How long must a servicer retain records documenting its actions related to a consumer's mortgage loan?

The requirement for servicers to retain records documenting their actions related to a consumer's mortgage loan is guided by regulations that aim to ensure accountability and transparency in the servicing process. According to the applicable regulations, servicers must maintain these records for a minimum of 12 months after the mortgage loan has been discharged.

This retention period is important because it allows for sufficient time for any potential disputes to be resolved and for consumers to access information about their mortgage loan history and the servicer's actions. Retaining records for this duration helps protect consumers' rights and ensures that servicers can provide necessary documentation in case of inquiries or issues that may arise after the loan has been discharged.

In contrast, other options suggest shorter or longer retention periods, which do not align with the established regulatory requirements. This reinforces the significance of the 12-month period as being adequate for both compliance and consumer protection needs.