Prepayment penalties are illegal in some states, but they are still legal under Federal law. Sect. It's also important to understand that lenders can charge prepayment penalties in different ways. for the seasonal or irregular income of the obligor or if the purpose of the loan In Maryland, for example, if you are paying more than 8 per cent interest, there can be no prepayment penalty. Prepayment penalties serve a valid purpose in compensating at least in part for the anticipated interest a lender will not receive if a loan is paid off prematurely. /FRM Do
Say you have a $10,000 balance and two years remaining on your loan, along with a 3% interest rate. Consumer Financial Protection Bureau. fascinator trends 2021; wild wonderful off grid 1 to 50 12 or more points accumulated in 12 months - 6 months to a year license suspension. (1) THE FOLLOWING ACTS AND PRACTICES ARE PROHIBITED IN THE MAKING OF A COVERED LOAN: (a) No lending without cautionary notice. 0000001774 00000 n
The prepayment penalty cost usually depends on the prepayment amount, interest rates and the remaining . For example, if a borrower agreed to finance an auto loan . Were here to help you simplify car care and save, so this post may contain. 0000002454 00000 n
Federal law prohibits some mortgages from having prepayment penalties, which are charges for paying off the loan early. 0000001230 00000 n
If youve read your entire contract and theres no mention of a prepayment penalty, then you probably dont have one. Subject: Health Care & Health Insurance. 0000004744 00000 n
The Wage Act is commonly referred to as the Colorado Wage Law, the Colorado Wage Claim Act, or the Colorado Wage Protection Act. focusIT. https://codes.findlaw.com/co/title-5-consumer-credit-code/co-rev-st-sect-5-3-5-102/, Read this complete Colorado Revised Statutes Title 5. A prepayment penalty disclosure form may be prescribed by the Board, completion of which will constitute compliance with this section 5 (2)."
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Colorado; Connecticut; District of Columbia; Delaware; Florida; Georgia; Hawaii; Idaho; Illinois; Indiana; Iowa; Kansas; Kentucky; . Each prepayment of the Loan shall (i) be accompanied by accrued interest to the extent required by Section 2.05 and (ii) be subject . View the 2021 Colorado Revised Statutes . So one conviction of DUI will already have your license suspended for 6 months to 1 year. There is no set amount that all auto lenders charge nationwide. david senak now. Except as provided in paragraph (c) of this section or otherwise established by HUD, the mortgage shall contain a provision permitting the mortgagor to prepay the mortgage in whole or in part upon any interest payment date, after giving the mortgagee a 30-day notice in writing in advance of its intention to so prepay. a dwelling intended to become the obligor's principal dwelling. restructure sought by the obligor. For example, if you owe $100,000 and the penalty is 3%, you pay a $3,000 prepayment penalty. 8-4-101) 7 CCR 1103-7 Wage Protection Rules A PREPAYMENT PENALTY PROVISION. FindLaw Codes may not reflect the most recent version of the law in your jurisdiction. Amount Limitations for Prepayment Penalties For the first two years after the loan is consummated, the penalty cannot be greater than 2% of the amount of the outstanding loan balance. The assignment shall be for a period ending six (6) years 07/26/2017. Prepayment penalty mortgage is a mortgage that requires a borrower to pay penalty for prepayment, partial payment or for repaying the entire loan within a specified time period. Most states allow auto loan lenders to charge a prepayment penalty to recoup lost revenue from interest. In a nutshell, a prepayment penalty is a fee that the lender charges borrowers who pay off their loans before the full loan term has ended. Brampton Backyard Bylaws, 0000016776 00000 n
September 10, 2019, 9:47 AM. July 4, 2022 . If the lender wants to charge you a penalty or fee to pay off the loan early, the contract has to contain a prepayment penalty clause. (a) Prepayment privilege. 0000002351 00000 n
Lender Must Also Offer a Loan Option Without a Prepayment Penalty The act defines wage theft as theft, which is a felony when the theft is of an amount greater than $2,000. 0000001156 00000 n
0000136578 00000 n
Even if you have to pay a prepayment penalty of 2%, the interest savings from paying off your loan early will likely outweigh the cost of the prepayment penalty. (C) At such other location as may be mutually agreed upon by the parties; (III) Does not require the lender to contribute at least fifty percent of the amount (1) A covered loan is subject to the following limitations: (a) Limitation on balloon payment. A prepayment penalty is a fee some mortgage lenders charge if a borrower pays all or part of their loan off early. Debt.org. 12 or more points accumulated in 12 months - 6 months to a year license suspension. If you have a prepayment penalty, you would have agreed to this when you closed on your home. Colorado - terms of the offer of a loan product with a PPP must be provided clearly and Cymax then applied to the court for a declaration that the Lenders were not entitled to the Prepayment Penalty. The following states permit a Prepayment Penalty to be charged without limitation with respect to amount, time or other loan characteristics. Concerning criminal offenses for failure to pay wages, and, in connection therewith, implementing recommendations from the Colorado human trafficking council. Estimated 2023 Colorado alternative minimum tax $ 00 4. You should also ask your lender, or the dealer . The total for the first nine months alone was nearly 29,000, more than all of last year and a record for the first three quarters. 0000193498 00000 n
2016 - Crown Holiday Lighting - All rights reserved. 12 or more points accumulated in 12 months - 6 months to a year license suspension. Part 429 Rule Concerning Cooling-off Period for Sales Made at Homes or at Certain Other Locations. Box 280 269 S. Gunnison Avenue Lake City, CO 81235 970.944.8100 info@hallrealty.net The Director adopts this rule in order to address the high rate of foreclosures in Colorado resulting from particular prepayment penalties. Prepayment penalty is a charge assessed against a borrower who elects to pay off a loan before it is due. 0000007567 00000 n
If the terms arent clear or if you have additional questions, consult an attorney with experience in consumer loans. A typical 5-year term might have the following prepayment penalty: 5-4-3-2-1. This is common for a floating rate loan, but less common for fixed rate notes. In this case, if you pay off a $50,000 balance early and the prepayment penalty is 5%, you'd owe an . For example, if you take out a personal loan with a five-year payment schedule and decide to pay it off sooner than five years, the lender may charge you a fee equal to 1% of the loan balance. The Colorado Division of Real Estate has issued Emergency Rule 4CCR 725-3 restricing the use of prepayment penalties. According to the Colorado Commission on Criminal and Juvenile Justice, auto thefts in Colorado . . 0000066465 00000 n
Also, if you think the loans annual percentage rate (APR) is too high in the long run, opt out. (1) THE FOLLOWING ACTS AND PRACTICES ARE PROHIBITED IN THE MAKING OF A COVERED LOAN: (a) No lending without cautionary notice. Some of her bylines can be found in the Chicago Defender, Chicago Tribune and CBS Chicago. FindLaw.com Free, trusted legal information for consumers and legal professionals, SuperLawyers.com Directory of U.S. attorneys with the exclusive Super Lawyers rating, Abogado.com The #1 Spanish-language legal website for consumers, LawInfo.com Nationwide attorney directory and legal consumer resources. (e) Limitations on mandatory arbitration clauses. 0000073898 00000 n
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Bank of America does not charge a prepayment penalty on the auto loans it services. 1999); see Aronoff v. 42 Best Student Loans in Colorado of June 2022 Compare Student Loans and Choose The Best One for You. Current state law uses car value as a threshold for if the offense is a felony or a misdemeanor. Prepayment Penalty Schedule. The Director adopts this rule in order to address the high rate of foreclosures in Colorado resulting from particular prepayment penalties. 39-1.5-103. Laws Ann. (2020, August 28). A payment in the amount of a scheduled installment . PPP may not exceed >1% of prepayment amount made (Mich. Comp. For more information about the legal concepts addressed by these cases and statutes, visit FindLaw's Learn About the Law. 24-4.4-2-201(2) (West 2012) IN Consumer Loan54 Any Secondary55 3 years+ 2% of amount prepaid after deducting all refunds and rebates as of date of prepayment 56(must be charged within 60 days) I The New Jersey banking law that prohibits prepayment penalties covers individual mortgages taken on single-family homes or buildings with up to six units. 0000001780 00000 n
Among other things, a prepayment penalty insures the lender against loss of its bargain if interest rates decline. 0000008048 00000 n
If you make it clear that you will not accept the original terms in order to buy the car, pre-signing is when you hold the highest leverage to reevaluate the contract. Thirty-six states and Washington, D.C., let auto lenders charge prepayment penalties for loans with terms of 60 months or less. Some lenders charge a percentage of the outstanding loan balance you pay off. One advantage is that it is easy to calculate. Most mortgages with prepayment penalties have an interest rate one-half percent to one full percent below those without penalties. 0000007546 00000 n
Although there are a number of reasons why car buyers may run into extra money (ex. the loan agreement if the change in the interest rate is not occasioned by the event 0000002237 00000 n
Certain states prohibit prepayment penalties on all home loans, but auto loans are a gray area. 0000006984 00000 n
(1995, October 20). Lenders are in the business of making money. . For lenders who charge a set percentage fee, 2% of the remaining loan balance is common. Box 280 269 S. Gunnison Avenue Lake City, CO 81235 970.944.8100 info@hallrealty.net Prepayment penalties, which may vary depending on state law, take various forms. Dodd-Frank, the 2010 federal overhaul of residential mortgage laws after the recession, capped . 0000004178 00000 n
Most prepayment penalties allow you to prepay up to twenty percent of the original mortgage amount in any twelve month period without incurring any penalty. When consumers see terms that have to do with prepayment penalties, they should search the loan . The best way to avoid prepayment penalties due to late payment is to avoid penalty charges for delinquent payments by refusing to accept costly loans. Some lenders charge a percentage of the outstanding loan balance you pay off. Share. Rent Increase Notice: The landlord must give "at least" twenty-one days' notice to the tenant, but only if the tenant has been living in the rental unit for between one month and six months and there is no written agreement between the landlord and tenant. Most states allow lenders to charge a prepayment penalty, and lenders may choose not to impose prepayment penalties on their loans. PPP may not exceed >1% of prepayment amount made (Mich. Comp. Concerning the enforcement of requirements imposed on pharmacy benefit managers. Current as of January 01, 2019 | Updated by FindLaw Staff. No covered loan may include terms under which any periodic payments required under This memorandum provides information concerning the use of capital punishment in Colorado and across the country. the date of execution of the loan. Colorado Wage Act ( C.R.S. To shed further light on the matter, Article 4 of the same law gives the following definitions (reproduced verbatim): Colorado law allows up to three owner financed transactions a year by a seller without having to comply with this requirement. Laws Ann. To determine defendants' right to include such payments, we must first determine whether they constitute a prepayment penalty. Auto refinancing may be the only other option. for any outstanding balance; or. Theft - wages - failure to pay wages - paying less than the minimum wage.
No prepayment fee or penalty may be charged on a refinancing of a covered loan if Colorado Equal Pay for Equal Work Act went into effect on January 1 2021. The penalty is based on . Auto loan prepayment penalties are essentially financial punishments intended to dissuade borrowers from paying off their debt too early, which effectively robs lenders of interest payments and profit. The numbers in this It can refer to a sum of money that is exacted as a punishment for either a wrong to the state or civil wrong. the loan are paid in advance from the loan proceeds provided to the obligor. Prepayment penalty is a charge assessed against a borrower who elects to pay off a loan before it is due. Mortgage companies introduced prepayment penalties on mortgage loans as a way to offer lower interest rates to borrowers. The prepayment penalty cost usually depends on the prepayment amount, interest rates and the remaining . 12 or more points accumulated in 12 months - 6 months to a year license suspension. is it illegal to wear military uniform in australia. A PREPAYMENT PENALTY PROVISION. Prepayment Chart Page 1 of 3 Rev. 2022-06-30; wreck on 1942 crosby, tx today . Click to see full answer. Estimated 2023 Colorado taxable income $ 00 2. If you click on a link and take action, we may earn a commission. Estimated 2023 Colorado income tax 4.4% of line 1 $ 00 3. Thats up to you. Prepayment penalties are fueling what were seeing, particularly in lower-income markets, Toll said. Cory Schneider Career Earnings, Chris Holbert, president of the Colorado Mortgage Lenders Association, said the prepayment penalties covered by the new order have already become rare. A penalty applied in the first 2 years following consummation of the loan is limited to 2% of the amount of the outstanding loan balance; one applied in the third year cannot exceed 1% of the outstanding loan balance. The fastest way to determine if your auto loan has a prepayment penalty is to look at the loan agreement you signed when you took out the car loan. If you already took out a loan with a prepayment penalty, you might want to consider refinancing, even if you do have to pay a prepayment penalty. The 192nd General Court of the Commonwealth of Massachusetts. Loan prepayment penalties. At the time you refinance the loan, you still owe $100,000 on your balance. Chapter 675 Installment Loans. Restricted acts and practices. Prepayment penalties serve a valid purpose in compensating at least in part for the anticipated interest a lender will not receive if a loan is paid off prematurely. A commercial loan made to a business is not subject to New Jersey's statutory ban on mortgage prepayment penalties, even if guaranteed by an individual, a state appeals court ruled Tuesday . Generally, a prepayment penalty is a charge assessed against a borrower who elects to pay off a loan before it is due. % DSBlank Laws Ann. Prepayment penalty mortgage is a mortgage that requires a borrower to pay penalty for prepayment, partial payment or for repaying the entire loan within a specified time period. By: Efren Ll. Digital Expert Zone; Our Services; About Us; Get In Touch; Shop; dyckman shooting 2021. fairfield, ct concerts on the green 2021 0. In other words, it is an early termination fee, or penalty imposed on borrowers should they decide to pay off their loan before it matures. Amount Limitations for Prepayment Penalties For the first two years after the loan is consummated, the penalty cannot be greater than 2% of the amount of the outstanding loan balance. 0000065640 00000 n
penalty. Its proof that you can finally cross those monthly auto loan payments off of your list, and get the title to your car in your own name. Automobiles, vans, trucks, or other motor vehicles (including cars sold at auctions, tent sales, or other temporary places of business) do not qualify for this 72-hour return option. (I) A LENDER MAY NOT MAKE A In this case, if you pay off a $50,000 balance early and the prepayment penalty is 5%, you'd owe an . If you click on a link and take action, we may earn a commission. Bill Summary. Post author By ; aleko lm137 manual Post date July 1, 2022; police clearance certificate in saudi arabia . Prepayment penalty is mostly charged in cases where s/he pays one or more monthly payments before the due date. endstream
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2023 FIXD, Inc. All Rights Reserved.Exclusive Member of Mediavine Home. penalty fee. any penalty or withdrawal or liquidation. Here's an example of $1,000,000 outstanding loan balance. 0000002154 00000 n
Black's Law Dictionary 1201 (7th ed. Protection of obligors - last updated January 01, 2019 0000064443 00000 n
within the first three years of the loan. DENVER " Colorado regulators have imposed a new rule limiting prepayment penalties on adjustable-rate mortgages in hopes of reducing the state's high foreclosure rate. View Recent Bill Text. Loan prepayment penalties. the date of execution of a covered loan. Simplify Your Student Loan Search with Myfin! 42 Best Student Loans in Colorado of June 2022 Compare Student Loans and Choose The Best One for You. The New Jersey banking law that prohibits prepayment penalties covers individual mortgages taken on single-family homes or buildings with up to six units. These fees can differ by state and local laws and regulations. This is on top of the other DUI penalties you will have to face. (n.d.). Mortgage prepayment penalties usually only apply during the first 3 - 5 years of a loan. any 12-month period in excess of 20 percent of the original principal. 2-509. The prepayment fees or penalties permitted by this paragraph (g) shall apply only The memorandum provides a brief history of Colorado's death penalty scheme and information on recent U.S. Supreme Court decisions concerning the constitutionality of the death penalty. H*T0T0 BgU)c0 0000064784 00000 n
As for personal loans, some lenders charge prepayment penalties, but many do not. (II) There is fraud or material misrepresentation by an obligor in connection with Can I prepay my loan at any time without penalty? CO Colorado Yes Prepay allowed if APR < 12%, OR loan is a Purchase These protections come thanks to federal law. The Wage Act is commonly referred to as the Colorado Wage Law, the Colorado Wage Claim Act, or the Colorado Wage Protection Act. It also explains the current . An emergency rule announced Monday by Erin Toll, director of the Colorado Division of Real Estate, bars lenders from demanding prepayment fees after a . The rule creates a presumption that mortgage brokers have. Prepayment penalties and calculations for the actual prepayment cost vary across lenders. An emergency rule announced Monday by Erin Toll, director of the Colorado Division of Real Estate, bars lenders from demanding prepayment fees after a loan is adjusted to a higher interest. 1984). No Penalty. (f) No advance payments. You're more likely to find a prepayment penalty on a mortgage than on other types of loans. Paying a loan off early reduces the amount of interest the lender gets to collect. 0000005627 00000 n
For personal loans, prepayment penalties vary by lender. 0000021070 00000 n
The Colorado Division of Real Estate has issued Emergency Rule 4CCR 725-3 restricing the use of prepayment penalties. to the obligor for prepayment: (B) Pursuant to a refinance with the same lender; or. A prepayment fee or penalty shall be permitted only on a refinance to a different lender other than pursuant to a sale and only during the first thirty-six months after the date of execution of a covered loan. There are lenders out there with good rates and no prepay penalties as well. Therefore, a landlord may be allowed to use the security deposit for almost all reasonable expenses that are connected to the tenancy or the premises. A prepayment penalty is a fee that lenders may charge when you pay all or part of your loan early. Review your Truth in Lending disclosures and the contract before you sign the agreement. A penalty applied in the first 2 years following consummation of the loan is limited to 2% of the amount of the outstanding loan balance; one applied in the third year cannot exceed 1% of the outstanding loan balance. family loans, completing payments on other large bills, moving and having lower rent or mortgage rates), lenders still depend on that interest. Contact us. Archbishop Cordileone Opus Dei, Colorado courts have long held that a debtor has no right to obtain a release of a deed of trust by tendering the principal . According to Roger Wagner, of the New . penalty. Cannabis Tax Program: A 10 percent late payment penalty and a 50 percent failure to pay penalty will apply if you do not file your return or To shed further light on the matter, Article 4 of the same law gives the following definitions (reproduced verbatim): 1999); see Aronoff v. When borrowers obtain an auto loan, they must make monthly payments to repay the debt. One advantage is that it is easy to calculate. Right to prepay. Prepayment - amounts - credits - limitations 39-1.5-105. applies to the types of loans a prepayment penalty restriction applies, as promulgated under the same chapter, article, or title of such restriction. Rent Increase Notice: The landlord must give "at least" twenty-one days' notice to the tenant, but only if the tenant has been living in the rental unit for between one month and six months and there is no written agreement between the landlord and tenant. Open Split View. These fees can differ by state and local laws and regulations. 0000002417 00000 n
Cymax made payment based on the original demand and the Prepayment Penalty claimed, but the parties agreed that the amount claimed for the Prepayment Penalty ($550,083.33 U.S.) would be held in trust pending resolution of the issue. Not all mortgages have a prepayment penalty. At the time you refinance the loan, you still owe $100,000 on your balance. A data field in the Mortgage Loan Schedule attached hereto as Exhibit A which sets forth the amount or method of calculation of the Prepayment Penalty Amount and the term during which such Prepayment Penalty Amount is imposed with respect to a Mortgage Loan. Hall Realty, Inc P.O. Penalty is the punishment imposed on a wrong doer. As for personal loans, some lenders charge prepayment penalties, but many do not. For example, if a borrower agreed to finance an auto loan . National Archives Code of Federal Regulations. What is 'Prepayment Penalty'? The assignment shall be for a period ending six (6) years Mortgage companies introduced prepayment penalties on mortgage loans as a way to offer lower interest rates to borrowers. The State of the Law: Prepayment Penalties Bans November 25, 2008 State Prepayment Penalty Bans Five (6) states ban prepayment penalties on all home loans: AL,1 AK,2 IA,3 MD,4 NM,5 VT6 One (1) state, NJ, bans prepayment penalties on all loans with an interest rate that exceeds 6%, which includes all subprime, and most Alt-A and prime loans.7 trailer
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Those are the folks who are most susceptible to the lure of an extremely low rate.. Tax.Colorado.gov Colorado Estimated Tax - Individuals Worksheet Do not send, keep for your records 1. If they cant afford the higher rate or the prepayment fees, they could end up in foreclosure. In amendments to various parts of Colorado's administrative code, as set forth in 36 CR 20 (2013), this provision was slated for repeal, effective January 10, 2014. No covered loan may contain a provision for a scheduled payment that is more than applies to the types of loans a prepayment penalty restriction applies, as promulgated under the same chapter, article, or title of such restriction. Prepayment penalty is mostly charged in cases where s/he pays one or more monthly payments before the due date. Colorado - terms of the offer of a loan product with a PPP must be provided clearly and . . When it comes to car loans, 36 states plus the District of Columbia permit lenders to charge prepayment penalties on loans with terms shorter than 60 months. The State of the Law: Prepayment Penalties Bans November 25, 2008 State Prepayment Penalty Bans Five (6) states ban prepayment penalties on all home loans: AL,1 AK,2 IA,3 MD,4 NM,5 VT6 One (1) state, NJ, bans prepayment penalties on all loans with an interest rate that exceeds 6%, which includes all subprime, and most Alt-A and prime loans.7 A prepayment charge may be imposed on any amount prepaid in. A prepayment penalty is a fee that lenders may charge when you pay all or part of your loan early. Lenders are prohibited by law from charging a prepayment penalty for an auto loan of 61 months or longer. Stay up-to-date with how the law affects your life. . Section 56: Mortgage notes; provisions for prepayment. Cymax made payment based on the original demand and the Prepayment Penalty claimed, but the parties agreed that the amount claimed for the Prepayment Penalty ($550,083.33 U.S.) would be held in trust pending resolution of the issue. It does not, however, indicate the maximum interest rate which may be charged, which may be set forth in another part of state law. While auto lenders want profitable deals, they may be willing to negotiate on how early the principal or interest can be paid. As for personal loans, some lenders charge prepayment penalties, but many do not. In re LHD Realty Corp., 726 F.2d 327 (7th Cir. %%EOF
Copyright 2023, Thomson Reuters. You're more likely to find a prepayment penalty on a mortgage than on other types of loans. Colorado prenup laws allow any couple to sign a prenup without legal representation should you wish to cut the costs. Asa Griggs Candler Net Worth, In the District of Columbia, the law permits the lender to charge a prepayment . In their Financing column, Jeffrey B. Steiner and Jason R. Goldstein discuss how the prepayment of a loan in commercial real estate transactions may result in . Before agreeing to loan terms, have a reasonable idea of your future income. In a nutshell, a prepayment penalty is a fee that the lender charges borrowers who pay off their loans before the full loan term has ended. Once established, your revolving line of credit is there for you when you need it. The savings account, deposit or certificate of deposit shall be assigned to the Director of the Division of Real Estate for the use of the People of the State of Colorado in the form and manner approved by the Director. Some lenders might simply choose a percentage of the overall loan balance and . Penalty Terms of the Penalty Charge Legal Reference IN First Lien Variable-Rate Mortgage Transaction53 Any Primary Any Prohibited I ND. We conclude that they do. The prepayment penalty is used to discourage early payment of loans since it deprives the lender of future interest payments. to acquisition or construction. Mortgage Laws and Regulations in Different States: A Quick Primer. In fact, act is only law in US to require employers to post . Prepayment penalties are sometimes considered to be indicative of predatory lending. Her areas of expertise include K-12 and adult education textbooks; local and nationwide news; and health news. applies to the types of loans a prepayment penalty restriction applies, as promulgated under the same chapter, artic le, or title of such restriction. The savings account, deposit or certificate of deposit shall be assigned to the Director of the Division of Real Estate for the use of the People of the State of Colorado in the form and manner approved by the Director. It is a fee that a lender may assess if a borrower repays a loan before the scheduled maturity. GoogleCookieCookie, Magic School Bus Gets A Bright Idea Summary, Center Button Vertically In Div Bootstrap, All My Children' Cast Members Who Have Died, keynesian beauty contest alice in borderland, e learning vs classroom learning informative speech. 07/29/21 Prepayment penalties are only allowed on investment properties for Carrington Flexible Advantage, Carrington Flexible Advantage Plus, and Carrington . Total of lines 2, 3 . For example, a particular state may ban prepayment penalties on all loans issued by state-run banks or credit unions, though that same law might not apply to private lenders. Typically, a prepayment penalty only applies if you pay off the entire mortgage balance - for . Investors who sell many properties will need to become licensed mortgage loan originators or hire one for their deals.
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