Board of Contract Appeals
                    General Services Administration
                         Washington, D.C. 20405
 
                          ____________________
 
                             March 12, 1999
                         _____________________
 
 
                            GSBCA 14787-RELO
 
 
                 In the Matter of JUDITH C. ROTHSCHILD
 
 
        Judith C. Rothschild, Rising Sun, MD,  Claimant.
 
        Janet  R. Wise,  Chief, Civil  Law Division,  Office of  the
   Chief Counsel and Staff  Judge Advocate, Department of  the Army,
   Aberdeen  Proving Ground,  MD, appearing  for  Department of  the
   Army.
 
   PARKER, Board Judge.
 
        When  Judith C.  Rothschild purchased a  new home  in Rising
   Sun, Maryland  after being transferred there by the Department of
   the Army, the lender did something she did not expect.  According
   to  the settlement  sheet, a  loan origination  fee equal  to one
   percent of the loan amount was paid by something called a "lender
   credit."  To make up for this lender credit, which Ms. Rothschild
   had  not asked  for  in the  first place,  the lender  raised the
   interest rate on her loan.   In other words, the lender paid  its
   own loan  origination  fee and  charged Ms.  Rothschild for  this
   amount through an increase in the interest rate of the loan.  Ms.
   Rothschild believes that the Army  was wrong in denying her claim
   for reimbursement  of the  phantom loan  origination fee  and has
   asked the Board to review the Army's decision.
 
        The  Army's decision  not to  reimburse  Ms. Rothschild  was
   correct.    Under   the  Joint  Travel  Regulations   (JTR),  the
   regulations  that  govern travel  and  relocation  allowances for
   civilian  employees  of   the  Department  of  Defense,   a  loan
   origination  fee (which  is reimbursable)  is  "a fee  paid by  a
   borrower to compensate a  lender for administrative-type expenses
   incurred   in  originating   and  processing   a   loan."     JTR
   C14002(A)(4)(a)(2).     The  settlement  sheet  shows   that  Ms.
   Rothschild  did  not  pay  such  a  fee  here; she  will  pay  an
   equivalent  amount  in  interest  over  the  term  of  the  loan.
   Interest  paid on  a loan,  however,  is not  reimbursable.   JTR
   C14002(A)(4)(b)(2).  Although we understand that  the transaction
   was not structured as Ms. Rothschild intended,  the Government is
   not  authorized to reimburse  its employees for  the hypothetical
   expenses of  a transaction that parties may have contemplated but
   did not actually  make.  Harlan C. Theil,  GSBCA 13668-RELO, 97-1
   BCA    38,710.  In the transaction  at issue here, Ms. Rothschild
   did not pay a loan origination  fee.  Accordingly, her claim must
   be denied.
 
 
        There is another reason that  Ms. Rothschild's claim must be
   denied.  Even  if the increased amount of  interest could somehow
   be viewed  as a loan  origination fee,  that amount will  be paid
   over the life of the loan.  There is no authority for the Army to
   reimburse  Ms. Rothschild  for an  expense that  she has  not yet
   paid.
 
 
 
                                      _____________________
                                      ROBERT W. PARKER
                                      Board Judge