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News By Edition
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RESPA News Monthly Edition
RESPA News Monthly October 2023
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RESPA kickback, RICO claims leveled at Maryland mortgage servicer
Posted Date: Thursday, September 7, 2023
The U.S. District Court for the District of Maryland considered a plaintiff’s motion for class certification in a case where the mortgage servicer is being accused of violating RESPA’s kickback prohibition and the Racketeer Influenced and Corrupt Organizations Act.
The claim is based on the servicer assigning residential mortgage loans to a non-party title company in exchange for a referral fee.
Read on for more details.
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Gibson defendant settles in antitrust case
Posted Date: Monday, September 16, 2024
One of the defendants in the antitrust case filed on behalf of homesellers has filed a notice of settlement with the court, indicating the parties have come to an amicable resolution to the issue related to how real estate agents are compensated.
The relevant case was filed the same day a jury determined the National Association of Realtors’ and multiple national brokers violated antitrust laws by adhering to the trade organization’s cooperative compensation rule.
Read on for more details.
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Lewis Brisbois bolsters commercial litigation capabilities with new partner hire
Posted Date: Wednesday, September 27, 2023
Lewis Brisbois is pleased to welcome Jay Thornton to its Fort Lauderdale office as a partner in the firm’s Complex Business & Commercial Litigation, Corporate, Banking & Finance, and Labor & Employment practices.
Thornton has been litigating complex banking, labor and employment, and general commercial litigation matters for 23 years, and has successful first chair jury and non-jury trial experience in the state and federal courts on behalf of numerous institutional clients nationwide.
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RESPA News will be LIVE at Supreme Court for CFPB arguments
Posted Date: Monday, September 25, 2023
RESPA News will be in the “fly on the wall” as the Consumer Financial Protection Bureau (CFPB) makes its argument before the U.S. Supreme Court. The question being addressed: whether the bureau’s funding structure is constitutional.
Read on for more details.
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Court rules whether ‘disparate impact’ claims can be brought under FHA
Posted Date: Monday, September 25, 2023
The U.S. District Court for the District of Columbia considered a case where the U.S. Department of Housing and Urban Development’s disparate impact rule was challenged, with plaintiffs claiming the theory was not permitted under the Fair Housing Act (FHA).
The case started 10 years ago, with U.S. District Judge Richard Leon delivering a holding in 2014 stating no, disparate-impact claims are not permissible under the FHA. Since then, several changes in agency policies and a U.S. Supreme Court case caused delays in getting the matter settled.
Read on for more details.
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CFPB confirms applicability of several HUD RESPA documents
Posted Date: Monday, September 25, 2023
RESPA was established long before the Consumer Financial Protection Bureau (CFPB) was formed in 2011. Prior to its creation, RESPA was enforced by the U.S. Department of Housing and Urban Development (HUD).
Recently, the bureau published public guidance affirming the use and applicability of HUD’s interpretations, official rules, or policy statements in CFPB RESPA enforcement.
Read on for more details.
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Median sales prices continue to stay above $400K
Posted Date: Monday, September 25, 2023
The National Association of Realtors’ existing-home sales report for August showed another decrease in the month-over-month sales of existing homes.
Median existing-home prices continued to climb, resulting in the third consecutive month where the median sales price surpassed $400,000.
Read on for more of August’s housing numbers.
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Ginnie Mae updates HMBS pooling eligibility requirements
Posted Date: Monday, September 25, 2023
In hopes to reduce liquidity pressures on issuers and maintain the viability of the program, Ginnie Mae revised its home equity conversion (HECM) mortgage-backed securities (HMBS) to allow securitization of multiple participations related to a particular HECM in any one issuance month.
These changes will be effective Oct. 1.
Read on for more details.
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Agencies award $16.1 million to secure permanent housing for homeless veterans
Posted Date: Monday, September 25, 2023
The U.S. Department of Housing and Urban Development (HUD) and U.S. Department of Veterans Affairs granted $16.1 million to assist homeless veterans in securing permanent housing.
Over 70 public housing agencies received these funds to provide HUD-Veterans Affairs Supportive Housing vouchers.
Read on for more details.
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Genuine Title mentioned in another RESPA kickback case
Posted Date: Thursday, September 21, 2023
The U.S. District Court for the District of Maryland heard a motion to decertify the class in an action against The Federal Savings Bank alleging the lender participated in a kickback scheme with Genuine Title.
This is not the first case where Genuine Title has been accused of involvement in a referral agreement – earlier this year the same court heard similar claims against Eagle National Bank as part of another class action suit.
Read on for more details.
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Nationstar moves for summary judgment in RESPA case
Posted Date: Thursday, September 21, 2023
A federal district court in Oregon ruled on a summary judgment motion by Nationstar and Fannie Mae in a dispute where the borrower brought claims under RESPA, the Oregon Unlawful Trade Practices Act, and breach of contract.
The claim followed a dispute over a deferred forbearance balance.
Read on for more details.
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Riders in House bill cause concern for fair housing, affordable housing advocates
Posted Date: Thursday, September 21, 2023
Civil rights, fair housing, and affordable housing advocates voiced concerns about riders accompanying House Resolution 4366, the Military Construction, Veterans Affairs, and Related Agencies Appropriations Act, 2024.
According to these organizations, there are provisions that would prevent the U.S. Department of Housing and Urban Development from furthering fair housing, a legal requirement for the agency.
Read on for more details.
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Mild recession predicted for beginning of 2024
Posted Date: Thursday, September 21, 2023
A “modest economic contraction” is predicted for the first half of 2024, according to Fannie Mae’s Economic and Strategic Research Group. As mortgage rates hold above 7 percent and origination activity has slowed, the forecast also anticipated further headwinds for the housing market.
“The new home market, which showed surprising strength over the first half of 2023, due in part to a limited inventory of existing homes for sale, may now be taking a breather,” the group stated in its outlook.
Read on for more details.
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Reg Z threshold adjustments announced
Posted Date: Thursday, September 21, 2023
The Consumer Financial Protection Bureau made its annual threshold adjustments as required under Regulation Z, the implementing regulation for the Truth in Lending Act (TILA).
The calculation of dollar amounts for several provisions in Regulation Z is based on the annual percentage change reflected in the consumer price index as published by the Bureau of Labor Statistics and in effect on June 1. The thresholds announced here will be effective Jan. 1, 2024.
Read on to learn the new dollar amounts.
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Two major real estate companies settle antitrust suit; NAR and others still face trial
Posted Date: Monday, September 18, 2023
In a case out of the Western District of Missouri where a class action was brought against seven of the major real estate organizations in the country, two of the defendants settled the suit to avoid a trial scheduled to start Oct. 16.
The suit is over how real estate commissions are split between listing agents and buyers and may change how real estate agents and brokers do business.
Read on for more details.
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Time-to-save projections for prospective homebuyers exceed nine years
Posted Date: Monday, September 18, 2023
The Asian Real Estate Association of America’s (AREAA) white paper on housing affordability showed the steady increase in the ratio between home prices and income since the 1980s has resulted in affordability being the number one barrier to homeownership. Prospective homebuyers need to spend more time saving up for a down payment – in some markets for more than nine years.
When high costs prevent consumers from entering the housing market, they are also prevented from accruing generational wealth and can cause “negative externalities” to their communities. AREAA offered some solutions to the housing affordability crisis, such as adaptive reuse and modular homes.
Read on for more details.
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Fair housing orgs react to CFPB’s UDAAP authority ruling
Posted Date: Monday, September 18, 2023
A federal district court in Texas held the Consumer Financial Protection Bureau violated the Administrative Procedures Act by not offering an opportunity for public comment before including certain discriminatory practices under its unfair, deceptive, and abusive acts or practices authority in an updated exam manual.
The National Fair Housing Alliance and National Community Reinvestment Coalition expressed concerns about what this would mean for equity in the housing marketing going forward.
Read on for more details.
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Consumer sentiment about housing market plateaus
Posted Date: Monday, September 18, 2023
Relatively high mortgage rates, high home sale prices, and low inventory have stalled consumer sentiment about the housing market.
“Consumers remain pessimistic toward the housing market in general and homebuying conditions in particular,” Fannie Mae Senior President and Chief Economist Doug Duncan said about the survey.
Read on for more details.
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Ginnie Mae promotes broader access to mortgage financing
Posted Date: Monday, September 18, 2023
Ginnie Mae has updated its standard prospectus forms for its single-family mortgage-backed securities (MBS) so that investors may determine whether Ginnie Mae’s MBS meet requirements to be labeled “social bonds.”
The updates will increase investor awareness of the value proposition in Ginnie Mae securities, which, the company stated, will attract new sources of capital in support of the lender and borrowers it serves.
Read on for more details.
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Credit score requirement updates move forward
Posted Date: Monday, September 18, 2023
The Federal Housing Finance Agency is continuing in its stakeholder and public engagement related to the updated credit scoring models it is implementing for the Enterprises.
The credit score updates will improve accuracy and provide a more inclusive approach to evaluating borrowers, according to the agency.
Read on for more details.
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Senate subcommittee asks about housing supply in tackling affordability crisis
Posted Date: Thursday, September 14, 2023
The Senate Committee on Banking, Housing, and Urban Affairs’ Subcommittee on Housing, Transportation and Community Development heard testimony and recommendations about housing supply and innovation in efforts to address low housing inventory.
Witnesses were from the Brookings Institution, Neighbors for More Neighbors, Invest Newark, and Fading West Development.
Read on for more details.
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Mortgage subsidy fund mandated by Trident Mortgage settlement goes live
Posted Date: Thursday, September 14, 2023
The Pennsylvania attorney general has launched the $18.4 million mortgage loan subsidy fund established by Trident Mortgage Co. as part of the redlining settlement reached in 2022.
This fund provides subsidies of up to $10,000 to support new mortgages for owner-occupied homes in majority-minority neighborhoods.
Read on for more details.
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Chopra emphasizes importance of consumer protection regulations
Posted Date: Thursday, September 14, 2023
In light of the legal challenges the Consumer Financial Protection Bureau (CFPB) faces, its director, Rohit Chopra, addressed attendees of The Mortgage Collaborative National Conference on how today’s consumer regulations came to be and the potential impact should the bureau’s funding structure be found illegitimate.
He began with a reminder about what led to the 2008 market crash, and how the actions of IndyMac, a now-defunct bank, and its subprime lending practices resulted in one of the largest bank failures to be managed by the Federal Deposit Insurance Corp.
Read on for more details.
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Affordability, mortgage rates cited as barriers to homeownership in survey
Posted Date: Thursday, September 14, 2023
Most prospective homebuyers stated they had not yet bought a house because of the lack of affordable homes on the market, while others stated they are waiting for mortgage rates to drop. Some of those who responded to the National Association of Realtors survey also reported discrimination as they search for their new home.
The survey report also revealed the shopping preferences of these respondents.
Read on for more details.
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Work-from-home arrangements could improve housing affordability crisis
Posted Date: Thursday, September 14, 2023
As fully remote and hybrid work situations have been surprisingly constant since the end of the COVID-19 national emergency, a survey of renters and homeowners conducted by Fannie Mae showed how “decoupling” where people live from where they work could possibly help ease the housing affordability crisis in the U.S.
“The consistency of the percentage of people working remotely indicates to us that, despite headline-grabbing news of companies demanding that workers return to the office, so far, remote and hybrid work may be here to stay,” the company stated.
Read on for more details.
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RESPA News live at RESPRO
Posted Date: Friday, September 8, 2023
RESPA News is at the Ritz Carlton in Bachelor Gulch, Colo., for RESPRO’s RISE Conference Sept. 11-12. We’re covering discussions ranging from how states are targeting affiliated business arrangements to a fair lending update to keep our audience apprised of the hot compliance issues.
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Larger loan sizes led to ‘highest of highs’, ‘lowest of lows’
Posted Date: Friday, September 8, 2023
Research into how loan size impacts profitability for banks and independent mortgage companies showed that while mortgage lenders and servicers who made loans with higher balances during a strong market experienced the “highest of highs” in profits, they also were more likely to experience the “lowest of lows” in a weaker market than other lenders.
A white paper published by the Mortgage Bankers Association on the subject explores the cost barrier argument made by lenders when asked why fewer low balance loans were being originated despite the housing affordability crisis currently facing the U.S.
Read on for more details.
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Quality control audits for servicers highlight issues with missing documents
Posted Date: Friday, September 8, 2023
A quality control audit found one of the biggest challenges mortgage servicers dealt with in 2022 was missing documents.
Other top challenges included failing to apply payments within 24 hours of receipt, incorrect setup of hazard insurance premiums and due dates, and inefficient monitoring and delays in filing for relief from bankruptcy stays on Chapter 7 and Chapter 13 filings.
The company that did the audit suggested best practices to keep in mind as 2023 comes to a close.
Read on for more details.
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Home sales prices up 4.5 percent annually
Posted Date: Friday, September 8, 2023
As housing affordability struggles to improve, mortgage purchase application volume has hit a 28-year low and the lack of housing inventory has resulted in sales prices being up 4.5 percent annually, according to a report from Redfin.
The increase in sales prices is being further exacerbated by the supply shortage. The total number of homes on the market is down 18 percent year-over-year.
Read on for more details.
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Over $24M awarded to combat housing discrimination
Posted Date: Friday, September 8, 2023
The U.S. Department of Housing and Urban Development (HUD) awarded over $24 million to aid in the fight against housing discrimination.
The funds went to 57 organizations across the country through the Fair Housing Initiatives Program and were directed to second- and third-year multi-year grantees of the Private Enforcement Initiative.
The new funds will continue to support these organizations’ ongoing fair housing enforcement endeavors.
Read on for more details.
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Senator voices concerns over home insurance changes
Posted Date: Friday, September 8, 2023
In his opening statements before a hearing on the property insurance market and its impact on consumers, Sen. Sherrod Brown (D-Ohio), chair of the Senate Committee on Banking, Housing, and Urban Affairs, voiced his concerns about how the property insurance market is impacting consumers and their ability to afford and maintain their homes.
“Homeowners who have spent years making their payments are shocked to find that their insurer has raised costs, limited coverage, or won’t renew their policy at all,” Brown said. “Some insurers have abandoned entire markets – leaving consumers with fewer options that cost more and provide less coverage. And consumers are counting on their insurers now more than ever.”
Read on for more details.
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Delay in modification documents lead to RESPA complaint
Posted Date: Thursday, September 7, 2023
A couple who was attempting to obtain a modification for their VA-backed mortgage loan sued the lender for RESPA violations when repeated delays in providing the correct agreement and inconsistent arrearage statements prevented them from entering into a loss mitigation plan and bringing their mortgage up to date.
The homeowners also alleged damage to their credit scores and emotional distress.
Read on for more details.
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Direct endorsement approval stripped from Dallas mortgagee
Posted Date: Thursday, September 7, 2023
The U.S. Department of Housing and Urban Development announced the termination of a direct endorsement approval for a mortgagee.
Direct endorsement approval authorizes a mortgagee to underwrite single-family mortgage loans and submit them to the Federal Housing Administration (FHA).
The termination occurred through the FHA’s Credit Watch Termination Initiative.
Read on for more details.
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Second consecutive increase in pending home sales achieved in July
Posted Date: Thursday, September 7, 2023
For the second consecutive month, the National Association of Realtors’ (NAR) Pending Home Sales Index experienced a month-over-month increase.
The small gain in contract signings might indicate potential further increases, NAR’s chief economist said.
Read on for more details.
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Bank’s lack of document collection diligence may lead to RESPA violation
Posted Date: Friday, September 1, 2023
An Ohio couple filed a suit alleging violations of RESPA and Regulation X where a bank delayed giving them a modification agreement because it allegedly failed to observe reasonable diligence in the collecting of documents and information in the process of evaluating their loss mitigation application and failed to adequately respond to qualified written requests.
The U.S. District Court for the Southern District of Ohio, Eastern Division ruled on the bank’s motion to dismiss, which argued the couple did not state a claim upon which relief could be granted because their issue was with the term in the bank’s proposed modification.
Read on for more details.
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CFPB amicus brief argues intent over language in TILA case
Posted Date: Friday, September 1, 2023
The Consumer Financial Protection Bureau and the state of Maine argued the intent behind the agreement is more important than the language used when it comes to determining a consumer’s purpose for the loan under the Truth in Lending Act.
The amicus brief was filed in the Supreme Judicial Court of Maine regarding a case where a bank is attempting to recover property after the borrowers defaulted on their mortgage payment.
Read on to learn the details of the argument.
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NAR president-elect takes over effective immediately
Posted Date: Friday, September 1, 2023
The National Association of Realtors (NAR) installed its president-elect effective immediately after the resignation of its current president Kenny Parcell.
Tracy Kasper, NAR’s new president, said the organization will work toward changes in culture and providing a safe and respectful workplace.
Read on for more details about the transfer.
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Total lending activity increased in Q2
Posted Date: Friday, September 1, 2023
Increases in purchase, refinance, and home-equity lending in the second quarter resulted in total lending activity seeing a boost compared with the first quarter of this year.
Such a significant increase has not been seen in two years, ATTOM stated in its U.S. Residential Property Mortgage Origination Report.
Read on for more details.
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MISMO Servicing Transfer Catalog available, closing templates launched
Posted Date: Friday, September 1, 2023
MISMO’S Servicing Transfer Catalog is now available for industry use, the group announced. The new tool provides industry standard templates for the required documents and information for transferring residential mortgage loan portfolios between servicers.
The organization’s new closing instructions templates and XML mapping specifications also received “candidate recommendation” status, meaning these work products have been thoroughly reviewed by a wide range of organizations and industry participants.
Read on for more details.
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RESPA kickback class action against Eagle National Bank continues
Posted Date: Thursday, August 31, 2023
In the U.S. District Court of the District of Maryland, Eagle National Bank filed motions to exclude expert witness testimony, seeking summary judgment in its favor on all claims, and to decertify the previously established Eagle Class in a suit claiming it received kickbacks for referring business to Genuine Title.
In a prior court proceeding, the plaintiff established class certification in her claim that Eagle National violated RESPA by receiving free or heavily discounted marketing materials and services in exchange for referrals to Genuine Title. Though the statute of limitations had initially passed, the plaintiffs were able to establish equitable tolling because an employee of one of the involved entities allegedly created two sham companies to conceal the violation and prevent discovery in a timely manner.
Read on for more details.
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American Bank of Oklahoma settles redlining allegations
Posted Date: Thursday, August 31, 2023
The Department of Justice announced it reached a settlement agreement with the American Bank of Oklahoma to resolve allegations of redlining in the Tulsa, Okla., area.
According to the complaint, the bank allegedly avoided providing home loans and other mortgage services in majority-Black and Hispanic neighborhoods, including historically Black neighborhoods that were the site of the 1921 Tulsa Race Massacre.
Read on for more details.
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GAO to HUD: Improvements needed in oversight of HTF program
Posted Date: Thursday, August 31, 2023
In the midst of the U.S. affordable housing crisis, the Government Accountability Office (GAO) made recommendations to the U.S. Department of Housing and Urban Development’s (HUD) oversight of the Housing Trust Fund program (HTF) program, which is funded by set-asides from Fannie Mae and Freddie Mac to increase and preserve the housing supply for people with extremely low incomes.
The HTF was developed in 2016 to assist in developing rental units for households with extremely low incomes (those not exceeding 30 percent of the area median). As of March 1, 2022, HTF grantees have developed 2,186 rental units and committed funds to another 519 projects with an estimated 6,646 units for extremely-low income households. From 2017 until 2018, the production of completed units averaged about seven units per quarter, but grew by almost 300 units per quarter in 2021.
Read on for more details.
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Study on impact of AI, proptech on fair and affordable housing requested
Posted Date: Thursday, August 31, 2023
The ranking member of the House Financial Services Committee Rep. Maxine Waters (D-Calif.) requested the Government Accountability Office do an impact study on how the use of artificial intelligence and property technology will affect the housing market, particularly when it comes to issues of fairness and affordability.
Tools such as automated valuation models, online housing platforms, tenant screening companies, and rent-setting companies have led to increased housing costs, discrimination, and other barriers to fair and affordable housing, the representative stated.
Read on for more details.
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Existing-home prices increase, housing inventory still strained
Posted Date: Thursday, August 31, 2023
The National Association of Realtors’ existing-home sales report for July showed a slight decrease in sales month-over-month. While existing home prices saw a slight increase, the housing inventory still remained low, causing affordability strains on those attempting to enter the market.
There were 2.2 percent less sales in July than there were in June, down to a seasonally adjusted annual rate of 4.07 million. Compared with the year before, sales were down 16.6 percent.
Read on for more of July’s housing numbers.
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