Would you always report n/a for income purposes for withdrawn loans on your HMDA LAR. The instructions indicate to report the income amount you relied on in making you credit decision. In this case, you did not rely on any income because you did not get to the point of making a credit decision (otherwise it could not be reported as a withdrawn loan). Any thoughts on taking this approach.

If you made a decision and then they withdrew (Action Taken Code 2), then you would definitely have an income. If the applicants withdrawn before you made a decision, I would agree that income would be "NA".

This thread caught my eye and I had to throw this in...I agree that a bank can justify reporting income as NA if an application is withdrawn prior to a credit decision --- but if the applicant has disclosed income on the application then would it not be permissable to report based on that income, even though it is not verified, etc.? We have been reporting in this manner for years and I've been examined by OCC, Fed and now FDIC and this has never been questioned. I believe as long as you are consistent in how you report income on withdrawn apps it should be acceptable either way.

Here is the answer I received from HMDA help. It does not seem to agree with the HMDA Getting it Right Guide that states that you enter the gross annual income that your instition relield upon in making the credit decision.

"You report income information that you have collected on withdrawn loans; we realize that the loan could have been expressly withdrawn by the applicant before a credit decision is made; however, we also realize that when you report an action taken code of 4 that you did not use the income information because you did not have to make any decision, BUT you still report the income information. It does not become an optional field or one that you input NA in the field."

What HMDA Help said makes sense to me since the only time you can report NA is if you don't use the income in making a credit decision, the applicant was an employee or the application is to purchase a multi-family dwelling.

SAR524 for a withdrawn loan no credit decision was made, so no income was used. This is based on the definition of withdrawn loan. The only time you have the option of reporting the collected income is when you did not rely on the income when you made a credit decision (codes 1,2 or 3). It is then optional to report N/A or collected income.

I believe it has just been customary to report the income collected for withdrawn loans and that is the way that HMDAhelp would like you to report even though they cannot point to a regulatory site that states this.

Many banks now operate with automated underwriting. Our applications are entered in the underwriting system very quickly. If an income is on the application, it is in the underwriting system, and I would have a hard time justifying that it was not looked at, even if the application was withdrawn. Other banks may have different systems, but it seems more consistent to me to always use the income in the underwriting system, whether it is verified or not.