSEMENT OF LOAN ORIGINATION FEES INCURRED SUBSEQUENT TO JUNE 30, 1969, IN CONNECTION WITH RESIDENCE TRANSACTIONS MAY NOT BE PAID.

THE VETERANS ADMINISTRATION FUNDING FEE IS A FEE THAT IS REQUIRED TO BE COLLECTED FROM THE VETERAN BY THE VETERANS ADMINISTRATION UNDER 38 U.S.C. 1818(D) AS A CONDITION PRECEDENT TO THE GUARANTEE OF THE LOAN TO THE VETERAN.

WE HAVE HELD THAT THE FUNDING FEE IS A FINANCE CHARGE WITHIN THE PROVISIONS OF 12 CFR 226.4(A)(7) OF THE REGULATIONS IMPLEMENTING THE TRUTH IN LENDING ACT. SEE B-168674, DATED FEBRUARY 10, 1970, COPY ENCLOSED. ACCORDINGLY, CLAIMS FOR REIMBURSEMENT OF FUNDING FEES INCURRED SUBSEQUENT TO JUNE 30, 1969, IN CONNECTION WITH RESIDENCE TRANSACTIONS MAY NOT BE PAID.