Question

Elliot works in the lending team at NAB. A client has come into the bank and is threatening to take Elliot to court if he doesn't approve his home loan before the end of the client's settlement period. What is the chief threat to Elliot acting professionally in this matter?

Answer 1

Elliot faces the chief threat of pressure from a client threatening legal action for swift loan approval. To act professionally, Elliot must adhere to a regulated lending process that requires objective assessment, including credit checks and consideration of cosigners or collateral.

Step-by-step explanation:

The chief threat to Elliot acting professionally in this matter is the pressure being exerted by the client who is threatening legal action if their home loan isn't approved before the settlement period ends. Professional conduct requires that loans be approved based on objective criteria and thorough due diligence, which includes assessing creditworthiness, sources of income, credit history, the presence of a cosigner, and potential collateral. Succumbing to threats can undermine the integrity of the lending process and may lead to negligent or unethical decisions.

Strategies for Providing Assurance to the Bank

1. Completing all required forms regarding income and finances.
2. Undergoing a comprehensive credit check to demonstrate a reliable borrowing history.
3. Offering a cosigner who legally agrees to fulfill loan obligations if the borrower fails to do so.
4. Providing collateral that the bank could seize and sell in case of loan default.