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B-226010 1 (1987-11-30)

handle is hein.gao/gaobadmxr0001 and id is 1 raw text is: The Comptroller General of the United States Washington, D.C. 20548 Decision Matterof- Rosemary Pappas and Richard L. Grubaugh - Real Estate Expenses - Mortgage Insurance File: B-226010 Date: November 30, 1987 DIGEST Two transferred employees claim reimbursement for mortgage insurance they were required to pay at settlement to protect against default on FHA-insured loans. Reimbursement of this type of charge is specifically precluded by Federal Travel Regulations (FTR) para. 2-6.2d(2)(a). In addition, mortgage insurance, to the extent it is deemed a financing charge incident to the securing of a mortgage loan, may not be reimbursed under FTR para. 2-6.2d(2)(e). DECISION This decision is in response to a request from an Authorized Certifying officer, Central Region of the Internal Revenue Service (IRS), Department of the Treasury. It involves the entitlement of two employees to be reimbursed mortgage insurance expenses incident to permanent changes of station. We hold that they may not be reimbursed for the following reasons. BACKGROUND The first employee, Ms. Rosemary Pappas, was transferred from New York, New York, to Covington, Kentucky, effective December 12, 1985. The second employee, Mr. Richard L. Grubaugh, was transferred from Grand Junction, Colorado, also to Covington, Kentucky, effective November 12, 1985. Incident to those transfers, Ms. Pappas purchased a residence in Lakeside Park, Kentucky, and Mr. Grubaugh purchased a residence in Cincinnati, Ohio. Both secured Federal Housing Administration (FHA) financing, and in connection with that financing, they were required to purchase FHA mortgage insurance to protect the lender in case of default. The cost of mortgage insurance, $2,084.30 for Ms. Pappas, and $2,774.30 for Mr. Grubaugh, was disallowed by the agency. on reclaim, the employees

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