B-180981, OCT 1, 1974

B-180981: Oct 1, 1974

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EMPLOYEE WHO PURCHASED RESIDENCE INCIDENT TO TRANSFER WAS CHARGED FEE TO SEARCH FOR. ALTHOUGH IT WAS NOT LISTED AS A FINANCE CHARGE. THE FEE IS NOT REIMBURSABLE UNDER FEDERAL TRAVEL REGULATIONS SINCE IT IS ACTUALLY A FINANCE CHARGE. WAHL WAS TRANSFERRED FROM RHINELANDER. THE INFORMATION FURNISHED WITH THE SUBMISSION IMPLIES THAT THIS SERVICE IS PROVIDED FOR THE LIFE OF THE MORTGAGE BUT DOES NOT STATE WHETHER THE $25 FEE IS A ONE-TIME OR ANNUAL CHARGE. THE CERTIFYING OFFICER HAS REQUESTED OUR DECISION AS TO WHETHER THE SERVICE FEE IN QUESTION WHICH WAS CLAIMED BY MR. WAHL ON HIS TRAVEL VOUCHER IS AN EXPENSE ELIGIBLE FOR REIMBURSEMENT. OR EXPENSE IS REIMBURSABLE WHICH IS DETERMINED TO BE A PART OF THE FINANCE CHARGE UNDER THE TRUTH IN LENDING ACT.

B-180981, OCT 1, 1974

EMPLOYEE WHO PURCHASED RESIDENCE INCIDENT TO TRANSFER WAS CHARGED FEE TO SEARCH FOR, IDENTIFY, AND REPORT PROPERTY TAXES AND ASSESSMENTS ON MORTGAGED REAL PROPERTY. ALTHOUGH IT WAS NOT LISTED AS A FINANCE CHARGE, THE FEE IS NOT REIMBURSABLE UNDER FEDERAL TRAVEL REGULATIONS SINCE IT IS ACTUALLY A FINANCE CHARGE.

JERROLD J. WAHL - RELOCATION EXPENSE:

THIS ACTION CONCERNS A REQUEST FROM AN AUTHORIZED CERTIFYING OFFICER FOR AN ADVANCE DECISION AS TO WHETHER MR. JERROLD J. WAHL, AN EMPLOYEE OF THE DEPARTMENT OF AGRICULTURE, MAY BE REIMBURSED FOR A TAX SERVICE FEE PAID BY HIM INCIDENT TO THE PURCHASE OF A RESIDENCE IN CONNECTION WITH A TRANSFER OF STATION.

MR. WAHL WAS TRANSFERRED FROM RHINELANDER, WISCONSIN, TO JUNEAU, ALASKA. UPON ARRIVAL IN JUNEAU HE PURCHASED A HOUSE AND CONTRACTED FOR A MORTGAGE WITH THE NATIONAL BANK OF ALASKA (BANK). THE BANK, AS A PREREQUISITE TO ANY MORTGAGE, REQUIRED THAT AN ANNUAL TAX AND ASSESSMENT SEARCH BE PERFORMED AND CONTRACTED WITH THE ALASKA REALTY TAX SERVICE TO PERFORM THIS TASK FOR A FEE OF $25. HOWEVER, THE BANK DID NOT LIST THE FEE AS A FINANCE CHARGE. THE INFORMATION FURNISHED WITH THE SUBMISSION IMPLIES THAT THIS SERVICE IS PROVIDED FOR THE LIFE OF THE MORTGAGE BUT DOES NOT STATE WHETHER THE $25 FEE IS A ONE-TIME OR ANNUAL CHARGE. THE CERTIFYING OFFICER HAS REQUESTED OUR DECISION AS TO WHETHER THE SERVICE FEE IN QUESTION WHICH WAS CLAIMED BY MR. WAHL ON HIS TRAVEL VOUCHER IS AN EXPENSE ELIGIBLE FOR REIMBURSEMENT.

SUBPARAGRAPH 2-6.2D OF THE FEDERAL TRAVEL REGULATIONS READS IN PART AS FOLLOWS:

"*** NO FEE, COST, CHARGE, OR EXPENSE IS REIMBURSABLE WHICH IS DETERMINED TO BE A PART OF THE FINANCE CHARGE UNDER THE TRUTH IN LENDING ACT, TITLE I, PUBLIC LAW 90-321, AND REGULATION Z ISSUED PURSUANT THERETO BY THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM. ***"

SECTION 106 OF THE TRUTH IN LENDING ACT, 15 U.S.C. 1605, PROVIDES IN PART AS FOLLOWS:

"(A) EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION, THE AMOUNT OF THE FINANCE CHARGE IN CONNECTION WITH ANY CONSUMER CREDIT TRANSACTION SHALL BE DETERMINED AS THE SUM OF ALL CHARGES, PAYABLE DIRECTLY OR INDIRECTLY BY THE PERSON TO WHOM THE CREDIT IS EXTENDED, AND IMPOSED DIRECTLY OR INDIRECTLY BY THE CREDITOR AS AN INCIDENT TO THE EXTENSION OF CREDIT, INCLUDING ANY OF THE FOLLOWING TYPES OF CHARGES WHICH ARE APPLICABLE:

"(1) INTEREST, TIME PRICE DIFFERENTIAL, AND ANY AMOUNT PAYABLE UNDER A POINT, DISCOUNT, OR OTHER SYSTEM OF ADDITIONAL CHARGES.

"(2) SERVICE OR CARRYING CHARGE.

"(3) LOAN FEE, FINDER'S FEE, OR SIMILAR CHARGE.

"(4) FEE FOR AN INVESTIGATION OR CREDIT REPORT.

"(5) PREMIUM OR OTHER CHARGE FOR ANY GUARANTEE OR INSURANCE PROTECTING THE CCREDITOR AGAINST THE OBLIGOR'S DEFAULT OR OTHER CREDIT LOSS.

"(E) THE FOLLOWING ITEMS, WHEN CHARGED IN CONNECTION WITH ANY EXTENSION OF CREDIT SECURED BY AN INTEREST IN REAL PROPERTY, SHALL NOT BE INCLUDED IN THE COMPUTATION OF THE FINANCE CHARGE WITH RESPECT TO THAT TRANSACTION:

"(1) FEES OR PREMIUMS FOR TITLE EXAMINATION, TITLE INSURANCE, OR SIMILAR PURPOSES.

"(2) FEES FOR PREPARATION OF A DEED, SETTLEMENT STATEMENT, OR OTHER DOCUMENTS.

"(3) ESCROWS FOR FUTURE PAYMENTS OF TAXES AND INSURANCE.

"(4) FEES FOR NOTARIZING DEEDS AND OTHER DOCUMENTS.

"(5) APPRAISAL FEES.

"(6) CREDIT REPORTS."

REGULATION Z, PROMULGATED PURSUANT TO THE TRUTH IN LENDING ACT, 15 U.S.C. 1601-5, PROVIDES IN PERTINENT PART (12 CFR 226.4):

"SEC. 226.4 DETERMINATION OF FINANCE CHARGE.

"(A) GENERAL RULE. EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION, THE AMOUNT OF THE FINANCE CHARGE IN CONNECTION WITH ANY TRANSACTION SHALL BE DETERMINED AS THE SUM OF ALL CHARGES, PAYABLE DIRECTLY OR INDIRECTLY, BY THE CUSTOMER, AND IMPOSED DIRECTLY OR INDIRECTLY BY THE CREDITOR AS AN INCIDENT TO OR AS A CONDITION OF THE EXTENSION OF CREDIT, WHETHER PAID OR PAYABLE BY THE CUSTOMER, THE SELLER, OR ANY OTHER PERSON ON BEHALF OF THE CUSTOMER TO THE CREDITOR OR TO A THIRD PARTY, INCLUDING ANY OF THE FOLLOWING TYPES OF CHARGES:

"(1) INTEREST, TIME PRICE DIFFERENTIAL, AND ANY AMOUNT PAYABLE UNDER A DISCOUNT OR OTHER SYSTEM OF ADDITIONAL CHARGES.

"(2) SERVICE, TRANSACTION, ACTIVITY, OR CARRYING CHARGE.

"(7) PREMIUM OR OTHER CHARGE FOR ANY OTHER GUARANTEE OR INSURANCE PROTECTING THE CREDITOR AGAINST THE CUSTOMER'S DEFAULT OR OTHER CREDIT LOSS.

"(E) EXCLUDABLE CHARGES, REAL PROPERTY TRANSACTIONS. THE FOLLOWING CHARGES IN CONNECTION WITH ANY REAL PROPERTY TRANSACTION, PROVIDED THEY ARE BONA FIDE, REASONABLE IN AMOUNT, AND NOT FOR THE PURPOSE OF CIRCUMVENTION OR EVASION OF THIS PART, SHALL NOT BE INCLUDED IN THE FINANCE CHARGE WITH RESPECT TO THAT TRANSACTION:

"(1) FEES OR PREMIUMS FOR TITLE EXAMINATION, ABSTRACT OF TITLE, TITLE INSURANCE, OR SIMILAR PURPOSES AND FOR REQUIRED RELATED PROPERTY SURVEYS.

"(2) FEES FOR PREPARATION OF DEEDS, SETTLEMENT STATEMENTS, OR OTHER DOCUMENTS.

"(3) AMOUNTS REQUIRED TO BE PLACED OR PAID INTO AN ESCROW OR TRUSTEE ACCOUNT FOR FUTURE PAYMENTS OF TAXES, INSURANCE, AND WATER, SEWER, AND LAND RENTS.

"(4) FEES FOR NOTARIZING DEEDS AND OTHER DOCUMENTS.

"(5) APPRAISAL FEES.

"(6) CREDIT REPORTS."

AS MAY BE SEEN FROM THE MATERIAL QUOTED ABOVE, "SERVICE CHARGES" ARE TO BE INCLUDED AS FINANCE CHARGES. 15 U.S.C. 1605(A)(2); 12 CFR 226.4(A)(2). FURTHER, IT IS APPARENT THAT WHILE CERTAIN CHARGES CONNECTED WITH REAL PROPERTY TRANSACTIONS, SOME OF WHICH MIGHT BE DENOMINATED AS A "SERVICE CHARGE," ARE SPECIFICALLY EXCLUDED FROM FINANCE CHARGES (15 U.S.C. 1605(E); 12 CFR 226.4(E)) SERVICE CHARGES IN GENERAL ARE NOT EXCLUDED. THUS, IT MAY BE SEEN THAT THE EXPENSE OF HIRING A FIRM TO SEARCH FOR, IDENTIFY, AND REPORT ANNUALLY ALL PROPERTY TAXES AND ASSESSMENTS DUE AND OWING ON A GIVEN PIECE OF REAL PROPERTY, WHILE NOT LISTED AS A FINANCE CHARGE, IS ACTUALLY ONE AND, AS SUCH, IS NOT REIMBURSABLE UNDER PARAGRAPH 2-6.2 OF THE FEDERAL TRAVEL REGULATIONS. COMP. GEN. 483 (1970).