Q: On a denied application, what income amount should be reported if the borrower's tax return shows negative income?
A: The HMDA instructions state that an institution should report the gross annual income relied on in making the credit decision (not the net income). If the institution did not rely on the income or did not request income, it should report the income as “NA.”
This can be found in - HMDA FAQ#19 of the FAQs. The Federal Reserve Board FAQs can be found at: https://consumercomplianceoutlook.org/2011/second-quarter/hmda-and-cra-data-reporting/