The federal government filed a lawsuit against Colony Ridge, alleging it’s Houston-area developer falsely represented land sales and targeted Hispanic consumers with predatory loans and false statements, according to the United States Attorney’s Office.
The lawsuit, filed by the Justice Department and Consumer Financial Protection Bureau on Tuesday, alleges the Liberty County residential community sells unsuspecting families flood-prone land without water, sewer or electric infrastructure, and that the company sets borrowers up for failure with unaffordable loans.
“Today’s complaint alleges that Colony Ridge targeted Hispanic consumers with predatory loans, misled borrowers about the water, sewer and electrical infrastructure on its lots, and exploited language barriers by conducting most of its marketing in Spanish while offering important transaction documents only in English,” Attorney General Merrick Garland said in a statement.
The community development came under fire this year after allegations that the development company was creating a safe haven for crime, drug cartels and undocumented immigrants. The development company sells land to some people who aren’t citizens, but the “vast majority” of people who purchase land through Colony Ridge use Texas or U.S. identification forms, developer Trey Harris told Houston Public Media in October. Harris has disputed claims that the development specifically targets undocumented people to purchase land in Colony Ridge, but the recently filed lawsuit alleges otherwise.
“Discrimination in lending harms families and neighborhoods for generations; it is wrong and has no place in our country,” Garland said.
About one in four Colony Ridge loans end in foreclosure, after which the development company repurchases to sell to new owners, the lawsuit alleges.
The lawsuit further alleges Colony Ridge targets Spanish-speaking borrowers by predominantly advertising exclusively in Spanish on social media platforms like TikTok. The development company promises consumers the dream of homeownership with easy-to-obtain loan product that requires no credit check and small deposits, according to the department.
In a statement, U.S. Attorney Alamdar S. Hamdani for the Southern District of Texas said that the “exploitative” loans practices that Colony Ridge alleged committed “often ended with families facing economic ruin, no home, and shattered dreams.”
"Using 21st century social-media applications to target and mislead consumers, Colony Ridge set out to exploit something as old as America — an immigrant's dream of owning a home," Hamdani said.
Lucio Vasquez contributed to this report.
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