You have a co-worker at work that you are also friends with. One day, a borrower comes in and meets with him. You overhear the borrower tell your co-worker that he has a loan with his mom and dad for about $10,000 that he pays $300 a month. Your co-worker proceeds as if he didn’t hear your borrower at all. Once he has taken the application, he tells the borrower that he qualifies for maximum financing for a $250,000 home. However, that does NOT take into consideration the $300 a month the borrower pays his parents for the loan. Did your coworker do anything unethical in this transaction?
Assuming you feel this was an unethical situation, how do you handle this? Remember, this is your friend and co-worker

1. My co-worker has indeed done something unethical as it goes against the ethics of the financial profession. By ignoring the outstanding loan that the applicant has with his parents in his risk assessment of the applicant, he has opened the company to more risk exposure that could be costly to the company. My co-worker has therefore been derelict in his duty for whatever reason and engaged in unethical conduct.

2. As this is my co-worker and friend, I would not think to get him in trouble as a first resort by reporting to our immediate manager. Rather I will go an discuss with him to make him see the error in what he just did because it might have been a mistake.

I will advise him to call the applicant back and reduce the available financing. On the off chance he refuses, I would be forced to report him to our supervisor/ manager.

answer; i believe that the correct answer is (supply chain);