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B-202594 1 (1981-09-29)

handle is hein.gao/gaobadjtp0001 and id is 1 raw text is: B-202594 e COMPTROLLER GENERAL OF THE UNITEO STATES WASHINGTON, 0.C. 20548 DATE: September 29, 1981 MATTER DIGEST: OF: Hyrum B. Johnson - Sale of Residence - Warehousing Fee Employee may not be reimbursed for warehousing fee charged by mortgage company in connection with the sale of his residence upon transfer. Warehousing fee is a mortgage discount charged to seller to defray cost to mortgage company of carrying loan until it is sold to a permanent investor. Appli- cable regulation specifically prohibits reimburse- ment of mortgage discounts. An authorized certifying officer at the Department of Agriculture's National Finance Center requested an advance decision as to whether payment may be made on the voucher of Hyrum B. Johnson for reimbursement of a warehousing fee charged in connection with the sale of his residence upon transfer. For the reasons stated herein we find that a warehousing fee is not an allowable expense under the Federal Travel Regulations (FPMR 101-7, May 1973). Mr. Johnson, a Department of Agriculture employee, was authorized a permanent change of duty station from Riverside, California, to Temple, Texas. In connection with this transfer Mr. Johnson sold his residence at his old duty station. At the time of settlement Advance Mortgage Corporation charged Mr. Johnson, the seller, a warehousing fee of $150. It is the propriety of reim- bursing this charge for which the certifying officer has requested an advance decision. The mortgage corporation advises that the warehousing fee is a charge paid by the seller to cover the carrying cost incurred by the mortgagor while temporarily warehousing a Federal Housing Administration or Veterans Administration backed mortgage until its transfer to a permanent investor. The fee covers the interest on a portion of the mortgage lost by the mortgage company between the time a loan is made and the time at which the mortgage is sold to the permanent investor. The loss occurs because the mortgage company initially borrows the money released to a seller at settlement at commercial rates which carry a higher interest than the mortgage instrument. Thus, a warehousing fee is a discount charged to the seller. 2~z~74d DECISION FILE:

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