The Pennsylvania Department of Banking announced this week that it has rescinded the mortgage licenses of NorthStar Mortgage LLC because of alleged fraud committed by the company’s employees. Pennsylvania’s Secretary of Banking Steve Kaplan said the action against NorthStar Mortgage, which has central offices in Northampton and Chester counties, means the mortgage broker can no longer do business in Pennsylvania.

According to the state officials, NorthStar employees altered, fabricated and falsified documents to make it appear as though applicants had greater down payments or income than they actually had. As a result, the applicants were approved for loans, in many cases, for which they did not qualify and could not afford. Many of the homes purchased through loans brokered by NorthStar ultimately went into foreclosure.
“Records indicate that NorthStar Mortgage repeatedly turned a blind eye to the misconduct of its employees, one of whom was convicted of forging loan documents while working there,” Kaplan said. “NorthStar allowed this individual to continue working, even after the Banking Department brought additional problems to its attention.”
NorthStar Mortgage was licensed by the state of Pennsylvania in 1997. The company’s licenses expired on July 1, 2008, and according to state regulators, will not be renewed.
The Pennsylvania Banking Department’s final order regarding NorthStar LLC is available online at Banking.state.pa.us.