Request for Reconsideration

A transferred employee requested reconsideration of the denial of his claim for reimbursement of a loan origination fee incurred incident to his purchase of a residence upon the transfer of his official duty station. The employee claimed that the fee represented the mortgage company's charge for processing his loan and was not considered discount points. GAO held that such a fee, which varies in total amount in direct proportion to the amount borrowed, is more in the nature of a charge for the hire of money than reimbursement for administrative costs of processing the loan. Under Federal Travel Regulations, reimbursement of expenses incurred in the sale or purchase of a house depends on whether that expense is a finance charge as defined in the Truth Lending Act. Service charges imposed in connection with the extension of credit are specifically listed as finance charges under the Truth in Lending Act, and there is no exception for loan origination fees. Accordingly, the action of the Claims Division in denying reimbursement of the loan origination fee was sustained.