For how many years must RESPA records be retained?

The correct retention period for RESPA (Real Estate Settlement Procedures Act) records is five years. This requirement ensures that necessary documentation related to real estate transactions is kept for a sufficient time frame should there be any inquiries, audits, or investigations that require reviewing the details of the settlement process. RESPA's aim is to protect consumers by providing transparency in the real estate transaction and ensuring that all parties adhere to the rules regarding the handling of closing costs and related disclosures.

Maintaining records for only three years would be insufficient as it would not account for the full range of potential disputes or regulatory reviews that might occur within a longer time frame. Similarly, retention periods of seven or ten years are longer than what is mandated by RESPA, which could lead to unnecessary storage of data and increased administrative burdens for businesses and professionals involved in real estate transactions.