Board of Contract Appeals
                    General Services Administration
                         Washington, D.C. 20405
 
 
 
                                                                     
                                
 
                            October 14, 1999
                                                                     
                              
 
 
                            GSBCA 15077-RELO
 
 
                    In the Matter of JOSEPH THOMPSON
 
 
        Joseph Thompson, Alexandria, VA, Claimant.
 
        Jeanette Bushner, Chief, Travel Section, Financial  Services
   Center, Department of Veterans Affairs, Austin, TX, appearing for
   Department of Veterans Affairs.
 
   GOODMAN, Board Judge.
 
        Claimant, Joseph Thompson  is an employee of  the Department
   of   Veterans  Affairs.  In  November  1997,  he  accomplished  a
   permanent change of station (PCS) move from New York to Virginia.
   The  agency denied reimbursement  of a document  preparation fee,
   $195; tax service fee, $67; and underwriting  fee, $135, incident
   to the purchase  of a  new home at  claimant s new duty  station.
   Claimant  has  requested  review  of  the  agency  determinations
   denying  reimbursement of  these  expenses.    As  stated  below,
   claimant is not entitled to reimbursement of these expenses.
 
   Document Preparation Fee
 
        The document  preparation fee  was charged  by the  mortgage
   company for preparation of closing documents.   Claimant was also
   charged a "loan origination fee" equal to one percent of the loan
   amount.  The agency reimbursed claimant  for the loan origination
   fee but denied his claim for the document preparation fee. 
 
 
        When  a  federal  agency  transfers  an  employee  from  one
   official duty station  to another, the  agency may reimburse  the
   employee  for  expenses  the  employee  is  required  to  pay  in
   connection with the  purchase of a residence at  the new official
   duty station.   5 U.S.C.    5724a(a)(4)  (1994).  This  statutory
   provision is implemented in the Federal Travel Regulation (FTR).
 
        The regulations permit reimbursement  of a loan  origination
   fee.  A loan origination  fee is "a fee  paid by the borrower  to
   compensate the  lender for administrative type  expenses incurred
   in originating  and processing a  loan."  41 CFR  302-6.2 (1997).
   Under  this definition, the fee  necessarily includes the cost to
   the lender  of preparing the  documents necessary for  closing on
   the    loan.[foot #] 1           Reimbursement    for    a   loan
   origination fee  is limited to  a maximum  of one percent  of the
   loan amount,  unless the employee  shows by clear  and convincing
   evidence  that: (a)  the  higher rate  does  not include  prepaid
   interest, points, or a mortgage discount; and (b) the higher rate
   is customarily  charged in the  locality where  the residence  is
   located.  Id. Because claimant has not made the required showing,
   he may not be  reimbursed for an amount in excess  of one percent
   of the  loan  amount.   He has  already been  reimbursed in  that
   amount.   Accordingly,  the agency  correctly  determined not  to
   reimburse claimant for the document preparation fee.  See,  e.g.,
   John P. Kemp, GSBCA  14335-RELO, 98-2 BCA   29,751.
    
   Tax Service Fee and Underwriting Fee
 
        The tax  service  fee and  underwriting  fee are  listed  on
   claimant's settlement statement under the heading  "Items Payable
   In  Connection With  Loan."    The  FTR provides  that  an agency
   cannot reimburse  an  employee for  any  "fee, cost,  charge,  or
   expense determined to be  part of the finance charge under  . . .
   Regulation  Z issued  by the  Board of  Governors of  the Federal
   Reserve Board." 41  CFR 302-6.2(d)(2)(v).  Regulation  Z explains
   that a finance charge is one that is imposed by a creditor "as an
   incident to or a condition of  the extension of credit."  12  CFR
   226.4(a).   Claimant  states that  the loan  would not  have been
   approved if I  had not  agreed to  the terms of  the loan,  which
   required payment of all settlement  fees.   These items for which
   claimant seeks  reimbursement were  incident to  an extension  of
   credit  and  are,   therefore,  finance   charges  according   to
   Regulation Z.   Because  the FTR provides  that an  agency cannot
   reimburse an employee for a  finance charge, the agency correctly
   determined not to reimburse claimant  for the tax service fee and
   underwriting fee.  See, e.g. S.K. Datta, GSBCA 13888-RELO,   97-1
   BCA   28,929.
    
 
          
                            ______________________________
                            ALLAN H. GOODMAN
                            Board Judge
 
                                                                    
                   ----------- FOOTNOTE BEGINS ---------
 
        [foot #] 1 Under  section 302-6.2(c)  of  the FTR,  entitled
   Legal  and Related  Expenses, costs  for  "preparing conveyances,
   other instruments, and  contracts" are specifically  reimbursable
   under certain circumstances.  These are generally fees charged by
   a  lawyer or  title  company, rather  than  by the  lender.   The
   document  preparation fee  claimed by  claimant was  paid  to the
   lender, not to an attorney or title company.