These kinds of defaults, especially tax and insurance shortfalls, can often be resolved if brought to the borrower’s attention early in the process. Yet, reverse mortgages were previously excluded from New York’s law requiring:
Now, thanks to legislation that went into effect in 2018, reverse mortgage borrowers facing a foreclosure get both a 90-day notice and the right to a settlement conference.
With a regular, forward mortgage, the borrower gets a lump sum and makes monthly payments covering principal and interest to repay the loan.
On the other hand, with a reverse mortgage, which the Federal Housing Administration (FHA) usually insures, known as a "Home Equity Conversion Mortgage" (HECM), the borrower gets payments from the lender, which become the loan. The payments to the borrower may be in the form of a lump sum (subject to some limitations), monthly payments, a line of credit, or a combination of monthly installments and a line of credit.
For both forward mortgages and reverse mortgages, New York law requires the lender or servicer to send a notice to the borrower 90 days before starting a foreclosure. The notice must provide, among other things, information about how to cure the default and a list of government-approved housing counseling agencies located near the borrower. (N.Y. Real Prop. Law § 1304).
If the mortgage is a reverse mortgage, the 90-day notice must explain the type of default that triggered the foreclosure, like:
Additionally, if the default is due to the borrower’s failure to pay property taxes, water and sewer charges, or to have homeowners' insurance, the letter must say that the borrower can cure (resolve) the alleged default by repaying the servicer for any amounts it paid.
The notice also must include information about:
If the borrower doesn’t resolve the matter within 90 days of the notice date, the servicer may begin a foreclosure (sooner if the borrower doesn’t live in the home as a primary residence).
For foreclosure actions involving owner-occupied properties, New York law requires the court to hold a mandatory settlement conference within 60 days after the servicer files proof with the court that the borrower received the complaint and summons, the first official step in a New York foreclosure. (N.Y. Civ. Prac. Laws & Rules, Rule 3408).
When it comes to reverse mortgages, the conference is required when the foreclosure is triggered by anything other than the death of the last surviving borrower, like a tax or insurance delinquency. Even if the foreclosure is due to the last surviving borrower's death, the court must hold the conference if:
At the settlement conference, the lender and homeowner attempt to reach a mutually agreeable way to avoid foreclosure. For more information on settlement conferences in New York, go to the New York State Unified Court System website.
To protect vulnerable senior citizens in the state, New York legislators passed a law regulating lenders’ activities after borrowers default on HECMs. The law requires lenders to notify the state’s Department of Financial Services (DFS) about an imminent reverse-mortgage foreclosure.
Lenders also have to:
The law took effect on April 14, 2021.
Hiring a lawyer to represent you at a settlement conference or during a reverse mortgage foreclosure is often a good idea. A lawyer can help you negotiate a way to avoid foreclosure, protect your legal rights in the foreclosure process, and advise you about potential defenses to the foreclosure.
You might also consider consulting with a HUD-approved housing counselor to learn more about foreclosure avoidance options.
]]>If a significant amount of time lapses between when you stop making mortgage payments and the lender initiates a foreclosure, or restarts one against you, the action might violate the statute of limitations.
When applicable, the statute of limitations can be a strong defense against a foreclosure.
In some states, the statute of limitations for foreclosure is six years, based on the right to enforce a promissory note under the Uniform Commercial Code (UCC). In others, the statute of limitations for written contracts applies. But other states have a specific statute of limitations for foreclosure. And in other places, the relevant statute of limitations is the one for enforcing a security interest in land, like one created by a mortgage or deed of trust. In these states, a lender may foreclose even if the statute of limitations for the underlying note has passed.
So, exactly how long the limitations period lasts is quite different among the states. Again, in some states, it's six years, but in others, the period could be ten to twenty years, or shorter or longer.
Sometimes, you can quickly locate the statute of limitations for a foreclosure in your state by browsing your state’s statutes, which are often available online at your state legislature's website. But foreclosure statute-of-limitations laws can be tough to find, and how courts interpret and apply the laws can vary.
Ask an attorney if you need help determining the statute of limitations that applies to your situation.
Determining the length of a statute of limitations is sometimes challenging, but determining when it starts can also be an issue. Sometimes, the statute-of-limitation clock for an unpaid installment begins when the default, like a missed payment, occurs. Some courts treat each missed payment as a new default that restarts the clock. Or the statute of limitations might start to run when the loan becomes due (on the loan's maturity date, say 30 years after the first installment is due).
The limitations period can also commence when the lender accelerates the loan after the borrower defaults. Once the loan is accelerated, the full outstanding balance becomes due. The lender can begin a foreclosure if the borrower doesn't pay off the debt. After acceleration, the loan changes from an installment contract to a debt that's due in a single, lump-sum payment.
Again, the law varies from state to state, so talk to a lawyer if you need help figuring out when the statute of limitations for a foreclosure begins to run in your state.
If the lender starts foreclosure proceedings after the statute of limitations has expired, it doesn't have the right to foreclose.
The statute of limitations is an affirmative defense to foreclosure, which means the borrower must bring up the issue in the foreclosure. You must raise this defense before a judge, which is easier in a judicial foreclosure than a nonjudicial one.
If you don't address the statute of limitations, the defense is waived, and the lender can continue the process.
If the statute of limitations runs out during the foreclosure, then you can't raise it as a defense to the action. So, in this scenario, even if a foreclosure takes years to complete, you don't have a defense to the foreclosure based on the statute of limitations.
Example. Say your lender filed a foreclosure lawsuit in June 2024, but the statute of limitations runs out in December 2024 while the foreclosure is still pending. In this situation, a statute-of-limitations defense isn't available. To comply with a statute-of-limitations law, the lender only needs to start the foreclosure before the deadline expires.
If the lender stops the foreclosure, which might happen if the lender discovers a procedural error or if a court dismisses the action and then refiles the case after the statute of limitations has expired, you might be able to raise this defense. So long as the lender didn't revoke the loan's acceleration (called "decelerating" the loan), if the lender restarts the case, it must do so within the statute-of-limitations period.
Continuing with the example above, if the foreclosure was dismissed in October 2024, the lender would need to restart the foreclosure before December 2024 to meet the statute of limitations. But if you make a payment in the interim, this payment would usually reset the statute of limitations.
Also, the statute of limitations generally restarts if the lender decelerates the loan by giving clear notice that it's canceling the acceleration and permitting you to keep making payments. However, state law on this matter varies.
Entering into a repayment plan or considering a borrower for loss mitigation, like by accepting loan modification trial payments, doesn't necessarily decelerate the loan. Once again, state law differs on what constitutes deceleration of a loan.
The laws on statutes of limitations and foreclosures are complicated and are different from state to state. You’ll most likely need an attorney to help you review your ability to raise a defense based on the statute of limitations and argue it in court if you decide to go this route.
Also, remember that any given foreclosure or legal situation has many potential claims and defenses. So, consider consulting with local counsel or a legal aid organization to explore all possible defenses available in your particular situation.
]]>This law, among other things, requires servicers to provide preforeclosure help to borrowers, prohibits dual tracking, and requires servicers to appoint a single point of contact to assist borrowers in their loss mitigation efforts. (Federal laws also protect homeowners facing foreclosure in California.)
HBOR's protections generally apply to first mortgages and deeds of trust on owner-occupied homes and don’t have more than four units. Almost all loan servicers must comply with HBOR.
California's Homeowner Bill of Rights went into effect on January 1, 2013. It reformed some aspects of the state's foreclosure process to help mortgage borrowers. The Homeowner Bill of Rights was part of California's former Attorney General Kamala D. Harris’s response to the foreclosure crisis. It largely came about as a result of the national mortgage settlement between 49 states and individual banks.
On January 1, 2018, many HBOR provisions were replaced with new ones, a change widely considered to benefit lenders and servicers, not homeowners. Then, on September 14, 2018, Governor Jerry Brown signed Senate Bill No. 818, which permanently reinstated the Homeowner Bill of Rights' expired provisions that protect homeowners' interests.
HBOR prevents a servicer or lender from recording a notice of default, the first official step in a typical California foreclosure, until 30 days after the servicer has made contact, or has satisfied contact attempt requirements, with a delinquent borrower to discuss foreclosure alternatives. (Cal. Civ. Code § 2923.5).
Under HBOR, the servicer must try to contact the borrower in person or by telephone to assess the borrower’s financial situation and explore options to avoid foreclosure.
During the initial contact, the servicer has to advise the borrower of the right to request a subsequent meeting. If requested, the servicer has to schedule the meeting to occur within 14 days. Any meeting may occur telephonically. (Cal. Civ. Code § 2923.5.)
The assessment of the borrower’s financial situation and discussion of options may occur during the first contact or at the subsequent meeting scheduled for that purpose. In either case, the servicer has to give the borrower the toll-free telephone number made available by the United States Department of Housing and Urban Development (HUD) to find a HUD-certified housing counseling agency. (Cal. Civ. Code § 2923.5).
A HUD-approved housing counselor can provide information (for free) about different ways to avoid foreclosure.
A notice of default may be recorded when a mortgage servicer hasn't contacted a borrower if the failure to make contact occurred despite the due diligence of the mortgage servicer.
“Due diligence” means the servicer must attempt to contact the borrower by sending a first-class letter that includes the toll-free telephone number made available by HUD to find a HUD-certified housing counseling agency. After sending the letter, the servicer must try to contact the borrower by telephone at least three times at different hours and on different days. If the borrower doesn't respond within two weeks after the servicer meets the telephone call requirements, the servicer must send a certified letter with return receipt requested. (Cal. Civ. Code § 2923.5).
The servicer must provide a way for the borrower to contact it in a timely manner, including a toll-free telephone number that provides access to a live representative during business hours. (Cal. Civ. Code § 2923.5).
If the borrower notifies the servicer in writing to cease further communication regarding the mortgage loan account, the servicer doesn't have to continue to try to contact the borrower. (Cal. Civ. Code § 2923.5).
Dual tracking happens when a servicer simultaneously reviews a borrower for a loan modification or other foreclosure avoidance alternatives while at the same time going ahead with a foreclosure. In the past, a lender or servicer could foreclose even while a loss mitigation application was pending. The California Homeowner Bill of Rights prohibits the dual tracking of foreclosures in California. Federal law also restricts dual tracking.
Under HBOR, if a borrower sends the servicer a complete application for a first lien loan modification at least five business days before a scheduled foreclosure sale, the servicer can't record a notice of default, notice of sale, or conduct a trustee's sale while the application is pending, and until:
To minimize the risk of borrowers submitting multiple applications for first lien loan modifications for the purpose of delay, the servicer only has to review a subsequent loss mitigation from a borrower if a material change in the borrower's financial condition has happened. (Cal. Civ. Code § 2923.6).
Under HBOR, in most cases, if a borrower's application for a first lien loan modification is denied, the borrower gets at least 30 days from the date of the written denial to appeal and to provide evidence that the mortgage servicer's determination was in error. However, some smaller loan servicers don't have to give you the opportunity to appeal the decision. (Cal. Civ. Code § 2923.6).
Under HBOR, if your servicer denies your modification application, the servicer must:
A net present value (NPV) assessment evaluates whether it is more cost-effective for the investor to provide a borrower with a loan modification or foreclose. As part of the NPV assessment, the servicer usually takes into account the following:
The expected cash flow from a loan modification is also typically part of the NPV calculation. The servicer generally looks at a borrower's income, credit score, and mortgage debt information, including the unpaid principal balance, the original loan amount, the remaining term, and monthly payment information.
The NPV test is pass/fail. You usually either pass or fail an NPV test when it comes to loan modifications. If the test results reveal that a loan modification is NPV positive, then you generally get a loan modification, subject to investor restrictions. That's because the investor would get a greater return from modifying the mortgage rather than foreclosing. But if the test results are NPV negative, a foreclosure is more financially beneficial to the investor.
But how can a foreclosure be more financially beneficial for the investor than a loan modification? After all, once a loan is modified, the borrower resumes making payments and paying interest on the loan. However, in many cases, borrowers who get a loan modification default again in the future and end up in foreclosure anyway. The NPV test takes this possibility into account and estimates the likelihood that the borrower will eventually fall behind in payments again, even if a loan modification is granted. If a borrower is likely to default again, the investor will let the foreclosure proceed because it makes more financial sense to foreclose sooner rather than later.
The servicer isn't allowed to continue foreclosing, like by recording a notice of default or notice of sale or holding the foreclosure sale, until:
You can appeal a loan modification denial only if:
The servicer can't charge fees to apply for a loan modification or late fees while a loan modification application or appeal is pending. (Cal. Civ. Code § 2924.11(e),(f)).
During the foreclosure crisis, homeowners who called their servicer to get help with mortgage problems typically had to explain their circumstances to several different representatives repeatedly. Under HBOR, a servicer must promptly establish a single point of contact upon a borrower's request who asks for a foreclosure prevention alternative. The servicer must also give the homeowner one or more direct means of communication with the single point of contact. (Cal. Civ. Code § 2923.7.)
The point of contact must be an individual or a team of personnel who can:
The single point of contact will remain assigned to the account until all loss mitigation options are exhausted, or the account is current.
This provision doesn’t apply to banks that foreclosed on 175 or fewer residential properties with no more than four dwelling units in the prior year. (Cal. Civ. Code § 2923.7).
HBOR prohibits robosigning. Under HBOR, servicers must review foreclosure documents and ensure they're accurate, complete, and supported by reliable evidence about the borrower’s loan, the loan’s status, and the servicer’s right to foreclose. (Cal. Civ. Code § 2924.17).
Homeowners may sue the lender or servicer for material violations of certain HBOR sections. Potential relief includes:
Also, if the court finds that the violation was intentional, reckless, or resulted from willful misconduct by a servicer or lender, the court may award the borrower the greater of treble actual damages or statutory damages of $50,000. (Cal. Civ. Code § 2924.12).
The protections afforded to homeowners under California's Homeowner Bill of Rights generally apply to first lien mortgage loans for properties that are:
Smaller servicers (entities that conduct fewer than 175 foreclosure sales per year or annual reporting period) are exempt from some of the procedural requirements. (Cal. Civ. Code § 2923.6.)
Talk to a foreclosure attorney if you think your servicer has violated HBOR. You might be able to stop the foreclosure until the servicer complies with the law or sue for damages.
]]>Now, though, federal law strictly limits the ability of servicers to foreclose on a borrower while also working out a loan modification or other alternative. Some states have enacted similar restrictions.
In the past, it was typical for servicers to proceed with foreclosures while telling the homeowners they were in the running for modifications or other loss mitigation options. Usually, the homeowner would end up with whichever was completed first, typically a foreclosure.
Because of this practice, called "dual tracking," many homeowners who were sure that a loan modification was forthcoming were shocked to lose their homes.
Now, federal law restricts servicers from taking certain steps during the foreclosure process if the homeowner is working on securing a loan modification or another alternative to foreclosure.
Some states have this type of law as well.
The Consumer Financial Protection Bureau, which the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 established, issued mortgage servicing rules that went into effect on January 10, 2014, after being codified into federal law. Among other things, the rules prohibit dual tracking.
When can foreclosure start? In most cases, a servicer can't initiate a foreclosure until the borrower is more than 120 days delinquent on the mortgage obligation. This period provides the borrower ample opportunity to submit a loss mitigation application.
Also, the servicer can't start the foreclosure process if a borrower submits a complete loss mitigation application and the application is pending. So, if you submit all of the required paperwork, the foreclosure can't start until:
When can foreclosure proceed? If you submit a complete loss mitigation application to your servicer after the foreclosure has started but more than 37 days before a foreclosure sale, the servicer can't move for foreclosure judgment or order of sale, or conduct a foreclosure sale, until one of the three events described above happens. However, a servicer generally doesn't have to review multiple loss mitigation applications from you unless you bring the loan current after submitting one. (12 C.F.R. § 1024.41)
Some states, like California, Nevada, and Minnesota, have a Homeowner Bill of Rights prohibiting the dual tracking of foreclosures. Under these state laws, servicers must either grant or deny a first-lien loss mitigation application before beginning or continuing the foreclosure process. Even if the lender denies the loan modification, it can't foreclose until any applicable appeals period has expired.
A few months after California passed its Homeowner Bill of Rights, a homeowner who had submitted a complete loan modification application successfully used the law to get a preliminary injunction to stop the foreclosure sale in the case of Singh v. Bank of America, 2013 WL 1858436 (E.D. Cal. May 1, 2013). In this case, the servicer never informed the homeowner of its decision regarding the homeowner’s loan modification application before proceeding with the foreclosure. Eventually, the parties settled, and the case was closed.
In Colorado, a law that went into effect January 1, 2015 (Colo. Rev. Stat. § 38-38-103.2), gives the public trustee (the party that administers Colorado foreclosures) the power to stop a foreclosure sale from occurring when a homeowner is in the process of applying for an alternative to foreclosure or the homeowner has accepted and is in compliance with a loss mitigation option, such as a loan modification.
Talk to a lawyer to find out if your state has a law prohibiting dual tracking.
If you think your servicer is dual tracking a foreclosure and your loss mitigation application, consider talking to a foreclosure attorney who can advise you on what to do in your particular circumstances.
To learn about different foreclosure avoidance options and get help preparing a loss mitigation application, consider making an appointment to talk to a HUD-approved housing counselor.
]]>So, depending on the situation, if you have an Ocwen mortgage (or one serviced by a subsidiary), you might be able to make claims against Ocwen or the current loan servicer for illegal practices related to handling your mortgage loan. You could have a defense to the foreclosure if the company violated state or federal mortgage servicing or foreclosure laws.
Also, if you're having trouble making your mortgage payments, you can apply for loss mitigation.
Ocwen is a company founded in 1988 to provide residential mortgage servicing services, focusing on servicing subprime and defaulted loans, where borrowers were more likely to have financial hardships or trouble making payments. Since the company was started, Ocwen personnel frequently interacted with borrowers who were delinquent or were at risk of becoming delinquent on their mortgage loans and needed loss mitigation assistance. In these interactions, Ocwen often failed to provide meaningful assistance.
As a result, Ocwen has faced multiple allegations of servicing violations over the years. For example, in 2012, the Consumer Financial Protection Bureau (CFPB), 49 states, and the District of Columbia sued Ocwen for loan servicing violations under federal and state law. The case was settled in December 2013, and many borrowers with mortgages that Ocwen serviced received mortgage relief in the form of principal reductions or cash payments. (See below for more information on the Ocwen National Mortgage Settlement.)
However, despite this multibillion-dollar settlement, several lawsuits and settlements have alleged that Ocwen continued to skirt the law when servicing mortgage loans.
Now, Ocwen Financial Corporation services and originates mortgage loans through its subsidiaries PHH Mortgage and Liberty Reverse Mortgage. Ocwen has all but stopped using the name "Ocwen."
If you have a PHH Mortgage or Liberty Reverse Mortgage, you have an Ocwen mortgage.
To get foreclosure relief, you must apply through your loan servicer, likely PHH Mortgage or Liberty Reverse Mortgage. Generally, you must apply to the company's home retention department (sometimes called a "loss mitigation" department).
Depending on your circumstances and goals, you might qualify for a forbearance, repayment plan, or loan modification. For example, you might qualify for a modification like a Fannie Mae or Freddie Mac Flex Modification if either one of those entities owns your loan or a proprietary (in-house) modification.
Generally, to be eligible for a loan modification, you must have experienced a financial hardship, such as the death of an income-earning co-borrower, or a divorce with an associated loss of household income, and have sufficient income to make modified payments. However, the exact criteria to qualify for loss mitigation varies depending on the program, investor requirements, and your circumstances.
If you want to give up the property but avoid a foreclosure, you might qualify for a short sale or deed in lieu of foreclosure. The requirements for qualifying for either of these options also vary depending on the situation. Again, contact your loan servicer to find out what foreclosure alternatives are available to you.
An investigation into Ocwen’s foreclosure activities during the foreclosure crisis revealed extensive loan servicing misconduct, including:
To hold Ocwen accountable for these servicing violations, 49 state attorneys general, the District of Columbia, and the CFPB reached a settlement with Ocwen Financial Corporation and its subsidiary, Ocwen Loan Servicing, in December 2013.
The settlement required Ocwen to provide the following forms of relief to eligible borrowers.
The settlement required Ocwen to pay $125 million to specific borrowers who went through a foreclosure between January 1, 2009 and December 31, 2012. To receive a cash payment, Ocwen or one of the companies purchased by Ocwen (Litton Loan Servicing LP and Homeward Residential Holdings LLC, which was previously known as American Home Mortgage Servicing, Inc. or “AHMSI”) must have been the loan servicer at the time of foreclosure.
Borrowers had to meet specific criteria to get a payout. Each successful claimant received an equal portion of the $125 million, around $1,150 per claimant.
The settlement also ordered Ocwen to provide $2 billion in principal reductions to eligible underwater borrowers at risk of foreclosure. To accomplish this, Ocwen offered write-down loan modifications to eligible borrowers. (A “write-down” loan modification reduces the principal balance on the loan. A lower principal balance results in lower monthly payments.)
In addition, the settlement required Ocwen to comply with the standards for servicing loans developed as part of the national mortgage settlement involving Ally/GMAC, Bank of America, Citi, JPMorgan Chase, and Wells Fargo. While Ocwen's obligation to comply with the national mortgage settlement standards expired in early 2017, these standards are mostly included in the federal laws that took effect on January 10, 2014.
You can learn more about the Ocwen settlement at the CFPB’s website and on the settlement website.
Even after the settlement, Ocwen and its main successor, PHH Mortgage Corporation, have allegedly continued to violate the law when servicing mortgage loans, as evidenced by numerous regulatory actions and lawsuits against the company.
So, if Ocwen or an Ocwen subsidiary currently services your mortgage and you think you're being treated unfairly or illegally—particularly if you're in foreclosure—you should talk to a lawyer as soon as possible.
]]>The ability-to-repay rule (12 C.F.R. § 1026.43(c)) generally requires lenders to make a reasonable good faith determination of the consumer's ability to repay a residential mortgage before making the loan. Under this rule, a lender must consider a borrower's income, employment status, credit history, and other relevant factors to determine whether the borrower can repay the debt.
The lender can't use an introductory or "teaser" rate to determine the borrower's ability to meet the terms of the loan agreement. So, if a mortgage loan has a low interest rate that could rise at some point (for example, an adjustable-rate loan), the lender must make a reasonable effort to determine if the borrower can make the higher payments too.
The ability-to-repay rule was implemented in response to the 2008 financial crisis.
In the early 2000s, lenders often gave out mortgages without giving a second thought as to whether borrowers could actually afford the payments. Lenders regularly skipped verifying the borrowers' incomes and, in many cases, offered low initial teaser interest rates that would eventually adjust and lift the monthly payments to an unaffordable level.
These actions contributed to the subsequent mortgage crisis when thousands of homeowners fell behind in payments and went into foreclosure, which ultimately led the country into a recession.
Congress responded by passing the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act). This law gave the Consumer Financial Protection Bureau (CFPB) the authority to implement the new requirements of the Dodd-Frank Act and adopt new rules to protect consumers in mortgage transactions.
In part, the rules set out an "ability-to-repay" requirement for virtually all closed-end residential mortgage loans. (A "closed-end loan" is a loan that must be repaid in full by a specified date.)
The ability-to-repay rule provides eight specific factors that the lender must consider to make a reasonable, good-faith determination that the borrower has a reasonable ability to repay the loan. Those factors are:
The rule doesn't restrict the lender from considering additional factors if it so chooses.
Here are some situations when the lender doesn't have to comply with the ability-to-repay rule.
Under certain circumstances, the lender doesn't have to comply with the ability-to-repay rule if it is refinancing a borrower from a risky mortgage, such as an interest-only loan (when you pay only the interest without paying down the principal) or a negative amortization loan (when the loan principal increases over time, even though you're making payments) to a more stable one, such as a fixed-rate mortgage.
So, it's easier for lenders to help borrowers who have adjustable-rate, interest-only, or negative-amortization loans refinance into a standard mortgage.
While the rule applies to most mortgages, it doesn't apply to:
Certain creditors, such as particular nonprofit organizations and loan programs, are also exempt from the rule.
Evaluating a borrower's ability to repay is complicated and can result in significant liability for lenders if they get it wrong. So, the ability-to-repay rule protects lenders from such liability when making "qualified mortgages." The rule presumes that a lender who makes a qualified mortgage has met the requirements of the ability-to-repay rule.
Qualified mortgages generally don't have the risky mortgage features that contributed to the mortgage crisis. For example, qualified mortgages typically can't have:
With this rule, you would think that lenders wouldn’t give out loans to borrowers who can't afford them, but that might not always be true. Fortunately, remedies are in place.
If you take out a mortgage and subsequently have difficulty repaying the loan, you could bring an action seeking to recover damages, alleging your lender failed to make a reasonable, good-faith determination of your ability to repay before giving you the loan (assuming no sudden and unexpected job or income loss happened after the loan origination and that it's a mortgage covered by the rule). You must file your action within three years of the violation. (15 U.S. Code § 1640(e)).
A violation of the ability-to-repay provisions can result in damages under the Truth in Lending Act (TILA) of actual damages, statutory damages, costs, and attorneys' fees. The damages can include an amount equal to the sum of all finance charges and fees the borrower paid unless the lender shows that the failure to comply was not material. (15 U.S. Code § 1640, 15 U.S. Code § 1639(h)).
If you raise a violation of the ability-to-repay rule as a defense to a foreclosure action, the lender could be liable for certain penalties and damages, as well as attorneys' fees. (A three-year statute of limitations applies to ability-to-repay claims brought as affirmative cases, but no time limit applies on raising this as a defense to foreclosure, although the amount of recoupment or setoff is limited.)
You could also file a complaint against the lender with the CFPB. The CFPB will send your complaint directly to the lender for review. Most companies respond in 15 days.
To ensure you don't have issues with the ability-to-repay rule when applying for a mortgage loan, you should begin by thoroughly assessing your financial circumstances before you even look for a loan. Consider your income, expenses, and overall financial situation so you won't even apply for a mortgage you can't afford.
Carefully review all loan paperwork before signing it. Make sure you understand the terms, such as the interest rate, fees, and any potential risks associated with the loan, like an interest rate that might adjust. Ask for clarification if you have any questions or concerns about whether you'll be able to manage making the payments.
You have certain rights under the ability-to-repay rule. First, in the lending process, you have the right to go through a fair assessment of your capability to repay a loan. A lender must evaluate your entire financial circumstances to ensure they don't burden you with a mortgage loan you can't afford.
Again, you have the right to file a complaint with the CFPB if you think a lender didn't evaluate your ability to repay fairly. To complain about a lender's determination of your ability to repay, gather all relevant documentation that supports your position, including proof of income, your job status, or other financial factors you think the lender didn't appropriately consider.
You also have the right to file a lawsuit for violations of the ability-to-repay rule or use violations as a defense against foreclosure.
To learn more, go to the CFPB’s website and search for “Ability to Repay and Qualified Mortgage Standards Under the Truth in Lending Act (Regulation Z).” Then follow the link.
]]>But now, federal law restricts when and how servicers may purchase force-placed insurance on your behalf. Also, homeowners must receive specific notices before the servicer purchases a force-placed insurance policy.
Most mortgages and deeds of trust require that the homeowner maintain adequate insurance on the home to protect the lender’s interest in case of fire or another casualty. This type of insurance also covers the loss of your personal property if it's stolen, damaged, or destroyed.
If you let your homeowners' insurance coverage lapse, assuming you don't have an escrow account, the servicer can purchase insurance coverage at your expense. Again, this type of insurance is called "force-placed" or "lender-placed" insurance.
Force-placed insurance doesn't cover your personal belongings. Also, these insurance policies tend to be costly because of the uncertainty about what might happen to the home if the borrower isn't keeping up with the bills.
Under federal law, the servicer must reasonably believe that the borrower has failed to maintain insurance coverage on the home before purchasing a force-placed insurance policy.
For example, if the borrower’s insurance agent or provider contacts the servicer to inform it that the bill is overdue, this contact would provide a reasonable basis for the servicer to think that coverage isn't in place.
The servicer must then send two notices to the borrower before obtaining force-placed insurance. The notices must request that:
The servicer must send the first notice at least 45 days before purchasing a force-placed insurance policy. The servicer must then send a second notice (a reminder notice) no earlier than 30 days after the first notice and at least 15 days before charging the borrower for force-placed insurance coverage. This notice must include the cost of the force-placed insurance or a reasonable estimate. (12 C.F.R. § 1024.37).
The servicer generally must keep an existing insurance policy in place if the borrower has an escrow account from which the servicer pays the insurance bill, even if the servicer needs to advance funds to the borrower’s escrow account.
But the servicer doesn't have to continue existing coverage and can purchase a force-placed policy if it has a reasonable basis to believe that:
If the borrower provides evidence that insurance coverage is in place, the servicer must:
Servicers sometimes wrongfully buy pricey force-placed insurance for a borrower’s home even though the borrower already has coverage and, in some cases, even after the borrower provides evidence of that insurance. Because force-placed insurance is so expensive, a homeowner having trouble making payments or is behind on the loan might go into foreclosure when it becomes much more difficult to get current.
If your servicer improperly places insurance on your home, you can send the servicer a “notice of error.” Under federal law, if you send your servicer a notice of error letting the servicer know that it made a mistake on your account, the servicer is supposed to fix the error within a specific period.
If your servicer doesn’t respond to your notice of error, consider talking to an attorney, especially if a foreclosure is imminent or has already started.
You may also file a complaint with the Consumer Financial Protection Bureau (CFPB). The CFPB will send your complaint to the servicer and try to get a response, generally within 15 days.
But be aware that sending a notice of error or filing a complaint with the CFPB is highly unlikely to stop foreclosure proceedings. You'll most likely need an attorney's assistance to halt a foreclosure.
Before getting a reverse mortgage, you should understand how they work and learn the associated risks and requirements. You also need to watch out for reverse mortgage scams.
Once you learn more about this kind of loan, including the upsides and downsides and all of the requirements and restrictions, you might think twice about getting one.
The Federal Housing Administration (FHA) created one of the first types of reverse mortgages, called the "Home Equity Conversion Mortgage" (HECM). A HECM is the most common reverse mortgage product available, accounting for around 90% of the total market.
With a HECM reverse mortgage, a borrower typically gets payments in the form of monthly payments or a line of credit from the lender. These payments then become the loan. The principal balance of the loan gets larger each time the lender sends a payment or when the borrower makes a draw on the line of credit until the borrower reaches the maximum loan amount. Borrowers can also get a reverse mortgage in a lump sum or a combination of monthly payments and a line of credit.
The loan amount is based on the equity or sale value of the house.
Reverse mortgages are only available for homeowners who:
You must also meet other requirements, such as you can't be delinquent on any federal debt, your home must be in good condition, and more.
The reverse mortgage loan can be called due under a number of different circumstances, like when the borrower:
Reverse mortgage lenders have historically been quick to call loans due and foreclose.
Under rules that went into effect in 2013, borrowers can't access as much of the value in their home compared to the maximum amount available before this time. Before 2013, reverse mortgage borrowers could take out 100% of the principal limit all at once. But this led to many defaults in the following years because borrowers had used up the equity in the home and couldn’t get more money or another loan.
Now, federal law limits the amount someone can borrow in the first year of the loan to the greater of:
Mandatory obligations include, for instance, existing mortgages and other liens on the property.
For example, suppose Janelle has no mandatory obligations (like liens or an existing mortgage) and qualifies for a $100,000 reverse mortgage. She may get only $60,000 in the first year. If Janelle takes out the reverse mortgage as a one-time lump sum, she forfeits the remainder of the available principal ($40,000). But Janelle could choose a partial lump sum and get the remaining principal as a line of credit or monthly payments.
If Janelle had mandatory obligations, she could receive more money to pay those off. Say Janelle has $70,000 of mandatory obligations (like a home mortgage and a judgment lien) and qualifies for a $100,000 reverse mortgage. She can receive $80,000 in the first year. (Mandatory obligations: $70,000 + 10% of the principal limit [$100,000 x .10 = $10,000]: $10,000 = $80,000.) Janelle then gets $10,000 while the other $70,000 goes towards paying off the existing mortgage and judgment lien.
With a HECM, the borrower is responsible for paying certain items, including:
To ensure a borrower can stay up to date on taxes and insurance, the lender assesses the homeowner’s financial situation when considering a reverse mortgage. If the lender determines that the borrower probably won’t be able to keep up with paying for these items, it creates a “set-aside” account as part of the reverse mortgage.
A "set-aside account" is an amount of money that is a portion of the loan, which the lender retains to pay the taxes and insurance in future years. If a borrower has a set-aside account, the borrower receives less money from the reverse mortgage.
If want a HECM, you'll have to complete a counseling session with a HUD-approved counselor beforehand. But a counseling session alone might not provide enough information for you to fully understand what you’re getting into.
HECM counselors have reported that it can take a couple of hours to explain how these mortgages work and cover all of the topics—including risks, costs, and consequences—that borrowers need to understand before taking out this kind of loan. This fact alone should give you an idea of how complex these kinds of mortgages are and that they're typically not a good idea. Even after a HECM counseling session, many borrowers still don’t fully comprehend the reverse mortgage's terms and requirements.
It is highly recommended that you proceed cautiously if you are considering taking out a reverse mortgage. Be sure you know the risks and consider talking to an estate planning, consumer protection, or elder-law attorney first.
For more information on reverse mortgages, visit the AARP’s reverse mortgage webpage at www.aarp.org/revmort. To learn more about HECMs, go to www.hud.gov and enter "Home Equity Conversion Mortgage" in the search box to find a list of relevant links.
]]>One of these rules, the "periodic statement rule," requires mortgage lenders and servicers to provide homeowners with prompt, regular, and accurate information about their mortgage loans. Under this federal law, servicers must send monthly statements, subject to a few exceptions, containing detailed information about your payment, delinquency, and who to contact for questions.
Among other things, the periodic statement rule says that the mortgage creditor or servicer must send periodic billing statements to the borrower. Under this rule, your mortgage creditor or servicer must provide you with a mortgage statement each billing cycle, usually monthly, that meets specific timing and content requirements.
The periodic statement must be delivered or placed in the mail within a reasonably prompt time after the payment due date or the end of any courtesy period provided for the previous billing cycle. (12 C.F.R. § 1026.41).
Generally, delivering, emailing, or placing the periodic statement in the mail within four days of the close of the courtesy period of the previous billing cycle is considered reasonably prompt.
Some types of loans are exempt from the requirements of the periodic statement rule, including:
The periodic statement rule requires that all of the following information be included in the billing statement.
The statement must show how much you owe, the payment due date, and the amount of the late fee if you submit payment after the courtesy period expires.
A breakdown of how much money per payment will be applied to principal, interest, and escrow, as well as the total of any fees imposed since the last statement and any past-due amounts, must also be contained in the statement. This information will help you track how your payments are distributed among the different categories.
Also, be on the lookout to ensure the servicer doesn't make an error, such as charging improper fees.
The statement must include a list of all transaction activity and a breakdown of payments you made since the last statement and since the beginning of the calendar year. It must also show how those payments were applied to principal, interest, escrow, fees, and suspense. The statement must include the date of the transaction, a brief description of the transaction, and the amount of the transaction.
The statement will also show you what happened to any partial payments (payments that were less than the total amount owed) you sent in.
Partial payments are often placed into a suspense account, which is used to temporarily hold funds until they're allocated. The nature of this type of account, what it is used for, and when it is used has often been confusing for borrowers. Now, statements must clearly indicate which funds were placed into suspense (if any) and explain what must be done for the funds to be applied to your account.
The statement must provide you with the following:
The purpose of this requirement is to ensure that you have access to someone who can answer questions about your account and so that any qualified written request is received and addressed by a specially-trained employee.
In addition, the billing statement must provide you with specific information relating to your account, including:
This requirement is designed to provide borrowers with improved information about their loan so they're not caught off guard when an interest rate adjusts, for example.
If you're 45 days or more behind in payments, the statement must provide particular information related to the delinquency, including:
If you’re behind in payments, this information will give you a good idea of what you need to do to get caught up. It will also assist you in making sure that the servicer doesn't make an error, like starting a foreclosure in violation of the law. For example, the servicer may not dual-track your loan.
Ultimately, the periodic statement rule is designed to ensure that you receive prompt, regular, and accurate information about your mortgage loan. To learn more about this rule and other mortgage servicing rules, go to the Consumer Financial Protection Bureau’s website or talk to a foreclosure lawyer.
]]>Regulation X, which implements the Real Estate Settlement Procedures Act (RESPA), requires most mortgage servicers to take certain steps and provide specific protections to borrowers facing foreclosure.
Under this federal law, servicers are supposed to work with borrowers who are having trouble making monthly payments by, among other things:
Soon after the borrower misses a payment, the servicer must contact the borrower by phone (or in person) and in writing.
If a borrower falls behind in payments, a servicer must attempt to contact the borrower to discuss the situation no later than 36 days after the delinquency and again within 36 days after each subsequent delinquency, even if the servicer previously contacted the borrower. If appropriate, the servicer must tell the borrower about loss mitigation options, like a modification, short sale, or deed in lieu of foreclosure, that might be available to the borrower.
But, if you filed for bankruptcy or asked the servicer to stop communicating with you under the Fair Debt Collection Practices Act (FDCPA), and the servicer is subject to this law, the servicer doesn’t have to try to contact you by phone or in person. (12 C.F.R. § 1024.39).
No later than 45 days after missing a payment, the servicer must inform the borrower in writing about loss mitigation options that might be available and must do so again no later than 45 days after each payment due date so long as the borrower remains delinquent.
However, the servicer doesn't have to provide the written notice more than once during any 180-day period. If you've filed for bankruptcy or asked the servicer not to communicate with you, it generally has to send a modified letter, subject to some exceptions. (12 C.F.R. § 1024.39).
The servicer must assign personnel to help the borrower by the time the borrower falls 45 days delinquent. (12 C.F.R. § 1024.40). The personnel should be accessible to the borrower by phone and able to respond to the borrower's inquiries.
When applicable, the servicer's personnel should help the borrower pursue loss mitigation options by advising the borrower about:
The servicer may assign a single person or a team to assist a delinquent borrower.
Federal law also restricts “dual tracking.” Dual tracking happens when a servicer simultaneously evaluates a borrower for a loan modification (or another loss mitigation option) while at the same time pursuing a foreclosure.
Servicers generally can't start a foreclosure (that is, make the "first notice or filing" required to begin the process) until the loan obligation is more than 120 days delinquent unless the foreclosure is based on a violation of a due-on-sale clause or the servicer is joining the foreclosure action of a superior or subordinate lienholder. (12 C.F.R. § 1024.41).
This 120-day period provides time for the borrower to submit a loss mitigation application.
When does a borrower become delinquent? A borrower is considered delinquent starting on the date a periodic payment sufficient to cover principal, interest, and, applicable, escrow becomes due and unpaid, until such time as no periodic payment is due and unpaid.
So, when can a foreclosure begin? In a judicial foreclosure, the foreclosing party can't file a lawsuit in court to start the foreclosure until you're more than 120 days delinquent. If the foreclosure is nonjudicial, the foreclosing party can't begin the foreclosure by recording or publishing the first notice until you're more than 120 days delinquent on payments. If your state’s foreclosure laws don’t require a court filing or any document to be recorded or published as part of the foreclosure process, the first notice is the earliest document that establishes, sets, or schedules a date for a foreclosure sale.
Even if a borrower is more than 120 days delinquent, if that borrower submits a complete loss mitigation application before the servicer makes the first notice or filing required to initiate a foreclosure process, the servicer can't start the foreclosure process unless:
If the servicer has already started a foreclosure and receives a borrower's complete loss mitigation application more than 37 days before a foreclosure sale, the servicer may not move for a foreclosure judgment or order of sale, or conduct a foreclosure sale, until one of the three conditions mentioned above has been satisfied.
The servicer generally doesn't have to review more than one loss mitigation application from you. But if you bring the loan current after submitting an application and then reapply, the servicer must consider your new application. (12 C.F.R. § 1024.41).
These laws apply to mortgage loans that are secured by a property that is the borrower's principal residence. The principal residence status determination depends on the property's specific facts and circumstances and applicable state law.
A vacant property might still be a borrower’s principal residence under certain circumstances. For example, when a servicemember who relocated due to a permanent change of station orders and was living at the property as a principal residence immediately before displacement intends to return to the property in the future and doesn't own any other residential property.
In most cases, the laws don't apply to:
A "small servicer" is defined as one that:
Small servicers don’t have to comply with the requirements previously discussed in this article, except:
If you're having trouble making your mortgage payments, consider submitting a loss mitigation application to your loan servicer. Once submitted, under federal law, the servicer has five days to tell you whether it needs more information so long as you submit the application 45 days or more before a foreclosure sale and, if so, what information it needs.
Generally, the servicer is required to evaluate the application for all loss mitigation options within 30 days, as long as you submit the complete application more than 37 days before a foreclosure sale.
Also, you generally get 14 days to appeal a loan modification denial as long as the servicer received the complete loss mitigation application 90 or more days before a scheduled foreclosure sale. If a complete loss mitigation application is received less than 90 days before a foreclosure sale but more than 37 days before a foreclosure sale, the servicer must give you at least seven days to accept or reject a loss mitigation offer. Remember, the servicer is required to review you for a loss mitigation option only once unless you bring the loan current after submitting your complete application.
If you have questions about your state's foreclosure process or the laws discussed in this article, consider talking to a foreclosure attorney.
Consider contacting a HUD-approved housing counselor to learn about different loss mitigation options or if you need help with your application.
]]>If you decide to take out a "high-cost mortgage," meaning the interest rate or fees exceed specific amounts, HOEPA provides you with protection against abusive lending practices. This law restricts loan terms and features.
It also provides enhanced remedies for violations in a private civil action.
HOEPA was enacted in 1994 as an amendment to the Truth in Lending Act (TILA).
Under HOEPA as originally passed, if a refinance or home equity mortgage loan met any of HOEPA’s high-cost coverage tests, the lender was required to provide special disclosures to borrowers and was subject to various restrictions on the loan terms.
In 2010, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act). This law amended TILA by expanding the coverage of HOEPA to include purchase-money mortgages (the mortgage you used to buy your home) and open-end credit plans, like HELOCs.
Additionally, the Dodd-Frank Act gave the Consumer Financial Protection Bureau (CFPB) the authority to adopt new rules to implement the new changes to HOEPA.
Again, HOEPA provides certain protections for borrowers if they take out a high-cost mortgage. (12 C.F.R. § 1026.32). A loan is considered "high-cost" if the borrower's principal dwelling secures the loan and one of the following is true:
You can determine if a transaction is a high-cost mortgage based on its APR.
A loan is considered a high-cost mortgage if its APR as of the date the interest rate is set exceeds the Average Prime Offer Rate (an annual percentage rate that is derived from average interest rates, points, and other loan pricing terms) for a comparable transaction on that date by more than:
A mortgage is also considered to be a high-cost mortgage if its points and fees exceed:
A transaction is a high-cost mortgage if there is a prepayment penalty:
If the loan is indeed a high-cost mortgage, a prepayment penalty isn't allowed.
If the lender offers you a high-cost mortgage, it:
These protections don’t apply if:
Before providing a high-cost mortgage, a lender must ensure that the borrower receives counseling on the advisability of such a mortgage from a HUD-approved counselor or a state housing finance authority. (12 C.F.R. § 1026.34).
If your lender violated HOEPA, you might be entitled to monetary damages. For example, TILA’s remedies in a civil action for a HOEPA violation can include a refund of the finance charges and fees paid, statutory damages, court costs, and attorneys’ fees. To get more information about HOEPA or high-cost home loans, talk to a real estate attorney.
Also, be aware that additional steps are often required in the foreclosure of a high-cost home loan. To find out if your state has any laws that affect the foreclosure of a high-cost home loan, talk to a foreclosure lawyer.
]]>If you accept the servicer's offer, you pay the skipped payments at the end of the loan (rather than, say, paying the overdue amounts in an immediate lump sum or through a repayment plan). In return, the servicer gets out of having to comply with some federal mortgage servicing requirements.
The law also provides you with other rights if the servicer decides to offer a deferral option.
Under the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act, homeowners with a federally backed mortgage loan, regardless of delinquency status, experiencing a financial hardship due directly or indirectly to COVID-19, could get a forbearance while the coronavirus national emergency declaration was in place. (This declaration ended on May 11, 2023.) A "federally backed mortgage loan" is a loan that's guaranteed or made by a federal agency, like the Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA), or owned or securitized by Fannie Mae or Freddie Mac.
But a forbearance isn't the same as loan forgiveness; you'll still owe the skipped payments after a forbearance period ends. Borrowers with Fannie Mae, Freddie Mac, and FHA-insured loans, for example, can pay these amounts through a payment deferral program or similar alternative in which the borrower defers (postpones) repayment until the end of the loan. However, borrowers with other types of loans might have to pay the missed payments in a lump sum or through a repayment plan.
Under Regulation X, which implements the Real Estate Settlement Procedures Act (RESPA), most servicers must take certain steps and provide protections to borrowers facing foreclosure.
For instance, if homeowners seek loss mitigation, the servicer has to try to get a complete application from them. It has to exercise reasonable diligence in obtaining documents and information to finish the application. The servicer then has to review the application for any loss mitigation option the borrowers requested, like a loan modification, and all other available possibilities. (12 C.F.R. § 1024.41(b),(c)).
A Consumer Financial Protection Bureau (CFPB) interim final rule allows servicers to get out of complying with some mortgage servicing requirements if they offer payment deferrals to borrowers who finish their coronavirus-related forbearances. (12 C.F.R. § 1024.41).
Specifically, the law says that a servicer may provide borrowers with a payment deferral based upon an evaluation of an incomplete application. If the servicer offers a deferral, it doesn’t have to try to get additional information from the borrowers to complete their application or evaluate the borrowers for any other loss mitigation possibilities. It also doesn't have to provide an incomplete acknowledgment notice.
A “payment deferral” allows borrowers to resume making their regular mortgage payments when a forbearance ends. The missed payments are added to the end of the loan term.
So, the borrowers don’t have to pay the skipped amounts in a lump sum, in a repayment plan, or through a loan modification immediately after the forbearance is over.
Under the amended law, borrowers who complete a coronavirus-related forbearance plan and accept the payment deferral option don’t have to come up with the missed payments until:
Also, the deferred amount can’t accrue interest, and the servicer can’t charge you a fee for picking this option. The servicer must waive all existing late charges, penalties, stop payment fees, and other similar charges once the borrower accepts the deferral option, too. (12 C.F.R. § 1024.41(c)(2)(v)(A)(2)). However, the law doesn’t say how you have to pay the deferred amount when it’s due. You might have to pay a lump sum or make additional installments at that time.
This law is effective as of July 1, 2020. But as of early October 2020, servicers are just starting to offer deferrals as borrowers complete their initial coronavirus forbearances.
The rule applies to all principal and interest payments forborne under a COVID-19 forbearance program. (12 C.F.R. § 1024.41(c)(2)(v)). So, this kind of payment deferral plan isn’t limited to just CARES Act forbearances. All borrowers with coronavirus-related forbearances, even those who don’t have federally backed mortgage loans, are potentially covered.
It also covers all principal and interest payments due and unpaid by a borrower experiencing a financial hardship due, directly or indirectly, to the COVID-19 emergency. (12 C.F.R. § 1024.41(c)(2)(v)). Accordingly, the law might apply even if the borrower didn't get a forbearance, but just owes mortgage payments incurred while experiencing a financial hardship due, directly or indirectly, to the coronavirus crisis.
The law covers forborne principal and interest payments, but not skipped escrow amounts, like for property taxes and homeowners’ insurance. So, the servicer can demand a lump sum (or additional installment payments) to repay escrow advances it made during the forbearance period or to cover an escrow shortage after the forbearance ends.
But borrowers with FHA-insured mortgages don’t have to worry about unpaid escrow amounts that accrued during a forbearance. That's because a COVID-19 National Emergency Standalone Partial Claim includes the full amount of forborne payments, including escrow amounts. Fannie Mae and Freddie Mac also require the servicer to include any escrow advances when offering their COVID-19 payment deferral program to borrowers following a CARES Act forbearance.
The amended law also gives homeowners new rights when a coronavirus forbearance is over, like ending the delinquency (that is, bringing the loan current) upon acceptance of the payment deferral option.
Under federal law, the servicer may start a foreclosure when the loan obligation is more than 120 days delinquent. So, generally, borrowers who are in a forbearance plan for more than 120 days, and complete the plan without bringing the loan current, could potentially face a foreclosure. But the amended law says that any pre-existing delinquency ends when the borrower accepts an offer for the deferral option. If you later fall delinquent on your mortgage payments after agreeing to this deferral option, the 120-day period starts again.
If your servicer doesn’t comply with this law, you can file a lawsuit under RESPA to recover attorneys’ fees, actual damages, plus up to $2,000 in statutory damages if a pattern or practice of servicer noncompliance exists. Consider talking to a lawyer if you think your servicer is treating you unfairly.
Also, if you can’t resume making your regular payments at the end of your forbearance, the deferral option won’t work for you. You might consider applying for a loan modification or looking into other alternatives. If you need information about ways to avoid foreclosure, consider talking to a lawyer. A HUD-approved housing counselor can also provide information about loss mitigation options (at no cost).
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