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B-194298 1 (1979-08-10)

handle is hein.gao/gaobadhnc0001 and id is 1 raw text is: 4- I DECISION FILE: B- MATTER P 4- &4 //0,2 THE COMPTROLLER GENERAL OF THE UNITED STATES WASHINGTON. D.C. 20548 194298 DATE: August 10, 1979 OF: David J. Connolly -IRelocation expenses,,AVM/// 77 - mortgage prepayment penalty DIGEST: Employee incident to transfer of station sold a residence at old official station and incurred expense for prepaying mortgage. Prepayment expense is reimbursable to the extent provided in.the mortgage. A copy of the original mortgage, a receipt to the employee's selling agent showing payment of the prepayment penalty, and a copy of the settlement sheet showing the charge to the employee are sufficient evidence to document the payment. Interest on the mortgage, however, is a part of the charge by the mortgage company for carrying the loan on the residence and is not a reimbursable relocation expense. The issue in this case is whether an employee on a permanent change of station is entitled to reimbursement for a mortgage pre- payment penalty and interest on the mortgage in connection with the sale of his residence at the old duty station in the circumstances described. The answer concerning the mortgage prepayment penalty is yes. The answer on the interest is no. Mr. David J. Connolly, an employee of the Drug Enforcement Administration (DEA), Department of Justice, was transferred from Miami to St. Petersburg, Florida. Upon processing of his claim for relocation allowances concerning the sale of his residence in Miami, Florida, the mortgage prepayment penalty on the unpaid balance of $33,249.09 in the amount of $1,053.90 and an interest charge of $105.15 were disallowed by the DEA. The disallowance was based upon the failure of the employee to supply the original loan papers to substantiate the charges and the failure to supply a proper receipt of payment or cancelled check to validate the claim. Subsequent to the disallowance Mr. Connolly submitted a copy of the original recorded deed which reflects the prepayment obligation. Also submitted was a copy of a receipt showing pay- ment of $1,053.90 as a prepayment penalty by the settlement agent of Mr. Connolly to the holder of the mortgage on Mr. Connolly's residence in Miami. That receipt also reflects a charge of $52.57 for interest on the balancde of the mortgage and $52.57 /0

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