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FAQs
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Are Fannie Mae and Freddie Mac still needed? What is the need for these 2 government sponsored enterprises in a free capitalist economy?
Fannie and Freddie have multiple missions which are needed to support a free market economy (which is slightly different than a capitalist economy).Free markets, and more so capitalism, does not always work well on its own. There is something called market failures. Market failures can happen in several ways. Two of particular interest are1) failure to meet the conditions of a free market (so many players in the market than none has market power over competitors or customers (none too big to fail also) and everyone in the market has the same information and access).2) Tragedy of the Commons - the interest of everyone is at odds with the individual interest of each individual in the market.The first in particular has been important for Fannie and Freddie. One of their core functions is to provide stability to the financial capital markets. Capital markets will sometimes freeze. Capital and lending will dry up. Fannie and Freddie ensure that there will always be money available for home buying by guarantee the purchase of mortgages from banks so they are not on bank balance sheets subject to reserve requirements. They are also active participants in the bond markets. Freddie was particularly noted and credit with restarting trading on the bond market following the 9–11 terrorist attack. There was a lack of confidence in private sector to price and start trading. Freddie Mac first, and soon followed by Fannie Mae, as part of their mission put a bond for sale to stimulate the markets. This is not the only example of providing stability.Another area where capitalism fails is providing access to mortgages and housing regardless of race, religion, sexual orientation, etc. Freddie and Fannie can ensure that access to provided these markets again by assuring lenders they will take on the risks, whether those risks are real or perceived risks from discrimination.There is also a public good from the innovation that Fannie and Freddie provide. They invented the mortgage backed security, which resulted in a win for banks and borrowers. Again the private sector failed to create these and took time to adopt them as well. Then prior to the housing crisis went way too far in lending to risky people because they could lay off the risk on bond holders. They actually took market share away from both GSEs resulting in the question of whether they were needed or not anymore. As we saw with the resulting housing crisis. At first both GSE started purchasing these bad loans as part of an effort to stabilize the market and then were eventually taken over so effective refinance the bad loans off the balance sheets of finance companies and then monetize it through coordinated efforts with the Federal Reserve, keeping it all off the Federal Budget.Overall I think there is a role for both Fannie and Freddie but it’s time to revisit what that role is and how it should be managed given the realities of today’s market places. They need to be a source to address market failures and provide innovation without being a burden on the tax payer. They need to do this by taking a slice of the market that they can use to effectively self fund. Sure, the private sector might meet some of that need, but it’s the balance of addressing all of the need at a small cost.
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How is a single-member LLC owned by a nonresident alien taxed? Should I fill out a W-8 or am I deemed not to have U.S. activities?
Based on the facts as you have presented them:You are selling a product, as I see it, and not a service - although there's something of a gray area here, this is more like an intangible asset than it is providing a personal service for compensation. That product is being offered to US-based customers who are using it in the US - your focus is building up your market in the US, and you are doing that under the auspices of an LLC which is US-based. Looking at all of the facts and circumstances surrounding the conduct of your business, as you have presented them and as the IRS will look at them if asked, I conclude that you are conducting a business in the US and your income from US sources is effectively connected with the conduct of that business in the US, which means that you are subject to US taxes on that income.With that conclusion, Form W-8ECI is the proper form to provide to your US sources if you wish to prevent withholding on the income from your business.I want to add one point, since this seems to be coming up frequently - while an LLC is a disregarded entity for tax purposes, it is still a legal entity in the US - and the fact that you, as a nonresident alien, choose to operate a business under the auspices of a US-based LLC is a piece of evidence that can, under the appropriate set of facts and circumstances, be used by the IRS to support an argument that you are conducting business in the US and that your income from that business that comes from US sources should be taxable in the U.S. You should not assume that as a nonresident alien you have carte blanche to create a US LLC, operate a business under its auspices, and then at tax time argue that the income should not be taxable in the US because the LLC is a disregarded entity. The IRS will look at all of the facts and circumstances surrounding your business, including your choice of a US-based entity as the face of your business, and while that decision alone won't be dispositive, it will certainly be considered.
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How is this a scam? Friend got offered $40 (cash) to cash out a check for a stranger. The “to” line was blank and they told him to fill in his own name. How does this benefit the scammers once it gets deposited in his bank account? Who’s at fault?
Banks provide very quick ‘clearing’ of checks so you can access the funds, but if you read the fine print the check hasn’t actually cleared until some considerable time later.So the Scam works like thisI pay you $40 to do me the favorI give you a check for $1000 for you to cash for me with the Payee blankYou fill in your name cash the check and see $1000 in you accountYou give me the $1000A week later the originating bank confirms the check is not valid and your bank reverses out the $1000Your bank charges you a bad check fee and suggests you contact me for paymentYou find out I have vanished up a net $960 of your money
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If you work for yourself doing government contracts and American Express asks for you to show them a current pay stub, how would you provide that? Is there a form that has an earnings statement that you can fill out yourself?
It seems to me you should just ask American Express if they have form you can fill out. It seems odd they would want to see an earnings statement, but if you need to show some sort of proof of income, typically in the absence of a pay stub, your most recently-filed tax return should suffice.I'd really ask them first before automatically sending them your tax returns though.
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Would there be a problem if I fill out the section of the UK visitor's visa application for my kids and wife the same as mine where it asks “how much is the cost of the trip personally to you?” because I am sponsoring the trips?
No, it would not be a problem. Yes, you may fill in the exact details. For instance, if the cost of the trip is GBP 5,000/- in your application then you go on putting GBP 5,000/- in your wife’s and kids’ application form as well. The important thing is to establish the genuineness of intentions for getting the standard visitor visa UK.
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People also ask
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What is a government sponsored enterprise and how does SignNow support them?
A government sponsored enterprise (GSE) is a financial services corporation created by Congress to enhance the flow of credit to specific sectors of the economy. SignNow offers tailored solutions that enable GSEs to streamline their document signing processes, ensuring compliance and efficiency in their operations.
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How much does SignNow cost for government sponsored enterprises?
SignNow provides competitive pricing plans designed to meet the unique needs of government sponsored enterprises. Our flexible pricing options can accommodate both small and large organizations, ensuring you get the right features without overspending.
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What features does SignNow offer for government sponsored enterprises?
SignNow offers a range of features tailored for government sponsored enterprises, including secure document sharing, customizable templates, and advanced eSignature capabilities. These features help GSEs improve their workflow and enhance document security.
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Can SignNow integrate with existing systems used by government sponsored enterprises?
Yes, SignNow provides seamless integrations with various systems commonly used by government sponsored enterprises. This ensures a smooth transition and enhances productivity while maintaining compliance with regulatory standards.
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What are the benefits of using SignNow for a government sponsored enterprise?
Using SignNow enables a government sponsored enterprise to increase operational efficiency by automating document workflows. Additionally, our secure eSigning process helps in maintaining compliance with necessary regulations, making it a smart investment for GSEs.
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Is SignNow compliant with government regulations for sponsored enterprises?
Absolutely! SignNow adheres to strict industry standards and compliance regulations, making it a reliable choice for government sponsored enterprises. Our platform employs advanced security measures to protect sensitive information.
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How does SignNow enhance document security for government sponsored enterprises?
SignNow employs state-of-the-art encryption and secure storage solutions to protect documents used by government sponsored enterprises. This commitment to security ensures that your documents remain confidential and secure throughout the signing process.
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