A mortgage loan officer is found to have provided false documentation that resulted in a lower interest rate on a loan approved for one of her friends. The loan was subsequently added to a loan pool, securitised and sold. Which of the following risks applies to the false documentation by the employee?

Question

Quizplus · Accepted Answer

The risk in this situation is operational risk, which refers to the risk of loss resulting from inadequate or failed internal processes, people, and systems or from external events. The employee provided false documentation, which is a failure in internal processes and people, leading to potential financial loss for the institution. This risk is not related to market, credit, or technological risks.

A Mortgage Loan Officer Is Found to Have Provided False