How long must an MLO keep records for each loan transaction?

Mortgage Loan Originators are required to retain records related to each loan transaction for a minimum of three years. This timeframe is important for several reasons, primarily linked to regulatory compliance and the ability to provide necessary documentation during potential audits or investigations. Keeping records for three years ensures that lenders can meet the requirements set forth under various regulations, including those from the Consumer Financial Protection Bureau (CFPB) and other state and federal laws.

The three-year retention period aligns with federal regulations, which dictate the duration for which financial documents must be stored to protect both lenders and consumers. This includes maintaining documentation related to loan applications, disclosures, and other pertinent information. Retaining such records is essential not just for compliance, but also for providing transparency in the lending process and ensuring a trail of accountability.

In contrast, the other options suggest longer or shorter retention periods, which do not align with the established requirements. Therefore, the correct answer emphasizes the regulatory standard for record-keeping that is crucial for MLOs in their fiduciary responsibilities.