Final answer:
The TILA-RESPA rule mandates that mortgage lenders retain the Loan Estimate and Closing Disclosure forms for three years and other loan documentation for five years post-closing. Retention may be extended if legal action is involved.
Step-by-step explanation:
The TILA-RESPA Integrated Disclosure rule (often abbreviated as TRID) specifies the record retention requirements for mortgage lenders. Under the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA), lenders are required to retain certain documents for a specific period. For the Loan Estimate and Closing Disclosure forms, which are central to the TRID requirements, lenders must retain them for three years after settlement. Other documentation related to the loan must be kept for five years post-closing. If a lender is involved in legal action, they must retain related records until the action is complete. Compliance with these requirements is critical as it ensures lenders provide transparency in the mortgage process and allows for regulatory review.