If a loan is declined on July 15, how long must the mortgage loan originator retain the record of the loan file?

The correct duration for retaining records related to a loan application, including those that are declined, is four years from the date of the decline. This requirement aligns with regulatory guidelines that aim to ensure compliance and provide a clear audit trail for mortgage loan originators. Retaining these records for four years allows the lender to address any potential issues related to the loan application, such as verifying the legitimacy of the decline and understanding patterns in loan processing.

While other timeframes may seem logical, they do not meet the specific regulatory requirement set forth by applicable laws governing record retention in the mortgage industry. This four-year retention period is also crucial in case of any disputes or compliance reviews, ensuring that all necessary documentation is available if needed.