Board of Contract Appeals
                    General Services Administration
                         Washington, D.C. 20405
 
                           __________________
 
                              May 7, 1998
                           __________________
 
 
                            GSBCA 14335-RELO
 
 
                     In the Matter of JOHN P. KEMP
 
 
        John P. Kemp, Redstone Arsenal, AL, Claimant.
 
        Don  B.  Hankins,  Chief,   Legal  Services  Division,  Army
   Aviation and Missile Command, Redstone Arsenal, AL, appearing for
   Department of the Army.
 
   PARKER, Board Judge.
 
        John P. Kemp,  a civilian employee of the  Department of the
   Army, incurred a $65 fee for "document preparation" in connection
   with  the purchase  of a home.   Mr.  Kemp purchased the  home in
   Huntsville, Alabama after being transferred there from St. Louis,
   Missouri.  According  to the credit union from which the loan was
   obtained,   the  document  preparation   fee  was   charged  "for
   preparation of  numerous closing  documents."   The credit  union
   also  charged Mr.  Kemp a  "loan  origination fee"  equal to  one
   percent of the loan amount.  The Army reimbursed Mr. Kemp for the
   loan  origination  fee  but  denied his  claim  for  the document
   preparation fee.   Mr. Kemp  has asked the  Board to review  that
   denial.
 
        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)
   and the Joint Travel Regulations (JTR).
 
        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);
   JTR C14002-A.4.a.2.   Under this definition, the  fee necessarily
   includes  the  cost to  the  lender  of preparing  the  documents
 
                                                                   2
 
   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 Mr. Kemp has not  made the
   required  showing, he  may not  be  reimbursed for  an amount  in
   excess of one percent  of the loan amount.  Mr.  Kemp has already
   been reimbursed  in that amount.   Accordingly, his claim  for an
   additional $65 for a document preparation fee must be denied.
 
                                      __________________________
                                      ROBERT W. PARKER
                                      Board Judge
 
                                                                    
                   ----------- FOOTNOTE BEGINS ---------
 
        [foot #] 1 Under  section 302-6.2(c)  of  the FTR,  entitled
   Legal  and related  expenses, costs  for "preparing  conveyances,
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   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.  An example
   of such  a cost would be the $60 paid by the seller of Mr. Kemp's
   new home to  the settlement attorney for  "document preparation."
   The document preparation fee claimed by Mr.  Kemp was paid to the
   lender, not to an attorney or title company.