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B-125868, MAR. 30, 1956

B-125868 Mar 30, 1956
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TO 525 MAIN STREET CORPORATION: REFERENCE IS MADE TO LETTER OF JANUARY 4. WAS INCLUDED IN THE INSTALLMENT PAYMENT SCHEDULED FOR APRIL 15. WHICH WAS PAID ON MAY 10. THE INTEREST INCLUDED THEREIN WAS COMPUTED ON THE UNLIQUIDATED BALANCE FOR THE "QUARTER -ANNUALLY" PERIOD ENDING JULY 15. IN THE REQUEST FOR REVIEW IT IS STATED THAT "THE CLAIM IS ADVANCED UPON THE BASIS THAT A PENALTY SHOULD NOT BE INFLICTED WHEN NO DEFAULT EXISTS. - DISREGARDING THE TERMS OF THE CONTRACT MADE APPLICABLE BECAUSE OF THE ACTUAL DATE UPON WHICH THE PREPAYMENT WAS ACCOMPLISHED. YOU MADE A FINAL PAYMENT BEFORE THE DUE DATE WHICH WAS OFFICIALLY ACCEPTED IN SATISFACTION OF THE FULL AMOUNT OF THE MORTGAGE. WAS COMPUTED IN STRICT COMPLIANCE WITH THE TERMS OF THE MORTGAGE AGREEMENT AND AS SUCH REPRESENTS AN OBLIGATION ASSUMED THEREUNDER BY YOU.

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B-125868, MAR. 30, 1956

TO 525 MAIN STREET CORPORATION:

REFERENCE IS MADE TO LETTER OF JANUARY 4, 1956, FROM YOUR ATTORNEY, REQUESTING REVIEW OF SETTLEMENT DATED DECEMBER 20, 1955, WHICH DISALLOWED YOUR CLAIM FOR REFUND OF $1,488.50, REPRESENTING INTEREST INCLUDED IN YOUR FINAL PAYMENT OF MAY 10, 1955, ON THE MORTGAGE HELD BY THE GENERAL SERVICES ADMINISTRATION ON PROPERTY LOCATED AT BELLEVILLE, NEW JERSEY.

THE SUBJECT MORTGAGE REQUIRED THE PAYMENT OF INSTALLMENTS AND INTEREST QUARTER ANNUALLY AND PERMITTED PAYMENTS OF PRINCIPAL IN ADDITION TO SCHEDULED INSTALLMENT AMOUNTS ON ANY INSTALLMENT PAYMENT DATE, WITHOUT PREMIUM OR PENALTY. HOWEVER, IT FURTHER PROVIDES THAT SUCH ADDITIONAL PAYMENTS SHALL NOT DEFER THE DUE DATES NOR REDUCE THE AMOUNT OR AMOUNTS OF ANY INSTALLMENT PAYMENT. THE ADDITIONAL PAYMENT, TOGETHER WITH THE INTEREST IN QUESTION, WAS INCLUDED IN THE INSTALLMENT PAYMENT SCHEDULED FOR APRIL 15, 1955, BUT WHICH WAS PAID ON MAY 10, 1955, THE AMOUNT THEN PAID INCLUDING THE ENTIRE UNLIQUIDATED BALANCE OF THE NOTE. THE INTEREST INCLUDED THEREIN WAS COMPUTED ON THE UNLIQUIDATED BALANCE FOR THE "QUARTER -ANNUALLY" PERIOD ENDING JULY 15, 1955, AND, AS SUCH, IN NOWISE CONSTITUTES ANY BREACH OF THE TERMS OF THE CONTRACT.

IN THE REQUEST FOR REVIEW IT IS STATED THAT "THE CLAIM IS ADVANCED UPON THE BASIS THAT A PENALTY SHOULD NOT BE INFLICTED WHEN NO DEFAULT EXISTS," INDICATING THAT THE MORTGAGOR'S RESPONSE TO THE PREPAYMENT REQUEST CONTAINED IN THE ADMINISTRATIVE LETTER DATED APRIL 5, 1954, SHOULD, IN GOOD PRACTICE, RELIEVE ANY OBLIGATION FOR INTEREST ACCRUING BEYOND THE ACTUAL DATE OF PAYMENT--- DISREGARDING THE TERMS OF THE CONTRACT MADE APPLICABLE BECAUSE OF THE ACTUAL DATE UPON WHICH THE PREPAYMENT WAS ACCOMPLISHED. THEREFORE, FOR YOUR OWN ACCOMMODATION, AND FOR OTHER PERSONAL REASONS INDICATED IN YOUR ATTORNEY'S LETTER DATED NOVEMBER 8, 1954, TO THE ADMINISTRATIVE OFFICE, YOU MADE A FINAL PAYMENT BEFORE THE DUE DATE WHICH WAS OFFICIALLY ACCEPTED IN SATISFACTION OF THE FULL AMOUNT OF THE MORTGAGE, INTEREST UNDER THE TERMS OF WHICH REQUIRED COMPUTATION TO INCLUDE THE NEXT INSTALLMENT DUE DATE, OR JULY 15, 1955. THE AMOUNT PAID AS INTEREST IN YOUR FINAL SETTLEMENT OF MAY 10, 1955, WAS COMPUTED IN STRICT COMPLIANCE WITH THE TERMS OF THE MORTGAGE AGREEMENT AND AS SUCH REPRESENTS AN OBLIGATION ASSUMED THEREUNDER BY YOU. AS YOU WERE ADVISED IN THE SETTLEMENT, YOU HAVE NOT FURNISHED ANY EVIDENCE TO SHOW THAT THERE WAS ANY AGREEMENT TO VARY THE TERMS OF THE NOTE. WHILE YOU CONSTRUE THE LETTER OF APRIL 5, 1954, TO THE FADA RADIO AND ELECTRIC COMPANY AS A DEMAND FOR PREPAYMENT OF THE BALANCE DUE ON THE INVOLVED NOTE, AN EXAMINATION OF THE CONTENTS OF THAT LETTER DISCLOSES--- AND IT IS ADMINISTRATIVELY REPORTED--- THAT THE OPPORTUNITY FOR PREPAYMENT WAS PROVIDED FOR MORTGAGORS PRIOR TO THE TIME THAT THE GOVERNMENT WAS CONSIDERING PLANS FOR THE DISPOSITION OF ITS MORTGAGE PORTFOLIO. ALSO, IT IS ADMINISTRATIVELY REPORTED THAT THERE WAS "NO AGREEMENT TO FORGIVE INTEREST.'

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