How long must records be retained if the loan was approved?

For loans that have been approved, the correct duration for retaining records is four years from the date of closing. This timeframe aligns with regulatory requirements and best practices in the lending industry, which stipulate that lenders need to maintain accurate records of all loan transactions for a specific period after the closing date. This retention period is crucial for compliance with various state and federal laws. It provides a safeguard for the lender to reference the exact terms and details of the loan, should any issues or disputes arise. By keeping these records for four years, lenders ensure they have the necessary documentation available to respond effectively to any inquiries or audits that may occur during that timeframe.

Other durations, such as one year or two years, do not meet the compliance standards set forth for record retention in the mortgage lending industry, while retaining records indefinitely would not be practical and could lead to unnecessary storage challenges.