What is the maximum retention period for a Loan Estimate by law?

The correct retention period for a Loan Estimate is three years, as stipulated by federal regulations. This requirement is part of the TILA-RESPA Integrated Disclosure (TRID) rule, which was designed to enhance transparency and borrower protections in the mortgage process.

Storing the Loan Estimate for at least three years allows consumers to refer back to the terms and costs they were initially quoted, which is vital if there are any disputes or questions about the transaction later on. Keeping this documentation accessible ensures that both lenders and borrowers can maintain clarity regarding the assumptions made at the outset of the loan process.

While there may be varying guidelines for other types of documents or records, the three-year period is specifically mandated for Loan Estimates to enhance consumer protection and ensure compliance with federal regulations. This timeframe aligns with the general practice in the lending industry for storing important disclosures related to the loan transaction.