Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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Can anyone help me on this one? Has anyone heard of: "Adjustable Rate Mortgage Note-Pick a Payment Loan-Certificates of Deposit Index-Bi Weekly Payment?

Wells Fargo is foreclosing. The originator was World Saving Bank which changed it's name to Wachovia Mortgage then Merged with Wells Fargo Bank.

The complaint says that there is no need for assignments due to the mergers. Is that true. This is in Florida. How would there be a defense?

Any info would be appreciated.

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From the sound of the description of the mtg they have cobbled together quite a few descriptive terms of mtg loans and it sounds like you have them all rolled into one.  I think the legal term for it is a "jumble-mess"... j/k.

As to the issue of assignments when companies merge, as has been the case with World, then Wachovia, then Wells Fargo, and may well be another before it is over; anyway there is NO need for assignments since the receiving entity absorbed the business operation of the company(ies) that were absorbed.  There could be exceptions if they didn't wholly absorb the business operation, in other words if only the assets were assumed, then an assignment would be in order.  However in the case of World - Wachovia - Wells Fargo, I do believe that the whole business was merged or taken over, meaning assets and liabilities in total, so not assignment needed.

You defense essentially would be the same as what it would have been w/o the take over.  If you would have had a defense then, it would be the same now.  The odds of something having been lost or destroyed in such mergers is a flip of the coin, so it wouldn't hurt to make them prove their standing, at the very least.  Good luck on it.
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Thank you Varoom. This is not my mess. This belongs to someone else that I am trying to help. I don't know if they can use the lost note theme since a copy of this note is attached to the complaint as well as the merger documents. I am going to help them answer the complaint, they have about a week left to do so. But I don't know what the future will hold for this one. I guess I will have to dig deeper somehow.

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It may be possible that your mortgage is already sold to Wall Street in a trust by Wachovia before the merger . Find out . Send a request for production asking for all documents related to your loan, stating : Upon information and belief, loan #    is already sold to a securitized trust. Ask them to Produce the PSA. If Wachovia already sold your loan to Wall Street , then Well Fargo is not the owner of the note, not a party of interest.

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If that were the case, shouldn't you think that it should say; blah, blah certificate series 2006-4 vs. blah, blah....... If it was secritized??? I'm just asking...

Due to the fact that if it was secutizied it should state so. If it doesn't state that, than how do I go about finding this out???? The complaint says Wells Fargo, N.A. as the Plaintiff.

Any response would be greatly appreciated..

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William A. Roper, Jr.

I am unsure of the particulars of these particular acquisitions/mergers, but you need to bear in mind that while a merger may, in fact, have taken place, it is the Plaintiff's burden to prove that this is the case.

You and/or your friend need to do some thorough investigation and/or due diligence to determine rather precisely HOW this corporate succession proceeded.  You can do this privately and informally through investigation of state corporation and state or federal banking records, through the SEC, news reports and other avenues, or you could hit the plaintiff with discovery requests which require that they produce copies of certain documents.

The latter is a double edged sword, as the plaintiff's attorney probably doesn't have these but can get them.  Your friend might be better off appearing at trial with certified copies of documents for which the plaintiff has no evidence in reply.


You need to bear in mind that major financial institutions very often have many, sometimes even hundreds of various corporate subsidiaries.  Mergers of the corporate parents does not necessarily imply the merger of various subsidiaries.

Permit me to give you a fictional example.  Suppose that there are two banks contemplating a merger.  One is Monolithic Bank of Gotham, N.A., and the other is the Fifteenth National Bank of Indiana.  Both are national banks.  Both have parent holding companies.

The holding company for Monolithic Bank is Monolithic Financial Corporation.  The holding company for Fifteenth National Bank is "Fifteenth Corporation".

Each has a separately incorporated mortgage company.  Monolithic's mortgage company is Monolithic Mortgage, Inc.  Fifteenth's mortgage company is Fifteenth Mortgage Corporation.

Suppose that Monolithic Financial acquires Fifteenth Corporation.  The holding company now owns the bank, Fifteenth National Bank of Indiana, as well as the Fifteenth Mortgage Corporation.  But it does NOT own the mortgages serviced by Fifteenth Mortgage Corporation.

The merger of the holding companies doesn't necessarily imply the merger of the two banks which can still be operated separately.  Neither does it imply the merger of the two mortgage companies.

Consolidation of the mortgage companies very well may occur.  Suppose that the operations of both are consoldated into a single enterprise, Monolithic Mortgage, Inc.  This can be done in a variety of ways.  One way is to merge these two.  Another way is for Monolithic Mortgage, Inc. to buy the assets of Fifteenth Mortgage Corporation, including whole loans owned and mortgage servicing rights.  (The latter has the advantage of leaving any liabilities behind in the defunct corporation!)  There are different tax consequences to each which vary in effects depending upon financial circumstances.

If the succession is by merger, no separate transfer or assignment would be required.  If the transfer was through the sale of assets, then promissory notes would typically need to be indorsed and delivered, with the mortgage explicitly assigned in writing under the Statute of Frauds.

To consumers, these two approaches appear identical.  In both cases, Monolithic appears to succeed to Fifteenth's business.  But these are two very different approaches under the law requiring differing documentary paperwork.

Corporate filings with the state showing a merger and consolidation would probably be all that was necessary in the case of a merger.  The evidence of indorsement and delivery, as well as assignment would be required with the asset sale.

There is another aspect of the matter that merits careful scrutiny.  It is almost never the case that a mortgage company continues to own whole loan indebtedness.

Mortgage companies finance the loans they originate through so-called warehousing lines of credit.  And mortgage companies usually sell ALL of their mortgage production to permanent mortgage investors.  These can be large GSEs, such as FHLMC, FNMA and GNMA, or Wall Street institutional trusts.

Some mortgage companies which are subsidiaries of depository institutions also make loans which are portfolioed by their parent depository institution.  These loans are funded by certificates of deposit.

But note that in each of these cases, whether sale to a GSE, securitization or portfolio, the mortgage company ceases to own the loan.  It may service the loan, but it does not own it.

So to continue my example, a suit brought in the name of Monolithic Mortgage on a loan originated by Fifteenth Mortgage Corporation would be suspect for several reasons.  First, absent proof of a merger of these entities, there is no reason to believe that Monolithic succeeded to Fifteenth's interest at all.  Merger of the parent holding company or the banks is NOT enough.

But more importantly, it is unlikely that Fifteenth Mortgage was actually the owner of the debt for more than about sixty days.  It MIGHT have sold the debt to a GSE or institutional trust.  Or it might have sold the promissory note to the parent bank, Fifteenth National Bank of Indiana.

In the latter case, then a merger of Fifteenth with Monolithic Bank of Gotham, N.A. would probably vest ownership in Monolithic's hands.  Even so, then the bank could probably bring suit in its own name.  But the mortgage company could not truthfully claim to be owner.

There are some cases which seem to show that a servicer can sue on behalf of a mortgage investor in some jurisdictions.  Whether this is permissible depends upon state law.

So you can see that the actual owner of the debt is far from certain and even if the allegations are true, the plaintiff needs to prove its ownership.

Bear in mind that if the loan was sold by the mortgage company to its parent bank, then a merger of the banks would put the ownership in the hands of the surviving (acquiring) bank.  But this still would need to be proven.  

Start with a check of the corporate records at the Secretary of State's office in the states of incorporation.  Be sure to distinguish amongst various corporate affiliates of similar names.  Consider checking in more than one state where these are doing business.  Some states have records online for FREE (e.g. Massachusetts).  Others charge for records (e.g. Delaware and Texas).  Check the SEC filings.  Check filings with the Comptroller of Currency (oversees National Banks).

Things are not always as they seem!

The foreclosure mills working on behalf of plaintiff in foreclosure actions will never hesitate to gloss over or even misrepresent facts to obtain a quicker foreclosure without having to actually do the work of obtaining valid evidence.

If the plaintiff has misrepresented its rights to the instruments by succession, if you proved this at trial, you might very well WIN!  You will probably have to get past a motion for summary judgment first and if you use this matter to beat them on summary judgment, they will be ready for you at trial.  Keep some powder dry for the second assault!
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William A. Roper, Jr.

The Massachusetts Secretary of State's Office shows Wachovia Mortgage Corporation as a continuing extant entity.  See:

The most recent annual report (for year ending December 31, 2009) is shown to have been filed on March 4, 2010:

Wachovia Mortgage is shown to be a North Carolina corporation.


Similarly, the North Carolina Secretary of State is showing Wachovia Mortgage Corporation as a "Current-active" entity.  See:

The most recent NC filing would appear to be an annual report for 2009 filed on March 12, 2010:

These documents would appear to me to rather conclusively prove that Wachovia Mortgage Corporation has NOT been merged into any other entity.

Wachovia Bank is a different story!

Perhaps the MS Fraud site administrator might want to create a page within the Legal Lounge to hand corporation records of the various large institutional mortgage servicers for the benefit of all.  Massachusetts and North Carolina are particularly good sources for these records because of their seamless online presentation of corporate filings at no charge.

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Wow, your post gives such an insight to the merger and assets acquired.

What documents should I ask in the discovery if Plaintiff says that they have accquired the loan thru the merger ? Is there an inventory lists of assets that they accquire in the  merger signed off by both parties ?
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William A. Roper, Jr.

I am shooting from the hip here and you and others would be very well advised to seek and find some case law actually explaining how mergers work, but generally when a company is merged its assets are simply folded into the acquiring firm and the old company (being merged into the survivor) ceases to exist.

The two entities become essentially ONE and there would therefore not be an explicit need to transfer assets as such.

The corporate filings with the Secretary of State's Office in the state of domicile (and possibly in other states where the companies are doing business as foreign corporations) should reflect the fact of such merger and the combining of interests.

Not only are the assets merged, but so are the liabilities.

So, for example, suppose that a company had various causes of action against it, for example tort liability for negligence in an accident, liability to employees for sexual harassment or discrimination, or even fraud.  With a merger these liabilities would fold right into the merged company.

For this reason, there is some value in simply selling the assets to the surviving company and then distributing all or most of the cash back to the shareholders of the company which is being dissolved.  This brings the assets over, but orphans the liabilities in the old corporate shell.  When the company being acquired collapses and surrenders its corporate charter, the liabilities are difficult to charge against the acquirer.

In the context of mortgage companies, the two principal potential liabilities are causes of action for origination fraud and liability under required repurchase agreements associated with sellers and servicers' warranties upon sale (the originator agrees to repurchase the loans when its representations are found to be false).

Generally speaking, selling the mortgage servicing rights to the acquiring entity, bringing across real estate, furniture and equipment through purchase and then collapsing the old company (after declaring a dividend to redistribute the cash proceeds back to the parent) has a tendency to orphan these liabilities in the old company.  This is least effective where suits and claims are already underway, as these sales may been seen as fraudulent transfers to defraud creditors.  It is most effective where the transfers are completed and the collapse has taken place well before suits are filed.


While the orphaning of liabilities is a good reason to sell rather than merge, tax considerations may create contrary incentives.  Generally, companies that lose money are allowed certain types of tax loss carryforwards and carrybacks.  In a carryback, current losses are applied against past profits to reduce tax liability for prior periods, resulting in tax refunds.  With a carryforward, the operating losses for one year may be used to reduce tax liability in future years.

To the extent that a company has significant operating losses, the associated tax loss carryforward can often be used by an acquiring company to reduce the parent's tax liability when a consolidated tax return is prepared.  If the subsidiary is completely collapsed, the tax loss carryforward may be lost.

This may be a reason to continue to at least nominally operate the most defunct company, sometimes for years!

Bear in mind that I am giving some general theory.  I haven't read from authoritative business law or tax law material in this area for years.


Since most of the answers relating to mergers can be garnered from public records, I would probably NOT focus on obtaining this material in discovery.  (One sometimes valid objection to discovery production can be that the material sought is readily available with reference to public records!)  Asking for the material is going to take the plaintiff to school that you are onto their corporate identity charade.

Instead, I would seek to obtain certified copies of the corporate records from one or more jurisdictions and simply plead that the plaintiff is not the owner of the indebtedness.

I think in most places, you wouldn't have to explain WHY you are denying the ownership.

Let them come into court alleging that the plaintiff is the owner through merger.  Your proof will show otherwise, defeating this claim!

Be sure to do your own due diligence as to the law in your jurisdiction.  And run all this past a qualified lawyer!  You might also consider finding an expert witness on business law and mergers, however, such expert witness would probably have to be identified prior to trial tipping the plaintiff off as to your understanding of their deception, although this also varies by jurisdiction (in some places, you only have to disclose experts IF ASKED).

Please remember, I am NOT a lawyer and this is NOT legal advice!  Read the law yourself and get competent legal counsel!
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William A. Roper, Jr.
Sometimes, it is helpful to give some real world examples as illustrations.

I searched in Google for Mergers and Acquisitions 2009.  Amongst the deals I located was the merger of Indevus Pharmaceuticals with Endo Pharmaceuticals.


Simply because the transaction is described as a merger, it does not follow that Indevus was actually merged into an existing company.

I went to the Massachusetts Secretary of State's web site and looked up the corporate documents for Indevus.  I found that Indevus had filed a name change renaming the company from "Indevus Pharnaceuticals, Inc." to "Endo Pharmaceutical Solutions, Inc.".


This does NOT reflect an actual merger through the pooling of interests.  Instead, it seems to indicate that the company was purchased by Endo and then its name changed as a part of a rebranding.

This is very clearly borne out within the Endo Pharmaceutical Quarterly Report on Form 10-Q.  Here is how Endo describes the transaction in its report (at page 50): 

"Indevus Acquisition.  On February 23, 2009 (the Acquisition Date), the Company completed its initial tender offer (the Offer) for all outstanding shares of common stock of Indevus. Through purchases in subsequent offering periods, the exercise of a top-up option and a subsequent merger (the Merger), the Company completed its acquisition of Indevus on March 23, 2009, at which time Indevus became a wholly-owned subsidiary of the Company.

. . .

Indevus was a specialty pharmaceutical company engaged in the acquisition, development, and commercialization of products to treat conditions in urology, endocrinology and oncology.  Following the completion of the Merger, Indevus was renamed Endo Pharmaceuticals Solutions Inc. "


ENDO PHARMACEUTICALS HOLDINGS INC filed this Form 10-Q on 05/04/10


In this particular case, we have a so-called merger, in which the company is simply being acquired and rebranded Only the name has changed.  There has not necessarily been any transfer of assets.

(It is likely that Endo has in fact cherry picked a few assets and purchased these.  Since there seems to be some litigation in which Indevus is the defendent, it seems likely that the parent is carefully and selectively moving a few assets out of hards way, but will do so in a deliberate way which cannot expose it to charges of defrauding the creditors.  But any such transfer would have to be memorialized in writing by transfer documents.)

This is NOT an example of a real merger.  But illustrates how carefully looking at the records shows the actual status of each company post-merger.

If Invedus was a mortgage company, it wouldn't need to show any transfer from Invedus to "Endo Pharmaceuticals Solutions Inc.".  This is simply the same company with a new name.  By contast, if a suit was brought in the name of "Endo Phamaceutical Holdings, Inc." (the parent), a transfer of the promissory note and assignment of the mortgage would need to be proven.  Absent such an express transfer, Endo Pharmaceuticals Solutions Inc. would be the owner, NOT Endo Phamaceutical Holdings, Inc.


I will try to find an example of a true merger to show you what that paperwork would look like!

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William A. Roper, Jr.
An Example of a Merger: 

Chase Manhattan Mortgage Corporation and Chemical Residential Mortgage Corporation

I hadn't expected to have such great difficulty finding an example of a true merger, but I have been looking for sometime with little luck.

I think that the merger of Chase Manhattan Mortgage Corporation and Chemical Residential Mortgage Corporation, as described in an April 1, 1996, news release is probably such a case.  At least the news release describes a combining of operations:

"EDISON, N.J., April 1 /PRNewswire/ -- Effective today, Chase Manhattan Mortgage Corporation and Chemical Residential Mortgage Corporation have combined operations. The new entity retains the name Chase Manhattan Mortgage Corporation. The consolidation is a result of the merger of The Chase Manhattan Corporation and Chemical Banking Corporation on March 31, 1996.

Thomas Jacob is Chief Executive Officer of the new Chase Manhattan Mortgage Corporation and Richard A. Mirro is Chief Operating Officer.

With $27 billion in combined originations for 1995, the new Chase Manhattan Mortgage"

Take a look at the records shown at the Massachusetts Secretary of State:

Here is the record for "Chemical Residential Mortgage Corporation", which is shown to have been "Manufacturer's Hanover Servicing prior to a name change filed May 22, 1992":

The certificate of foreign corporation is shown to be withdrawn on March 27, 1998.

By contrast, the record for "Chase Manhattan Mortgage Corporation" is shown at this record:

This firm is shown to have had its name changed from Margaretten & Company, Inc. on December 22, 1994, and from Chemical Residential Mortgage on April 8, 1996.  This firm is shown to have withdrawn as a foreign corporation on June 8, 2006.  This probably coincided with another merger with JP Morgan.

See also Chase Mortgage Services at:


When firms merge, only one survives.  The other is folded into the survivor. 

This should be directly reflected in the corporate filings within the domicile of the corporation (its home registration).  In other jurisdictions, when the old company is merged into the new, there is no longer a need to continue to register the old company separately as a foreign corporation and the foreign corporation registration is usually withdrawn.


When both companies continue to be registered, this reflects the fact that both companies continue to separately exist, perhaps owned by a common corporate parent, perhaps with one owning the other.  But these are still distinct corporate entities!


I am speculating that these reflect true mergers.  The incorporation papers filed in Delaware or New Jersey probably show for sure.  But the withdrawal of teh old entity is at least consistent with a real merger (though it could also reflect dissolution after sale of assets).

Gary Wait or someone else with good investigative skills may be able to help you find the records if you have difficulty.  But these are basically public records available to all either free or for a relative modest records charge.  You may need certified copies to use as evidence in court.


This may also be of assistance.

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I would say your post is right on here as to the description of mergers, versus acquisition of stock.  Often times reporting is not completely accurate and no one challenges the record to correct incomplete data.

In the case of Wells Fargo acquiring Wachovia, it did so by issuing stock at a rate of .19 shares of WFC for each share of Wachovia (WB) stock that investors held.  So if you had 1000 shares of WB you now have 190 shares of WFC.  Wells Fargo did in fact acquire all the assets and liabilities of Wachovia, but as you alluded to in one of your other posts, Wachovia is still an operating company, in name only because it is all under the Wells Fargo umbrella of companies.

More particularly as it might relate to a foreclosure, as was the question of the OP, it would most likely be conducted in the name of Wachovia, not WF... since Wachovia is still an operating entity (business).
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Mr Roper; You did it again for me....... I am trying to help as many people as I can. I have learned so much from you. I have to say that this one is a real doosy. They make it look so professional. But I know that there is something fishy....

They have attached to their complaint a copy from Office of Thrift Supervision, Department of Treasury. It states that World Savings is to amend the savings bank charter and bylaws to change it's name to Wachovia Mortgage FSB and reflect a change in location.......The other thing attached to the complaint is from Comptroller of the Currency Administrator of National Banks...It states; Conversion of Wachovia Mortgage FSB to a National Bank with the name Wells Fargo Bank National Association. This is also certification to merge Wells Fargo Bank Southwest N.A. with and into Wells Fargo Bank N.A.

I am going to research this further...The plaintiff is Wells Fargo NA...And the mortgage was one of those pick a payment loan.

Again, THANK YOU......
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William A. Roper, Jr.

Look very carefully at the identity of the "Lender" as shown within the alleged promissory note and alleged mortgage, deed of trust or other mortgage security instrument.  Make note of the precise name as used on these instruments.  "World Savings Bank" is NOT the same as "World Savings Mortgage Corp", etc.

For the plaintiff to be the owner and/or the holder, there needs to be a very clear chain of title from the original Lender to the plaintiff.

This can be through indorsement and delivery of the promissory note and assignment of the mortgage OR it could be through a succession of name changes and/or REAL mergers by combination and succession or a combination thereof.

The attachments you describe sound like the sort of proof that the plaintiff ought to be furnishing to the court.

If the name of the original Lender changed, this would reflect that the newly named entity was really the SAME as the original entity and no other transfer would be necessary.  If one bank acquired the other and these were merged into a single combined entity, this would also tend to entitle the survivor to exercise the rights of the predescessor, IF the predescessor had a valid interest in the alleged indebtedness.

Also, in mentioning corporate charters, I may have confused or misled you as to national bank charters.  National banks ARE chartered by the Comptroller of Currency, NOT the secretary of state of a particular state.  But if the bank holding company also has a separare mortgage company, this mortgage company tends to have a state charter.

When an incorporated mortgage company changes its name, this is memorialized is state corporate filings in the state of domicile of the corporation, but is also probably recorded with the Secretary of State in every other state in which the company is registered as a foreign corporation.

By contrast, a national bank would tend to seek the change from the Comptroller of Currency.

State banks are typically chartered by a state banking authority,often a Commissioner of Banking or the state Department of Banking.

Thrift and savings bank charters traditionally have come in both state and federal flavors, with the Federal Charters at one time being supervised by the Office of Thrift Supervision.  (I am unsure if that is still the case.)

The point here is that there is a Balkanized regulatory structure.  Name changes and mergers of banks and thrifts have to be approved by the appropriate supervisor.  Other corporate names can be pretty much changed at will by fiat, as long as teh new name doesn't infringe upon existing trademark or step upon the name of another existing entity.

There is nothing inherently sinister about the documents you identify as the plaintiff's proof.  It is all going to come down to precisely what the entities names are, whether there is agreement with the original alleged instruments and whether the asserted chain is continuous, consistent and correct.


Also, even if there is a continuous chain to the plaintiff, this still does not prove that the plaintiff actually owns the loan.  The trouble is that this seems to prove it!  As mentioned in previous posts, most mortgages are sold to institutional investors.  There ARE exceptions as to loans which are portfolioed by depository institutions and this might be such an instance.

But if the loan was sold, the originator might have retained the servicing, creating an appearance as though the origiantor continued to have an interest.

Only through effective discovery are you likely to gain any traction and find any evidence which shows that the loan actually was sold and is no longer owned by the plaintiff.  But bear in mind that the foreclosure mills will resist discovery, object to any production and will also engage in other discovery abuse, including giving false responses under oath.

Absent some thread of evidence or inconsistency, you are going to have a difficult time proving lack of standing if the plaintiff's asserted chain of title appears to be continuous and regular, even if they are lying about the ownership.
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Lionel Tribbey
Maybe one or two of these will get you in a closer ball park... I've only spent 10 minutes on this puzzle so I'm not sure if these will really go anywhere but at first glance ....

"CODI (Certificate of Deposit Index): The Certificates of Deposit Index is a 12- month moving average of the monthly yields on 3 month certificates of deposit as published by Federal Reserve Board. The CODI is announced the first business Monday of each month and remains effective from that day until the first business Monday of the following month. Historically, CODI does not move up or down as rapidly as market interest rates such as the Bank Prime, Federal Funds rate or Treasury bill rates because of the method used to calculate the index. "

Google "Wachovia Adjustable Rate Mortgage Note-Pick a Payment Loan-Certificates of Deposit Index" to get these.

Good luck

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