Dispute erupted after banking giant fired mortgage development officer just before shutting down US residential lending division
Santander Bank fired one of its top-producing mortgage officers just before shutting down its residential lending division—and a federal court says the timing was enough to avoid paying severance.
Lorna Orabona, a mortgage development officer who earned $680,000 in 2021 on commissions alone, was terminated on January 21, 2022. The bank cited policy violations for the dismissal, pointing to her forwarding company emails to a personal account. But less than two weeks later, Santander announced a full-scale exit from the US residential mortgage market—eliminating the very department Orabona worked in.
Orabona argued the firing was a strategic move to cut her loose before a mass layoff, allowing the bank to avoid what could’ve been a significant severance payout. She took legal action in 2023, bypassing Santander’s internal appeals process and filing a state lawsuit instead. But on June 16, 2025, the First Circuit Court of Appeals sided with Santander, saying her claim couldn’t proceed because she didn’t follow the steps required under the bank’s federally governed severance policy.
The ruling highlights how large lenders can insulate themselves from legal exposure when layoffs intersect with performance or conduct issues—especially in commission-heavy roles.
While Orabona said she avoided filing for severance because she was warned the bank might report her to licensing regulators if she did, the court made clear that following the process outlined in Santander’s ERISA-backed policy was mandatory. Skipping that meant she gave up the ability to challenge the decision in court.
For mortgage firms managing large sales teams—particularly during restructurings or exits—this case offers a clear takeaway: documentation, timing, and adherence to established benefits policy can significantly limit payout risk. For top producers, it also reinforces that severance protections tied to federal plans come with strict procedural requirements.
As the industry continues to navigate consolidation, compliance pressure, and staffing realignments, both lenders and high-performing officers should be clear on how exit scenarios are managed—and what’s contractually and legally in play when big compensation is involved.
