How long must records related to mortgage transactions be kept by lenders and brokers?

The requirement for lenders and brokers to retain records related to mortgage transactions for at least three years is grounded in the need for maintaining compliance with regulatory standards. This duration ensures that there is sufficient documentation available for audits, investigations, and borrower inquiries, allowing for transparency and accountability in the lending process.

Keeping records for three years supports various legal and regulatory obligations, including adherence to federal laws such as the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA), both of which require lenders to provide accurate documentation of loan terms and conditions. This retention period also aligns with the typical duration for which disputes regarding mortgage transactions may arise.

Lenders and brokers must ensure that they have the proper systems in place to store and manage these records effectively for the full three-year period, thus facilitating easy access when needed for compliance checks or consumer assistance.