What is the retention period for the Closing Disclosure?

The correct answer regarding the retention period for the Closing Disclosure is five years. This timeframe is mandated by the regulations set forth by the Consumer Financial Protection Bureau (CFPB). The Closing Disclosure provides important information to borrowers about the final terms of their mortgage loan and all closing costs involved. Retaining this document for five years is crucial for ensuring compliance with federal regulations, as it allows for potential audits and verification of the loan's final terms and conditions if needed.

Additionally, retaining the Closing Disclosure helps in protecting both the borrower and the lender in case of disputes or inquiries that may arise long after the loan has closed. This retention period is part of a broader effort to ensure transparency and accountability within the mortgage lending process, thereby safeguarding consumer rights.