What is the record retention period for loan originator compensation records?

The appropriate record retention period for loan originator compensation records is three years. This duration is established under the regulations that govern loan origination practices, ensuring that there is sufficient time for audits and compliance checks. Maintaining these records for a minimum of three years allows regulatory agencies to verify that compensation structures are compliant with applicable laws and regulations, such as the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA). This retention period also protects both the lender and the loan originator from potential disputes or claims that may arise regarding compensation practices during this timeframe.