A transferred employee may have received a reduced rate on his purchase of mortgagee's title insurance because it was purchased in conjunction with an owner's title insurance policy. If the employee can provide clear evidence that this was the case. The employee is entitled to reimbursement of an amount equal to the charge for the mortgagee's title insurance if purchased separately since that amount reflects the costs of title search and other costs properly reimbursable in connection with mortgagee's title insurance. Is considered a finance charge under Regulation Z and is specifically precluded from reimbursement under the Federal Travel Regulations (FTR). The agency was not in error when it allowed reimbursement of 1 percent loan origination fee.
B-233806, Nov 16, 1989
CIVILIAN PERSONNEL - Relocation - Temporary quarters - Actual subsistence expenses - Reimbursement - Amount determination DIGEST: 1. A transferred employee reclaims amount of subsistence expenses disallowed by his agency as unreasonable in accordance with the Federal Travel Regulations and Department of Agriculture statistics for grocery expenses for the size of the employee's family. To the extent that the employee can present specific evidence showing that he ate some meals in restaurants and their costs, the agency should re-evaluate his claim based on a determination of the reasonable cost of restaurant meals in the area. CIVILIAN PERSONNEL - Relocation - Residence transaction expenses - Property titles - Insurance premiums - Reimbursement 2. In obtaining the title insurance necessary to secure financing for a new residence, a transferred employee may have received a reduced rate on his purchase of mortgagee's title insurance because it was purchased in conjunction with an owner's title insurance policy. If the employee can provide clear evidence that this was the case, the employee is entitled to reimbursement of an amount equal to the charge for the mortgagee's title insurance if purchased separately since that amount reflects the costs of title search and other costs properly reimbursable in connection with mortgagee's title insurance. CIVILIAN PERSONNEL - Relocation - Residence transaction expenses - Mortgage insurance - Reimbursement 3. A transferred employee claims reimbursement for a mortgage insurance premium required by the lender to protect against default and paid at settlement on purchase of a residence at his new duty station. Reimbursement for mortgage insurance, as distinguished from mortgage title insurance, is considered a finance charge under Regulation Z and is specifically precluded from reimbursement under the Federal Travel Regulations (FTR), paras. 2-6.2d(2)(a) and (e). CIVILIAN PERSONNEL - Relocation - Residence transaction expenses - Loan origination fees - Reimbursement - Amount determination 4. The agency was not in error when it allowed reimbursement of 1 percent loan origination fee, based upon the loan amount, in connection with the purchase of a residence at the employee's new duty station. The employee did not present evidence indicating that the higher rate he was charged did not include prepaid interest, points, or a mortgage discount and that it is the customary rate in the area, as required by FTR, para. 2-6.2d(1)(b). CIVILIAN PERSONNEL - Relocation - Travel expenses - Privately-owned vehicles - Multiple vehicles 5. Where the use of no more than one privately-owned automobile is allowable under the FTRs except for certain specifically described reasons, and the reason given by the employee for needing a second vehicle is not one of those listed in FTR, para. 2-2.3e, there was no basis to authorize an allowance for the second car and the travel orders doing so were erroneous. CIVILIAN PERSONNEL - Relocation - Travel expenses - Privately-owned vehicles - Mileage 6. Where the use of a privately-owned automobile is determined to be advantageous to the government for permanent change-of-station travel, mileage reimbursement is limited to the cost by the usually traveled route between the employee's old and new official stations, which distance is generally derived from the standard highway mileage guides. FTR, paras. 1-4.1b and 2-2.2a.
The issues in this case concern whether Mr. Aaron Lebowitz, a Social Security Administration employee, may be reimbursed for various travel and relocation expenses in connection with a permanent change-of station move. /1/
Temporary Quarters Subsistence Expenses
Mr. Lebowitz and his spouse were authorized temporary quarters subsistence expenses for a 120-day period and rented a furnished apartment at the new duty station pending location of a permanent residence. The apartment had cooking facilities but a minimum of cooking utensils. As a result, Mr. Lebowitz states they often ate their meals in restaurants, and Mr. Lebowitz submitted a voucher for $6,463.25 for meal expenses based on the cost of both restaurant meals and groceries. The agency allowed only $1,242.40 of the meal expenses on the basis that the amount claimed exceeded the Human Nutrition Information Service, Department of Agriculture statistics for grocery expenses for a liberal food plan for a family of two. The agency assumes that when an employee occupies lodgings with cooking facilities, he will use those facilities.
Since Mr. Lebowitz states that he and his wife often ate their meals in restaurants, reference to the Department of Agriculture statistics for groceries does not appear to be fully relevant. We are aware of no law or regulation that would preclude eating in restaurants during the occupancy of temporary quarters. See Social Security Administration Employees, B-208794, July 20, 1983; Dennis L. Kemp, B-205638, July 30, 1982. However, Mr. Lebowitz's vouchers do not adequately reflect an itemization of the expenses he actually incurred for each meal, including meals taken at restaurants, and including groceries purchased in large lots which could be prorated over the days they are used in temporary quarters. Therefore, as presently constituted, the vouchers do not support reimbursement for food and meals as subsistence expenses. Mr. Lebowitz should execute an addendum to his voucher providing the necessary information to enable the agency to determine the reasonableness of specific amounts he is claiming for meals purchased at restaurants and for groceries. To the extent that Mr. Lebowitz can present satisfactory evidence of the specific meals procured in restaurants and their costs, the agency should re-evaluate its determination of the reasonableness of his claim. Such an evaluation should include a determination of the reasonable cost of restaurant meals in the area for those days when restaurant expenses were actually incurred. See Eric E. Shanholtz, 66 Comp.Gen. 515 (1987); Thomas S. Phillips, B-233391, Oct. 4, 1989.
At the time of settlement on his home at his new duty station, Mr. Lebowitz incurred charges totaling $435.68 for title insurance. The settlement sheet provided a breakdown of this charge to show lender's coverage at $125 and owner's coverage at $310.68. The agency deducted from Mr. Lebowitz's voucher the $310.68 listed for owner's coverage based on the Federal Travel Regulations (FTR), para. 2-6.2d(2)(a) (Supp. 4, Oct. 23, 1982), incorp. by ref., 41 C.F.R. Sec. 101-7.003 (1986), which specifically lists owner's title insurance as a nonreimbursable item.
We have recognized that when the owner's title insurance and mortgagee's title insurance are purchased concurrently, the fee charged for the title search and related expenses, which is recoverable under the regulations, is often reflected in the costs of the owner's title insurance policy. Therefore, the cost of the title search and related expenses included in the charge for owner's title insurance has been allowed as a reimbursable expense, provided that a reasonable allocation could be made between the cost of the owner's insurance premium and the cost of the title search. This allocation has been accomplished by subtracting from the cost of the owner's insurance policy the cost of the mortgagee's insurance had it been purchased separately. Ivan V. Faucon, B-197523, Apr. 25, 1980. See also James R. Hladik, 66 Comp.Gen. 206 (1987), and cases cited.
The record does not show what the cost of the mortgagee's title insurance policy would have been if purchased separately. If Mr. Lebowitz can provide clear evidence that it cost more than the $125 reported to have been charged when it was purchased jointly with the owner's policy, that amount should be considered as allocable to the costs of title search, mortgagee's title insurance, and other costs properly reimbursable in connection with mortgagee's title insurance. See James R. Hladik, 66 Comp.Gen. 206, supra.
Mortgage Insurance Premium
Mr. Lebowitz is reclaiming $416 which he incurred for a mortgage insurance premium required by his mortgagee in connection with his new residence purchase.
The mortgage insurance premium, as distinguished from mortgage title insurance, insures the lender against possible default on the mortgage by the purchaser. It is considered a finance charge under Regulation Z of the Federal Reserve Board. 12 C.F.R. Sec. 226.4(b)(5) (1987). It is specifically precluded from reimbursement by FTR, paras. 2 6.2d(2)(a) and (e). See Daniel T. Mates, B-217822, June 30, 1985.
Loan Origination Fee
At the time of settlement on his new residence, Mr. Lebowitz was charged a loan origination fee in the amount of $1,456 by his mortgagee, representing 1.75 percent of his loan. The agency reimbursed Mr. Lebowitz for a 1 percent loan origination fee of $832, and Mr. Lebowitz is reclaiming the balance. FTR, para. 2-6.2d(1)(b) (Supp. 26, Nov. 25, 1987), provides that reimbursement of this fee may exceed 1 percent only if the employee shows by clear and convincing evidence that the higher rate does not include prepaid interest, points, or a mortgage discount, and that this higher rate is customarily charged in the area where the residence is located. In this case, Mr. Lebowitz did not provide an itemization of the charge. Also, he has not shown that the higher rate does not include prepaid interest, points, or a mortgage discount and that it is the customary rate in the area. Accordingly, his reimbursement was properly limited to 1 percent.
Reimbursement for Use of Second Vehicle
The travel order issued to Mr. Lebowitz authorized the use of two cars. However, when Mr. Lebowitz submitted his voucher for the expenses pertaining to both cars, the agency allowed the expenses for only one. The agency based this action upon FTR, para. 2-2.3e, which states that use of no more than one privately-owned automobile is authorized except for certain specifically described reasons. Mr. Lebowitz claims that it was necessary to take two cars because the fragile things that he was transporting could not fit into one car and could not be safely left to the household goods movers.
It is well established that travel orders may not be modified retroactively so as to increase or decrease the rights which have become fixed under the applicable statutes or regulations unless an error is apparent on the face of the order or all facts and circumstances clearly demonstrate that some provision previously determined and definitely intended has been omitted through error or inadvertence in preparing the orders. See Lieutenant Colonel J. H. Champion, B-199464, Aug. 29, 1980, and cases cited. Here, para. 2-2.3e prohibits the use of more than one privately-owned vehicle unless specified circumstances are present. See 54 Comp.Gen. 301 (1974); Fuller C. Jones, Jr., B-224660, Mar. 14, 1988. Since using a second vehicle to transport breakable objects is not one of those circumstances, there was no basis to authorize an allowance for the second car and the travel orders were erroneous. Accordingly, Mr. Lebowitz may not be reimbursed for the use of his second automobile.
Relocation Travel - Most Direct Route
Mr. Lebowitz claimed mileage reimbursement for use of his two automobiles at $217.60 per car representing 1,280 miles from Baltimore, Maryland, to Naples, Florida. The agency reduced this amount to $180.88 for one car based on the official Highway Mileage Guide which shows the mileage between Baltimore and Naples to be 1,064 miles.
Allowable costs for relocation travel are generally limited to the costs of travel by the most direct route from the old to the new station by the mode of travel authorized. FTR, para. 2-2.2a; Katharine B. Gebbie, B-227382, Apr. 8, 1988. The agency's use of the Highway Mileage Guide to determine the most direct route appears to be proper under FTR, para. 1-4.1b, which provides that the distances between the points traveled shall be as shown in standard highway mileage guides, and any substantial deviations from the standard distance as shown by actual odometer readings must be explained. Since the record does not indicate that Mr. Lebowitz submitted actual odometer readings along with an explanation of the 216- mile discrepancy, the agency appropriately reduced the mileage reimbursement.
/1/ The matter was submitted for our decision by the Director, Division of Finance, Social Security Administration, Department of Health and Human Services.