How long must lenders or servicers retain the HUD-1 statements after settlement?

Lenders or servicers are required to retain HUD-1 statements for a period of five years after the settlement date. This retention period is established by the Real Estate Settlement Procedures Act (RESPA), which mandates that records related to the closing of a loan, including the HUD-1 statement, be kept to ensure accountability and transparency in the mortgage process. Retaining these documents for five years allows for the possibility of audits, disputes, or inquiries related to the transaction to be addressed properly, ensuring that both lenders and borrowers can reference the details of the settlement if needed.