The tax returns for a borrower reports income of -$517. I don't think the LAR will allow a negative number to be input - should we just use $0?

It will not. HMDA requests 'gross' income - not 'net' income. There is no one who has negative gross income.

Of course, if you didn't rely on their income in making the credit decision, you would report NA.

That's true.

This was a loan that was originated, so we have to put it on our LAR, correct?

And...his tax return has $232 in wages, salaries and tips, $0 as the total income and $-517 as the adjusted gross income. What should I use?

I'd say $0 - since his gross income was less than $500.

Did you really use income to make the credit decision? Check your underwriting documentation. I would say that more likely than not, a negative income figure probably was thrown out of the decisioning of the loan. If underwriting did not use the income figure, report NA.

I think you should report NA either way. If you did use the income in making the credit decision, you would round down because it's less than $500. Zero isn't a valid entry, so you would use NA.

Awesome...thanks!

We tried to update the LAR, but you can't put "NA" in the Income field - you only put in whole dollars.

That sounds like a software issue. What do you use?

Jack Henry

What do you record for loans to businesses?

We've been putting whatever their income is...all of our apps on the LAR have an income figure.

If you are reporting income on business entities, you have errors. Too many errors in a key column (I believe income is a key column) and you could be cited, have to scrub and re-file your HMDA LAR (up to a couple of years prior), and possibly be fined depending on how everything else on your HMDA LAR looks.

You need to call Jack Henry and find out how to report NA income. It is possible that the system will convert anything less than $500.00 to NA. But you should definitely call them and find out.

We found out that if you put all zeros, the LAR will show "NA" as the amount of income.

Thanks for the help!

That's great. Now make sure you go back on loans to businesses and change them all to zeros.