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Managing Risk and Uncertainty in the Mortgage Loan Process: A Case Study of Private Advisors’ Decision-Making Behavior in a Swedish Bank
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Business Studies.
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Business Studies.
2015 (English)Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

Monitoring credit risks in an effective way is crucial, and Swedish banks can to a great extentuse their own models and terms in the evaluation process of an individual’s creditworthiness.There is however a lack of transparency in decision-making process of mortgage loans.Besides the quantifiable factors, uncertainties such as future and external events need to beconsidered. Due to the difficulty of quantifying the uncertainty aspects, hiring risk-averseindividuals becomes important. The aim of this paper is to investigate the risk and uncertaintyaspect around the mortgage loan process in a Swedish bank, more specifically the privateadvisors’ decision-making involving their own subjective judgments in combination with theobjectivity of the mechanical evaluation systems. By using previous literature on the field ofrisk and decision-making, in combination with qualitative interviews from a case study ofeight private advisors, this paper aims to map out the mechanisms that drive decision-makingunder risk and uncertainty. From the empirical findings it was evident that heuristics andintuition played important parts in the advisors’ decision-making process, and that the relianceon technology varied between the advisors. The evaluation depended on the individualadvisor’s judgment, the applicant, and the situation.

Place, publisher, year, edition, pages
2015. , 58 p.
Keyword [en]
Risk, Risk Management, Credit Risk, Credit Default Risk, Operational Risk, Exogenous Risk, Decision-Making, Uncertainty, Heuristics, Intuition, Mortgage Loan, Subjectivity, Objectivity, Banking System
National Category
Business Administration
URN: urn:nbn:se:uu:diva-256284OAI: diva2:824934
Educational program
Master Programme in Business and Management
Available from: 2015-06-23 Created: 2015-06-22 Last updated: 2015-06-23Bibliographically approved

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