We went around and around on this. For a while, we withdrew loans that were approved but never converted. However, we were criticized by the OTS since a loan cant be considered withdrawn unless the customer expressly requests it (usually in writing). We ended up creating an "Approved not Accepted" field.
As for a time frame, we go with 90 days. After that time, the documentation is usually outdated anyway.
Best QB Ever. Worst Defense Ever.