When it comes to reporting an applicant’s demographic information (race, sex, and ethnicity) for HMDA, the rule of thumb is that you “don’t touch it”. When you request the information from the applicant, even if you think they marked a wrong box or they write in something strange, for example, that they’re Martian, they are whatever they say they are. You don’t care, you don’t change it and you report the information on your HMDA LAR just as they provided it. This is one of many things to keep an eye out for when you are auditing/verifying your HMDA data prior to submitting your HMDA LAR.
David explains more in the video.