A class action lawsuit filed against Toll Brothers (TOL) in Pennsylvania Tuesday, seeks damages from the builder and its mortgage lending subsidiary for originating mortgages in the state without the proper license. According to court documents, Toll Brothers’ mortgage business TBI Mortgage, formerly Westminster Mortgage, let its mortgage license expire, but advertised that it was still a licensed lender and continued to originate mortgages for borrowers purchasing homes in the builder’s developments in 2005 and 2006, a violation of the state’s Mortgage Bankers and Brokers Consumer Protection Act. In a deal reached with the Pennsylvania Department of Banking Bureau of Compliance, Investigation and Licensing in 2008, Toll Brothers paid a $50,000 fine and agreed to stop originating loans without a license to avoid further prosecution. This agreement is the basis for the lawsuit. The lead plaintiff, Joan McClure, claims she purchased a Toll Brothers home in 2006 with first- and second-lien loans TBI Mortgage originated for $624,975. Since the company was not properly licensed, the suit alleges, she is the victim of a third-degree felony. The suit claims McClure was not informed that Toll Brothers was allegedly engaged in a third-degree felony and was in violation of the state’s Unfair Deceptive Trade Practices Consumer Protection law. The suit seeks to have McClure’s mortgage voided and removed from her title, as well additional punitive damages, known as treble damages, in the amount of three times the value of her mortgage. The suit also seeks damages on behalf of 1,358 Pennsylvania borrowers with mortgages originated by the company during the period that it was unlicensed. McClure’s lawyer said assuming those borrowers have an average mortgage of $400,000, it is seeking more than $543m in voided mortgages. A Toll Brothers spokesperson declined to comment on the pending case, citing company policy. Write to Austin Kilgore.