Under Mortgage Conduct of Business rules, how long must records of dealings with a borrower in arrears be retained?

• A. Three years from the date of the dealings with the borrower.
• B. One year from the date of the dealings with the borrower.
• C. Five years from the date of the dealings with the borrower.
• D. Indefinitely.

Answer: (A)

When a borrower falls into arrears, there must be a clear, traceable record of every contact and action taken by the lender. This helps demonstrate how the borrower was treated, what forbearance or repayment steps were offered, and how decisions were reviewed if questions or complaints arise later. The specified retention period is three years from the date of the dealings with the borrower. This window provides enough time for any potential queries to surface and for regulatory or internal reviews, without requiring ongoing, indefinite keeping of files. Shorter periods (one year) wouldn’t cover the typical window for reviewing arrears handling, while longer periods (five years or indefinitely) go beyond the stated requirement in MCOB for these particular dealings.