If a loan is denied for a self-employed borrower because the underwriting analysis shows an average net loss for the past two years, what income is reported?

This is the response we got from the hmda help desk in 2009:

"Report the income as NA in cases where the income is negative."

Can someone (anyone) explain to me how anyone can have a negative income?

the underwriting analysis shows an average net loss

So the gross income used to underwrite the loan was $100,000 but the operating costs and other expenses exceeded the $100,000 gross income therefore the borrower did not have the ability to repay the loan, but his gross income is $100,000 and is the gross income used in the credit analysis.

aka HMDA Helpless. That response was totally wrong. You just can't have income that is less than 0, you either have income or you don't.

For HMDA you report gross income, not avg, not net, not projected,,,,

Ditto what Dan said, in his example you would report $100,000 even though they had a net loss.

Sorry for the rant.