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B-228691 1 (1988-09-21)

handle is hein.gao/gaobadnfl0001 and id is 1 raw text is: The Comptroller General of the United States Washingon, D.C. 20548 Decision Matterof. Gary A. Ditch - Loan Origination Fee File: B-228691 Date: September 21, 1988 DIGEST A transferred employee who purchased a residence in December 1986 at his new duty station claims reimbursement for a 3 percent loan origination fee. The employing agency disallowed the entire fee on the ground it was a nonreimbur- sable finance charge. Since the loan origination fee includes points and a discount, we agree that the full 3 percent may not be reimbursed, but we allow a 1 percent fee as a customary charge in the area. DECISION Mr. Joseph N. Smith, Finance and Accounting Officer, Corps of Engineers, Department of the Army, has requested an advance decision as to whether a $3,024 fee, representing 3 percent of the amount of a mortgage, paid by Mr. Gary A. Ditch, an employee of the agency, may be reimbursed as a loan origination fee. For the reasons stated in this decision, reimbursement for this fee may be authorized only for 1 percent of the mortgage amount. BACKGROUND In December 1986, Mr. Gary A. Ditch submitted a final voucher to the Corps of Engineers in connection with a permanent change of station from St. Paul, Minnesota, to Chicago, Illinois. The voucher included a request for reimbursement of a $3,024 fee associated with the mortgage on his new residence in Naperville, Illinois, a suburb of Chicago. The real estate closing was held December 5, 1986. The fee represented 3 percent of a conventional loan of $100,800. The settlement statement for the loan lists the $3,024 as a loan origination fee. However, in a letter dated December 18, 1986, an officer of the lending institu- tion stated that the $3,024 represented a commitment fee and was used to commit the rate for 75 days and also to adjust the yield on the loan. In light of this, the agency 09-3/21Co

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