Fair Housing … it’s the law, not a prescription for home buying hide and seek.

Fair Housing Act
Title VIII of the Civil Rights Act of 1968 (Fair Housing Act), as amended, prohibits discrimination in the sale, rental, and financing of dwellings, and in other housing-related transactions, based on race, color, national origin, religion, sex, familial status (including children under the age of 18 living with parents or legal custodians, pregnant women, and people securing custody of children under the age of 18), and disability.

HUD has played a lead role in administering the Fair Housing Act since its adoption in 1968. The 1988 amendments, however, have greatly increased the Department’s enforcement role. First, the newly protected classes have proven significant sources of new complaints. Second, HUD’s expanded enforcement role took the Department beyond investigation and conciliation into the area of mandatory enforcement.

Complaints filed with HUD are investigated by the Office of Fair Housing and Equal Opportunity (FHEO). If the complaint is not successfully conciliated, FHEO determines whether reasonable cause exists to believe that a discriminatory housing practice has occurred. Where reasonable cause is found , the parties to the complaint are notified by HUD’s issuance of a Determination, as well as a Charge of Discrimination, and a hearing is scheduled before a HUD administrative law judge. Either party – complainant or respondent – may cause the HUD-scheduled administrative proceeding to be terminated by electing instead to have the matter litigated in Federal court. Whenever a party has so elected, the Department of Justice takes over HUD’s role as counsel seeking resolution of the charge on behalf of aggrieved persons, and the matter proceeds as a civil action. Either form of action – the ALJ proceeding or the civil action in Federal court – is subject to review in the U.S. Court of Appeals.

Significant Recent Changes

  1. The Housing for Older Persons Act of 1995 (HOPA) makes several changes to the 55 and older exemption. Since the 1988 Amendments, the Fair Housing Act has exempted from its familial status provisions properties that satisfy the Act’s 55 and older housing condition.First, it eliminates the requirement that 55 and older housing have significant facilities and services designed for the elderly. Second, HOPA establishes a good faith reliance immunity from damages for persons who in good faith believe that the 55 and older exemption applies to a particular property, if they do not actually know that the property is not eligible for the exemption and if the property has formally stated in writing that it qualifies for the exemption.
    HOPA retains the requirement that senior housing must have one person who is 55 years of age or older living in at least 80 percent of its occupied units. It also still requires that senior housing publish and follow policies and procedures that demonstrate an intent to be housing for persons 55 and older.

    An exempt property will not violate the Fair Housing Act if it includes families with children, but it does not have to do so. Of course, the property must meet the Act’s requirements that at least 80 percent of its occupied units have at least one occupant who is 55 or older, and that it publish and follow policies and procedures that demonstrate an intent to be 55 and older housing.

    A Department of Housing and Urban Development rule published in the April 2, 1999, Federal Register implements the Housing for Older Persons Act of 1995, and explains in detail those provisions of the Fair Housing Act that pertain to senior housing.

  2. Changes were made to enhance law enforcement, including making amendments to criminal penalties in section 901 of the Civil Rights Act of 1968 for violating the Fair Housing Act.
  3. Changes were made to provide incentives for self-testing by lenders for discrimination under the Fair Housing Act and the Equal Credit Opportunity Act. See Title II, subtitle D of the Omnibus Consolidated Appropriations Act, 1997, P.L. 104 – 208 (9/30/96).

What Housing Is Covered?

The Fair Housing Act covers most housing. In some circumstances, the Act exempts owner-occupied buildings with no more than four units, single-family housing sold or rented without the use of a broker, and housing operated by organizations and private clubs that limit occupancy to members.

What Is Prohibited?

In the Sale and Rental of Housing: No one may take any of the following actions based on race, color, national origin, religion, sex, familial status or handicap:

  • Refuse to rent or sell housing
  • Refuse to negotiate for housing
  • Make housing unavailable
  • Deny a dwelling
  • Set different terms, conditions or privileges for sale or rental of a dwelling
  • Provide different housing services or facilities
  • Falsely deny that housing is available for inspection, sale, or rental
  • For profit, persuade owners to sell or rent (blockbusting) or
  • Deny anyone access to or membership in a facility or service (such as a multiple listing service) related to the sale or rental of housing.

In Mortgage Lending: No one may take any of the following actions based on race, color, national origin, religion, sex, familial status or handicap (disability):

  • Refuse to make a mortgage loan
  • Refuse to provide information regarding loans
  • Impose different terms or conditions on a loan, such as different interest rates, points, or fees
  • Discriminate in appraising property
  • Refuse to purchase a loan or
  • Set different terms or conditions for purchasing a loan.

In Addition: It is illegal for anyone to:

  • Threaten, coerce, intimidate or interfere with anyone exercising a fair housing right or assisting others who exercise that right
  • Advertise or make any statement that indicates a limitation or preference based on race, color, national origin, religion, sex, familial status, or handicap. This prohibition against discriminatory advertising applies to single-family and owner-occupied housing that is otherwise exempt from the Fair Housing Act.

Additional Protection if You Have a Disability

If you or someone associated with you:

  • Have a physical or mental disability (including hearing, mobility and visual impairments, chronic alcoholism, chronic mental illness, AIDS, AIDS Related Complex and mental retardation) that substantially limits one or more major life activities
  • Have a record of such a disability or
  • Are regarded as having such a disability

your landlord may not:

  • Refuse to let you make reasonable modifications to your dwelling or common use areas, at your expense, if necessary for the disabled person to use the housing. (Where reasonable, the landlord may permit changes only if you agree to restore the property to its original condition when you move.)
  • Refuse to make reasonable accommodations in rules, policies, practices or services if necessary for the disabled person to use the housing.

Example: A building with a no pets policy must allow a visually impaired tenant to keep a guide dog.

Example: An apartment complex that offers tenants ample, unassigned parking must honor a request from a mobility-impaired tenant for a reserved space near her apartment if necessary to assure that she can have access to her apartment.

However, housing need not be made available to a person who is a direct threat to the health or safety of others or who currently uses illegal drugs.

Requirements for New Buildings

In buildings that are ready for first occupancy after March 13, 1991, and have an elevator and four or more units:

  • Public and common areas must be accessible to persons with disabilities
  • Doors and hallways must be wide enough for wheelchairs
  • All units must have:
    • An accessible route into and through the unit
    • Accessible light switches, electrical outlets, thermostats and other environmental controls
    • Reinforced bathroom walls to allow later installation of grab bars and
    • Kitchens and bathrooms that can be used by people in wheelchairs.

If a building with four or more units has no elevator and will be ready for first occupancy after March 13, 1991, these standards apply to ground floor units.

These requirements for new buildings do not replace any more stringent standards in State or local law.

Housing Opportunities for Families

Unless a building or community qualifies as housing for older persons, it may not discriminate based on familial status. That is, it may not discriminate against families in which one or more children under 18 live with:

  • A parent
  • A person who has legal custody of the child or children or
  • The designee of the parent or legal custodian, with the parent or custodian’s written permission.

Familial status protection also applies to pregnant women and anyone securing legal custody of a child under 18.

Exemption: Housing for older persons is exempt from the prohibition against familial status discrimination if:

  • The HUD Secretary has determined that it is specifically designed for and occupied by elderly persons under a Federal, State or local government program or
  • It is occupied solely by persons who are 62 or older or
  • It houses at least one person who is 55 or older in at least 80 percent of the occupied units, and adheres to a policy that demonstrates an intent to house persons who are 55 or older.

A transition period permits residents on or before September 13, 1988, to continue living in the housing, regardless of their age, without interfering with the exemption.

This law is in place to guarantee that you can buy where you want to buy. It in no way suggests that the features of any home or neighborhood can dictate your ability to purchase.

Save McMillan Park

McMillan-Park-Green-Tower

Sometimes progress is not accomplished by destroying the old and replacing it with the new. Lives are not always enhanced when yesterday becomes nothing more than rubble to be removed and history is paved over with parking lots. History is littered with bureaucratic “oops” over decisions made that resulted in the loss of pieces of yesterday, that can never be recovered. Let it be said – Save McMillan Park is not the battle cry of those opposed to improving the quality of life in Bloomingdale (or any other part of the Nation’s Capitol). It is a plaintive cry echoing from the voice of reason. Save McMillan Park.

Millions of people have driven by the old brick towers located off North Capitol Street just south of the VA Medical Center/Washington MedStar  Complex. It has been fenced off since after WWII. I remember sitting in the back of my father’s old Buick, looking out the window and wondering what that mysterious place might be. Little did I know or understand the wheeling and dealing that was occurring regarding the structures and the future of the site.

3-filtration-below-light

McMillan Park is actually the site of a water filtration plant. McMillan was the city’s first water treatment plant, built in 1905, and played an important element in the city’s water supply system, preventing the spread of typhoid and other water-borne diseases. It was in use until 1986 when the Army Corps of Engineers updated to a newer system. In 1987 ownership and control of the park was transferred to the District of Columbia (The choice for DC was accept the land and existing structures for $1 with the caveat that it would be used as a park or pay $9.3 million with no caveats). DC (using logic that totally escapes me) chose to pay $9.3 million. Oh there was hope that they could just raze the structures, pave it over and have a shopping center with a brand new K-Mart. Fortunately, those plans were placed in the large circular file when the property was listed on the DC Inventory of Historic Sites. Now the site has also been added to the National Register of Historic Places. Today, plans for the future of McMillan Park are in the hands of a team of developers, now known as Vision McMillan Park(VMP), to design new space for housing and retail on the site.

The quiet voice that has increased it’s volume regarding the future of McMillan Park emanates from the Friends of McMillan Park. Before you support the destruction of this beautiful site, you should spend a few moments reading about the park and what it could be on their site.

reservoir

The beautiful reservoir pictured is located minutes from the US Capitol Building. As a matter of fact, if you stand at the center of its prominent vista, you’ll find a gorgeous view the National Basilica to the northeast, Howard University’s Independence Hall to the west, and the Capitol and  Washington monument to the south. There may not be a more beautiful spot in the city. It should be saved.  The final plan should dovetail with the one that the Friends of McMillan Park endorsed.  If we have learned nothing else in our mad rush to raze, pave and construct on every patch of dirt left in the area, we should have realized that preserving historical sites enhances the quality of life in the city.

Progress does not have to be accomplished through the removal of every scintilla of the past. Parks are for people. Parks are a place where we interact with one another. Shopping malls and K-Marts are get in and get out destinations. The people of Bloomingdale and the rest of the city will be better served now and in the future if the DC government heeds the call to Save McMillan Park.

images used have been garnered from sites supporting saving mcmillan park. they are not mine and only represent a bit of the beauty found on the grounds.

You can not get lost in Washington DC

United States Capitol at Dusk

Getting around DC may seem like a mystery if you are new to the area (people that have grown up in the suburbs face the same challenges as those that move here from afar). As a lifelong resident, and one that travels across the city almost every day, I promise you getting from here to there can be mastered.

At some point, you may have heard that the city was laid out by L’Enfant and in many ways it resembles Paris. Well, that was then and this is now.You may arrive in town via a plane, train or automobile. You will discover DC now has a subway, zip cars and a bike share program. There are metro buses and circulator buses. There are taxi cabs, limo’s and Uber’s. Each system interconnects with another so you may use more than one when getting from point A to point B. Of course, the number one mode of moving about is pedestrian. In DC, you can saunter, stroll, speed walk and jog.

The big challenge most people face is not how to get there, but HOW to get there. Let’s set the fear of getting lost aside. You can not get lost in DC. You may not be sure where you are, but where you are relates to everywhere else in a pretty orderly manner. Trust me on this. No matter where you are, you can walk about two blocks and you will know where you are and how it relates to where you are going.

The city is laid out in a grid fashion with the Capitol Building being the center (I know, it is not even close to the geographic center, but everything is centered on the building).

If you were to climb atop the Capitol Building, North Capitol Street would head directly north, South Capitol Street would head to the south and East Capitol Street would head to the east. There is no West Capitol Street because the land between the Capitol and the Lincoln Memorial is pretty much our national mall.

Now, streets that run north and south are numbered and the numbers are higher as you move away from the Capitol. Yes, there are exceptions to the rule, but if you go east or west a few blocks from any point, you will reach a numbered street. How do you know you are heading east or west? The streets going east and west are named. Those closest to the Capitol are named letters in the alphabet. You will find an occasional named street mixed in, but the alphabetical streets are sequential. The next series are alphabetical with two syllable words (i.e., Adams, Bryant, and so on). Again, anomalies have been mixed in over the years, but this pattern continues until you reach Allison and the pattern starts over with three syllable words. As you get farther out, neighborhoods cropped up and other names were added.

A few odd ball things seem to occur in some areas. In NW, 7th St appears to turn into Georgia Avenue. Georgia continues all the way out to Silver Spring and beyond. 7th St NW reappears up above Columbia Road NW, 17th St NW does turn into Connecticut Avenue and is never heard from again. Connecticut continues all the way into Chevy Chase and beyond. Wisconsin Avenue NW is in a class unto itself. It runs from the river, north all the way into Friendship Heights.

Having lived here all my life, I have discovered short cuts that make rush hour bearable. It is possible to leave the Capitol and be in Montgomery County in 30-45 minutes during rush hour. You can get across town without struggling light to light. That will come with time. For now, you have an basic understanding of how the city is laid out and you are on your way to understanding, you can’t get lost in this city.

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Title Companies.. they are not all the same

In Maryland, the buyer has the right to choose the title company that will handle the closing of the transaction.  Very few buyers have a close relationship with any title company, so they seek the advice and/or counsel of their real estate agent.  Seems like a reasonable thing to do.  After all, real estate agents should have a good idea about title companies.

The first thing you should know is that the amount of money you can be charged for title insurance in Maryland is pretty much set by the State.  It will not or should not vary much from one title company to another.

Title companies can charge whatever they want for other fees associated with the transfer of property. Of course, the current HUD-1 in use in Maryland (a breakdown of how the money flows in the transaction) reveals the title companies charges on page two. I know that the settlement charges to the buyer and seller appear on page one, but that figure is a gross figure that includes all the charges.

The actual breakdown is on page two, where the buyer’s charges appear in one column and the seller’s charges appear in another. You just have to go down to the 1100 section Title Charges and see what is being charged each side. The biggest numbers involve title insurance. There is lender’s title insurance (required by the lender) and there is owner’s title insurance (optional). I will forever fall on the side of the equation that believes purchasing owner’s title insurance is absolutely necessary. It is a small price to pay for coverage of any lies, deceit or malfeasance that may have occurred prior to the buyer taking title.

Of course, it is always a good idea to ask your agent if there is a title insurance policy on the home you are buying that has a re-issue rate available.

Beyond those charges, there are minimal fees for closing the transaction. Note, the buyer usually catches a break here because they have chosen the title company. (If the title company wants to realize $250 per closing, they will just dump the cost on the seller’s side and leave the impression that they have done a wonderful thing for the buyer. “See the benefit of choosing our firm to handle the transaction?”)

There will be other costs. An abstract or Title Search fee will be there. Larger title companies have folks that do this in-house and smaller firms contract out for the service. You pay what the title company decides you should pay, regardless of the actual cost of having the search done.  I often wonder if there were a six or seven layers of contractors in title searches if the cost to the consumer would be so beefed up they would need a second trust to cover it? Sort of layer 7 charges layer 6 $X for doing the search and then layer 6 charges layer 5  $X+10%=Y, and layer 5 charges layer 4 $Y+10% and do on.  I am not sure there is no law preventing that from happening. Laws are written by lawyers and you know how that goes.

The final fee is Deed Preparation. This fee remains $100 +/- with most firms.  Even though, boiler plate deeds are available and computers have replaced typewriters and deeds can be whipped out in minutes, you are paying whatever the market will bear. Don’t fall for the old, “I am liable for any mistakes” statement. During closing, you will be asked to sign a form allowing the title company to make any corrections necessary to any of the documents.  Just understand, Deed Prep is priced according to the desires of the company.

Don’t get me wrong, The title company should be paid. It is real estate and everyone should get paid. Oh, and everyone does get paid.

So, what is the difference in title companies?  Some actually offer support. Some actually go overboard when making sure the transaction closes when and where it is required.  Some readily answer any and all questions. Some are available to “hold hands” or “resolve differences” or “work through challenging issues”.

I have had the good fortune to work with many of the title companies in the area. It is no secret that many brokers have a “close” relationship with some title companies. A little thing called RESPA (a federal law that frowns on “kickbacks for referrals, etc.”) caused a stirring of the pot in those broker/title company relationships. Some brokers still own a piece of a title company, and for the “convenience of the consumer” offer them office space in the broker’s building. Others just label the title company that shares a cozy relationship with them as “preferred providers”.  NOTE TO CONSUMERS: Preferred provider label indicates preferred by broker.

When my buyer clients ask me for the name of a title company, I always share Capitol Settlements. 240-599-2200.  Every time my clients either choose someone else or find themselves contractually forced to use another title company, my support of Capitol Settlements grows. I don’t have a dog in the fight. I have a client that deserves the absolute best in service. Capitol Settlements provides that service to both sides equally.  They answer phone calls. They handle closings off site. They work with folks locally and out of the area. They get the job done.  They are the go to title company for many banks in the area. The fees they charge both sides are usually equal to or less than what other firms quote.

So the money is the same. Why go with anyone else? I would not dare recommend anyone else.

Capitol Settlements  240-599-2200

Let’s talk about loans …

bookcover

O.K. maybe not loans, but I think everyone should have a short primer regarding how folks pay for a house.  It really doesn’t matter if it is a co-op, a condo, a town home or a single family home.  One of the basic rules of contract law includes the need for consideration. Consideration is just a fancy legal term for money. If you want to buy a house, you have to be able to produce the funds at settlement.

Now, if you happen to be loaded and can pay cash for the house, well you can either read through this for information, or you can check out another one of the articles I have written. For those of you that want to buy a home and don’t have cash on hand, this is for you.

For purposes of example, I will use a $500,000 purchase price. You and the seller have agreed on the price. Well now, wait a minute, let’s back up. You really should have an idea about all of this before you begin looking for a home.  The very first question you have to ask yourself after deciding you want to own a home of your own is how much can I pay for a home (keeping mindful that your comfort level should be dictated by what you can afford and not what you would like).

I am not a lender. I can only give you general advice in this area. Let’s make that specific advice. After reading this primer, talk to a bonafide lender! Then talk to another. Keep talking until you find one that you are comfortable with. They will provide the rock that your dreams of owning a home will be built upon. The lender will gather information about you and tell you what you can borrow.

The most basic loan is a conventional loan.  Lenders like this sort of loan because it requires that the borrower (you) contribute at least a 20% down payment.  In the example of a $500.000 purchase, you will be putting at least $100,000 down and the lender will provide the rest of the money. Each month you will make a payment that includes principal and interest.  If you do not have 20% down, you can receive a gift from parents or grandparents or anyone to make up the difference. You will need to provide the lender with proof that it is in fact a gift and not a loan. If you just don’t have the 20% down, you have other options.

The FHA guarantees loans. That just means that your lender will have insurance that some of the money you borrowed is guaranteed to be paid back. If you default, the insurance involved steps in. This guarantee allows lenders to loan money to people that don’t have the 20% down payment available. You still have to have at least 3.5% of the purchase price available, and there are limits on how much money you can borrow. The credit demands are a bit less restrictive. Oh, and you still go through the underwriting process. The FHA has rules about who can qualify and their criteria must be met. Every month you will have a payment that includes principal and interest and the mortgage insurance premium (yep, you have to pay the insurance. if you don’t like that, put 20% down).

Veterans have loan guarantees available to them as well. They can get a VA loan. This type of loan is from lenders but it is guaranteed by the Veteran’s Administration. Another feature of the VA loan is that you don’t have to have any money down. This sounds great, but the flip side is that you will have a higher mortgage and you will have  VA fee as well. The VA doesn’t lend the money. Just like the FHA, they guarantee a portion of the loan. That’s right, you pay the premium for the protection.

In some areas, the USDA guarantees loans. It is very similar to the VA in that, you don’t have to put any money down. Again, remember your loan amount will be higher and your payments will be higher as well. This is a great program if you are purchasing a home in an area where these loans are available.

Of course there are all sorts of hybrid loan types out there. There are terms that vary with lenders.

Things to know.  An ARM is an adjustable rate mortgage.  Simply put, the interest rate is fixed for a short term and then it can go up or down depending on the market. Usually, there is a cap on the interest rate (i.e. the highest amount the interest can be).  Lenders offer these loans at attractive rates. You should always consider what you can afford at the market rate today, that means the size mortgage you are comfortable paying at market rates.  Use the lower rate as a saving not a method to qualify for more home  (if variable rates are lower, borrow less and invest the saved money). NOTE: that is just my opinion. I really believe borrowing money, hoping that your income will go up when the rates go up is a fast track to foreclosure.

An interest only loan is another product some lenders offer. Not a bad deal for the lender. You move in. You pay interest on the loan until the interest only term runs out and then your payment shoots up like a rocket ship on rails. Oops. You can’t pay and the home goes into foreclosure. Interest only loans only have the interest of the lender at heart.

So it is not really confusing. There is a conventional loan and then there are other products available to those that do not have sufficient money saved to buy a home. Lots of people have used the FHA guaranteed loans and VA guaranteed loans and USDA supported loans. They are good loans. As a matter of fact, all loan products are good products if they are used by the right borrower.

Buying a home is a major step. I think it is wise to have some money set aside to invest in your purchase.  Of course, you may use a loan product that does not require that you put that money into the purchase of the home. Home ownership is not cheap. The money should be set aside for maintenance and upkeep. It will be your home after all.

If you have any questions, talk to your lender. If you are in the DC area and do not have a lender, I will provide you with a list of three names. You can call them all.

Once you have been pre-approved and are ready to begin the search, well, that”s my area of expertise. Once you are in my hands, I will review where you are with the lender, offer some advice about fine tuning the financing and then I will listen to you tell me a tale of your dreams and set out to assist you in making those dreams come true.

As always, I am only a phone call away…. 301-509-5111

The DC housing market … why is it so hot

Every recent market report seems to add the caveat that DC is an anomaly. Most markets are still attempting to recover from the 2006 crash. DC took a bit of a dip, but is roaring back. How can this be happening?  The economy is certainly not much better today than it has been for several years. Federal workers haven’t seen a raise in pay for a few years. If all economic indicators remain uncertain, why are homes in DC costing more every month?

The answer is as plain as day.  DC has jobs.  Very few places across the country can make the same claim. DC is a small 10 square mile area. There are only so many homes that will fit. Engineers and builders and architects can do a lot of things …. they can not create more dirt. Space is limited in DC. Put those two factors together and you have recipe for rising home prices (regardless of the economy).

This little chart covers the phenomena.  At the top, the various places new residents come from are depicted.  People moving to DC come from Universities (college dorms or off campus shared housing), their parent’s home, homes they own in other parts of the country or homes they rent elsewhere.  They want to live in or near DC and begin a search. Almost every last one of them jumps on the internet and begins their search there.  After all, there are hundreds of thousands of websites that share available homes in DC.  The majority of the people searching do not understand that the accuracy of the data is often outdated or limited at best.  For every single home/town home/row home/condo listed there is just one property. How that property is displayed has more to do with syndication by agents and brokers than it has to do with the actual property. (A word to the wise: If you want to be more successful in your search, contact an agent in the area. Talk to someone that knows more about the area than can be revealed in wikipedia or some local towns site. Boots on the ground, an ability to listen and then share information is the best way to discover DC (or any other area for that matter).

housing flow chart

As always, DC has more people wanting to live here than there are places to live.  More buyers than available homes creates an imbalance and that old supply and demand process takes over.  Multiple bids appear, prices continue to rise and the market remains “hot”.  Regardless of promises that might be made by some, the truth is you may not find a home you are seeking for the price you are willing or able to pay.  I certainly would never guarantee that home prices will continue to rise, but I promise you that I can see nothing in the marketplace that will slow down the DC market in the near or distant future.

If you are considering a move to DC, you need factually based assistance.  You need to begin the process now, rather than later. You need to begin putting together a comprehensive home buying plan today.  Remember, a comprehensive plan begins with a discussion with a lender. Know what you can comfortably afford. Then, and only then, take the next step. Contact an agent that knows DC. Speak with someone that knows the difference between Adams Morgan and Madame’s Organ. Have a conversation with some one that understands the difference between Petworth and what is a pet worth, the difference between NOMA and no mas or the difference between the Capitol and Capitol Hill.  Subtle differences of a few blocks can add 30 minutes to an hour or more to your commute each day. A map of the subway (Metorail Line) does not include information regarding ease of use or ease of transfer.  A google map of DC will not reveal the walking score of a neighborhood.

DC is my town. I was born here. I know the neighborhoods. I know the Metro stops. I know the nightlife. This is a great place to live. Before you move here and decide on an address, don’t you think we might need to talk.  My phone number is 301-509-5111.

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