B-168384, FEB. 3, 1970
Highlights
SUBSEQUENT TO TIME ITEM WAS NO LONGER REIMBURSABLE MUST BE REGARDED AS PRECLUDING REIMBURSEMENT. AS YOU STATE THE DISALLOWANCE WAS MADE BECAUSE (1) THE APPLICABLE REGULATION. PROHIBITS THE REIMBURSEMENT OF EXPENSES WHICH ARE DETERMINED TO BE PART OF THE FINANCE CHARGES UNDER THE TRUTH IN LENDING ACT. YOU ARE OF THE OPINION THAT YOU INCURRED THE $300 EXPENSE FOR THE LOAN ORIGINATION FEE ON MAY 22. SINCE THAT WAS THE DATE YOU CONTRACTED TO BUY THE HOUSE AND PLACED $1. WE HELD THAT THERE WAS NO BASIS UPON WHICH REIMBURSEMENT OF THE LOAN ORIGINATION FEE COULD BE MADE. THE BASIS FOR THAT HOLDING WAS THAT THE LOAN ORIGINATION FEE EXPENSE WAS INCURRED AT THE TIME OF SETTLEMENT AND NOT UPON THE SIGNING OF THE AGREEMENT FOR THE PURCHASE OF THE REAL ESTATE. 47 COMP.
B-168384, FEB. 3, 1970
CIVIL PAY--TRANSFERS--LOAN ORIGINATION FEE DECISION AFFIRMING DECISION TO CLAIMANT OF JANUARY 6, 1970, DISALLOWING LOAN ORIGINATION FEE INCIDENT TO FOREST SERVICE EMPLOYEE'S TRANSFER. WHERE NO EVIDENCE HAS BEEN SHOWN THAT EMPLOYEE INCURRED EXPENSE OF LOAN ORIGINATION FEE AT TIME HE CONTRACTED TO BUY HOME AT NEW STATION, PAYMENT OF LOAN ORIGINATION FEE AT TIME OF SETTLEMENT IN SEPTEMBER 1969, SUBSEQUENT TO TIME ITEM WAS NO LONGER REIMBURSABLE MUST BE REGARDED AS PRECLUDING REIMBURSEMENT.
TO MR. MICHAEL D. DUFFY:
YOUR LETTER OF JANUARY 14, 1970, SEEKS A RECONSIDERATION OF OUR DECISION OF JANUARY 6, 1970, WHICH DISALLOWED THE LOAN ORIGINATION FEE OF $300 AS AN ITEM OF REIMBURSABLE REAL ESTATE EXPENSE INCIDENT TO YOUR CHANGE OF OFFICIAL DUTY STATION AS AN EMPLOYEE OF THE FOREST SERVICE.
AS YOU STATE THE DISALLOWANCE WAS MADE BECAUSE (1) THE APPLICABLE REGULATION, BUREAU OF THE BUDGET CIRCULAR NO. A-56 AS REVISED JUNE 26, 1969, PROHIBITS THE REIMBURSEMENT OF EXPENSES WHICH ARE DETERMINED TO BE PART OF THE FINANCE CHARGES UNDER THE TRUTH IN LENDING ACT, AND (2) YOU DID NOT INCUR THE EXPENSE UNTIL SEPTEMBER 10, 1969, THE DATE OF SETTLEMENT.
YOU ARE OF THE OPINION THAT YOU INCURRED THE $300 EXPENSE FOR THE LOAN ORIGINATION FEE ON MAY 22, 1969, SINCE THAT WAS THE DATE YOU CONTRACTED TO BUY THE HOUSE AND PLACED $1,000 AS A DEPOSIT.
WE HAD A SIMILAR SITUATION IN OUR DECISION B-168490, JANUARY 5, 1970, COPY ENCLOSED. IN THAT CASE ONE OF THE CLAIMANTS SIGNED A CONTRACT TO PURCHASE A RESIDENCE ON JUNE 12, 1969, WITH SETTLEMENT MADE ON JULY 18, 1969. WE HELD THAT THERE WAS NO BASIS UPON WHICH REIMBURSEMENT OF THE LOAN ORIGINATION FEE COULD BE MADE. THE BASIS FOR THAT HOLDING WAS THAT THE LOAN ORIGINATION FEE EXPENSE WAS INCURRED AT THE TIME OF SETTLEMENT AND NOT UPON THE SIGNING OF THE AGREEMENT FOR THE PURCHASE OF THE REAL ESTATE. 47 COMP. GEN. 792. NO EVIDENCE HAS BEEN PRESENTED INDICATING THAT YOU INCURRED THE LOAN ORIGINATION FEE EXPENSE PRIOR TO THE DATE OF SETTLEMENT.
ALTHOUGH A COPY OF YOUR SETTLEMENT STATEMENT IS NOT BEFORE US, A REVIEW OF IT SHOULD SHOW THAT YOUR SETTLEMENT COSTS, INCLUDING THE LOAN ORIGINATION FEE, ARE IN ADDITION TO THE SALES PRICE OF $37,350 WHICH INCLUDES YOUR $1,000 DEPOSIT.
WE CAN ONLY CONCLUDE THAT ON THE RECORD THE DISALLOWANCE OF THE LOAN ORIGINATION FEE IN OUR DECISION OF JANUARY 6 WAS PROPER. THE COPY OF YOUR SALES CONTRACT IS RETURNED.