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

This scenario falls under operational risk because it involves the internal processes and systems of the organization, specifically the actions of a dishonest employee. The false documentation provided by the loan officer resulted in a lower interest rate, which ultimately affects the profitability of the loan pool and could potentially harm the reputation of the organization.

A Mortgage Loan Officer Is Found to Have Provided False