Would I be able to agree to a shorter retention schedule on
these because they are copies? I could not find any specific guidance on service released loans. I think at my last bank we did not make copies of the files.

Each regulation, Reg. Z, Reg. B, RESPA, CIP, etc. have mandatory retention periods for loans you originate and/or applications you process. You cannot agree to shorter retention periods in contradiction of these regulatory requirements.

That was my fear, but I kept wondering if anything changed because the documents are just copies.

Daisy - with the enactment of the mortgage servicing rules in Jan 2014, there is actually more burden on the lender to ensure records are retained; and in the event of the transfer of servicing, the lender must also have procedures in place to ensure compliance with a myriad of requirements.

So if you have released loans since Jan 2014, I would suggest you review your procedures in light of those requirements. There have also been enforcement actions relative to these requirements.

Thanks, everyone. We will keep to our normal retention schedule Life + 6 for the entire file. I hope we can use the service release date as the 'life' date? We will not know when the loan pays off.

Once you sell the loan servicing released then as far as you are concerned the loan is paid off. It's no longer on your books.

Makes perfect sense. Thanks!

This is where electronic retention comes in so very handy. Once we scan if we shred it. For servicing released loans, we send the original note, recorded mortgage and assignment and final title to the investor. Everything is in the scan file so we can produce a copy if the investor comes back to us saying they didn't get something be it two months or two years from now.