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Request for Real Estate Expenses Loan Origination Fee

B-197366 Apr 28, 1980
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Highlights

An agency requested advice regarding the propriety of certifying for payment a reclaim voucher in favor of an employee. The reclaim voucher represented a loan origination fee incurred for the purchase of a residence pursuant to the employee's permanent change of station. The agency initially denied the claim on the basis of a prior decision which held that a loan origination charge was no longer a reimbursable item under authority of the Federal Travel Regulations. The employee contended that a letter from the lending bank stipulated that the charge was a service fee for the processing of a mortgage loan and not interest or a part of any finance charge. GAO noted that the letter from the bank specifically stated that the disputed amount was a loan origination fee since it stated that the loan origination fee was also called a service fee. It has been held that a loan origination fee which covers internal and administrative costs without any further itemization is not reimbursable because it is regarded as a finance charge under the Federal Travel Regulations. Accordingly, the voucher was not authorized for payment.

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