For how long must mortgage lenders retain records after the loan closing?

Mortgage lenders are required to retain records for a specific period after the closing of a loan to ensure compliance with various federal regulations, including those from the Consumer Financial Protection Bureau (CFPB) and the Truth in Lending Act (TILA). The correct answer indicates that lenders must keep these records for 60 months. This five-year period allows for adequate oversight and review in case of audits or legal inquiries related to the loan. It ensures that there is a reliable paper trail for all transactions, giving consumers access to necessary documentation and protecting the integrity of the lending process.

The retention period is significant in protecting consumer rights and supporting transparent lending practices. A shorter retention period, such as 12 or 36 months, would not provide sufficient stability for review and compliance checks, while an excessively long period, like 120 months, may be seen as burdensome and unnecessary in light of efficiency requirements in record keeping. This balance between compliance, consumer protection, and practical administration is what underscores the importance of the 60-month retention rule.