Request for Reimbursement of Liability Fee

GAO was requested to determine if a Federal employee may be reimbursed for the cost of a release of liability fee paid in connection with the sale and purchase of residences at his old and new official duty stations. The question was whether the release of liability fee should be considered a finance charge under applicable regulations, in which case it would not be a reimbursable expense. Also for consideration was whether this fee could be considered a miscellaneous expense which is reimbursable according to applicable regulations. GAO determined that a release of liability fee was not a finance charge because the release provided additional protection to the lending institution. Applicable regulations do not preclude reimbursement for this fee under miscellaneous expenses. GAO likened the fee charged for obtaining the release from liability with the premium paid for a mortgage title policy. GAO has held that a mortgage title policy which is purchased primarily for the protection of the lender is reimbursable under applicable regulations. Accordingly, the employee was entitled to reimbursement.