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B-194892 1 (1980-03-14)

handle is hein.gao/gaobadibx0001 and id is 1 raw text is: - 21 C DEISION oo THE COMPTROLLER GENERAL . ._ OF THE UNITEO STATES WASHINGTON, D.C. 20549 MA T B- 4892 Dn F R r PreymL e Pnl MATTER OF: Donal F. Reynolds - ortgage Prepayment Penal t y DIGEST: Although prepayment penalty clause was not in security instrument, Government employee who incurred mortgage prepayment penalty when he sold his residence in connection with permanent change of station may be reimbursed in amount equal to 180 days' interest on loan balance at time of sale. Verbal agreement concerning pre- payment penalty, which was made at time of pur- chase, may be considered to be incorporated in security instrument since it was inadvertently omitted from that instrument but reduced to writing several months before subsequent sale of residence. L7 W. D. Moorman, an authorized certifying officer of the Department of Agriculture, requests our decision as to whether a voucher representing a mortgage prepayment penalty may be certified for payment as a relocation expense. Mr. Donald F. Reynolds, a Department of Agriculture employee, claims a mortgage prepayment penalty of $1,502.51, incurred when he sold his residence in connection with a permanent change of stat . The penalty pr vi io ws no contained in the mortgag ocument itself. . G 9 sate that a verbal agreement concerning penalties was made at the time of sale but was inadvertently omitted from the documents of saley, His verbal agreement was embodied in a written agree- ment e/ecuted approximately 7 months after the date of sale. The agreement specified the following penalty for prepaying the obligation: When the amount prepaid during any one year equals or exceeds 20% of the original principle sig7 amount of the loan, 180 days of interest on the amount prepaid shall be charged. The $1,502.51 penalty paid by Mr. Reynolds was calculated according to the above formula. r-1 A P * M 11 1/1 10Q() 9C ob L T.

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