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B-205148 1 (1981-12-21)

handle is hein.gao/gaobadjyd0001 and id is 1 raw text is: THE COMPTROLLER GENERAL DECISION OF THE UNITED STATES WASHINGTON. D.C. 20548 FILE: B-205148 DATE: December 21, 1981 MATTER OF: Harding L. Smith - Real Estate Espenses - Finance Charge DIGEST: An employee is not entitled to reimbursement of a loan closing fee paid in obtaining a loan for purchase of a residence upon trans- fer to his new duty station. The truth-in- lending statement indicates that the loan closing fee was a prepaid finance charge. Reimbursement of any costs found to be a finance charge under Regulation Z, 12 C.F.R. 226.4(2) is prohibited by FTR para. 2-6.2d. We decide in this case that the employee, Mr. Harding L. Smith, is not entitled to reimbursement of a loan closing fee for the purchase of a residence at Ord, Nebraska, where he was transferred by the Bureau of Reclamation on March 11, 1981. We agreed with the certifying officer, who states that the fee, -as verified by the lender, was a finance charge not reimburs- able under applicable regulations. Mr. Smith purchased the residence on September 2, 1981. He contends that the loan closing-fee is not a finance charge, and he is entitled to reimbursement. However, the Federal Truth-in- Lending Disclosure Statement that he was furnished by the lender characterizes the fee as a prepaid finance charge. Our records contain no information from Mr. Smith explaining why he believes the fee, which is equal to 3 percent of the amount loaned, is not a finance charge. Reimbursement of a transferred Federal employee's relocation expenses is governed by chapter 2 of the Federal Travel Regula- tions (FTR) (FPMR 101-7, May 1973). Part 6 of chapter 2 covers residence transactions. FTR para. 2-6.2d specifically precludes reimbursement of any fee, cost, charge, or expense which is determined to be a finance charge under Title I of the Truth-in Lending Act, Public Law 90-321, and Regulation Z, 12 C.F.R. 226.4, issued pursuant thereto. Costs directly or indirectly imposed by the lender on the borrower, including those to meet the lender's overhead expenses, are finance charges. Lawrence F. Roth, B-194203, May 7, 1979. We have held that a fee in the nature of a loan origination or closing fee is a finance charge within the meaning of 12 C.F.R. 226.4(a)(3). Donald L. Turley, B-204015, September 18, 1981. /j

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