B-258308 January 18, 1995

B-258308: Jan 18, 1995

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Which the record shows was a mortgage insurance premium. Baird reclaimed this fee in July 1994 and included a letter from his mortgage lender which stated that this fee was a "one-time mortgage insurance premium charged by HUD... on all FHA loans.". Baird paid was the same kind of FHA mortgage insurance premium that was involved in Bruce R. That is. It was a fee for insurance to protect the lender against possible default on the mortgage by the purchaser. While the cited decisions recognized that payment of the FHA mortgage insurance fees were requirements imposed upon the purchasers in order to obtain the loans to buy the houses. Such fees are specifically precluded Federal Travel Regulation.

B-258308 January 18, 1995

An FHA mortgage insurance premium, described on the real estate settlement statement as a "Mortgage Insurance application fee to U.S. Dept of HUD", which the record shows was a mortgage insurance premium, may not be reimbursed in connection with an employee's purchase of a house incident to his relocation because the Federal Thavel Regulation, 41 C.F.R. Sec. 302-6.2(d)(2), specffically prohibits reimbursement of this type of fee.

Mr. Lany Korn Chief, Fiscal Service Department of Veterans Affairs Alvin C. York Medical Center 3400 Lebanon Road Murfreesboro, TN 37129-1236

Dear Mr. Korn:

This further replies to your letter of August 22, 1994, reference 622/04, requesting a decision whether a fee, described on the real estate settlement statement as a "Mortgage Insurance application fee to U.S. Dept. of HUD", may be reimbursed in connection with Mr. Darrell Baird's purchase of a house incident to his relocation. The fee may not be reimbursed.

When Mr. Baird applied for reimbursement of the fee quoted above, the Loan Guaranty Officer of the Regional Office, Department of Veterans Affairs, denied reimbursement because it did "not appear to be an application fee and, consequently, would not be a reimbursable charge." Mr. Baird reclaimed this fee in July 1994 and included a letter from his mortgage lender which stated that this fee was a "one-time mortgage insurance premium charged by HUD... on all FHA loans."

We conclude that the fee Mr. Baird paid was the same kind of FHA mortgage insurance premium that was involved in Bruce R. Wheeler, B-249621, Jan. 19,1993; and Rosemary Pappas and Richard L. Grubaugh, B-226010, Nov. 30,1987, copies enclosed. That is, it was a fee for insurance to protect the lender against possible default on the mortgage by the purchaser.

While the cited decisions recognized that payment of the FHA mortgage insurance fees were requirements imposed upon the purchasers in order to obtain the loans to buy the houses, such fees are specifically precluded Federal Travel Regulation, 41 C.F.R. Sec. 302-6.2(d)(2). For the same reason, payment may not be allowed on Mr. Baird's reclaim for reimbursement of the mortgage insurance premium fee he paid at settlement for the purchase of his house.