Houston Developer Secures $68M Settlement with Texas and Federal Authorities

The owners of Colony Ridge, a Houston-area developer, have reached a significant legal settlement in response to allegations of running a predatory lending scheme that targeted Latino communities. This settlement mandates the developers to invest in law enforcement and infrastructure on their properties while tightening their selling practices to address various accusations from Texas GOP leaders and conservative media.

Central to the allegations is the claim that Colony Ridge developers sold land to undocumented individuals, leading to a crime-ridden complex of subdivisions approximately 30 miles outside Houston, purportedly controlled by Mexican drug cartels. Despite these serious accusations, the developers have denied that their communities are unsafe. This assertion was supported by local officials during special hearings held by the Legislature in 2023, which were prompted by public outrage and reports from residents living in these developments.

In response to these concerns, Texas Attorney General Ken Paxton filed a lawsuit against the developers, accusing them of deceptive sales, marketing, and lending practices. This lawsuit echoed claims made by the federal government in a separate case. The settlement, announced on Tuesday, requires Colony Ridge’s owners to implement stricter documentation requirements for buyers. Prospective purchasers must now present a Texas ID or driver’s license—documents that undocumented immigrants cannot obtain in Texas—or a passport or visa, with no specification that the passport must be American.

This agreement resolves both state and federal lawsuits, which alleged that Colony Ridge lured Spanish-speaking homebuyers into seller-financed mortgages with exorbitant interest rates that many could not afford. According to federal estimates, about one in four Colony Ridge loans resulted in foreclosure. The company allegedly flipped these properties to new, unsuspecting customers eager to achieve homeownership.

The federal case, initiated by the Biden administration’s Justice Department in late 2023, also accused Colony Ridge of misrepresenting critical facts, such as guarantees of water, electricity, and sewer connections, as well as whether properties had previously experienced flooding.

The settlement aims to address these serious allegations. Colony Ridge has agreed to:

• Pause seeking approvals for any new residential plats for three years.
• Establish new criteria for approving loans and provide relief to customers facing foreclosure.
• Ensure that its advertising and marketing practices are truthful.
• Invest $48 million in infrastructure projects, including roads and drainage systems.
• Offer discounts to peace officers to encourage them to reside in the development.
• Allocate $20 million for law enforcement, which includes constructing a new police station within the community and funding for immigration enforcement.

Colony Ridge’s CEO, John Harris, expressed satisfaction with the agreement, stating, “The settlement allows us to continue investing in our neighborhoods and supporting the thousands of families who have trusted us to provide a place for them to call home.” He emphasized that funds from the settlement would be directed back into the community for the benefit of residents.

Attorney General Paxton remarked that the settlement imposed a “steep cost for their unlawful actions,” affirming his commitment to using the full force of the law against those who threaten the safety of Texas or provide a safe harbor for undocumented individuals.

Harmeet K. Dhillon, overseeing the Justice Department’s civil rights division, hailed the settlement as a victory against discrimination and the promotion of illegal immigration. “Intentionally targeting vulnerable borrowers with the American dream of homeownership and then trapping them in a predatory scheme is not only wrong, it also violates our civil rights laws,” she stated.

The agreement has garnered approval from both immigration hardliners and advocates for residents, who have raised alarms about the development for years. Lt. Gov. Dan Patrick thanked Paxton in a social media post, claiming credit for being the first elected official to conduct an in-depth tour of Colony Ridge with law enforcement.

Michael Quinn Sullivan, publisher of the right-wing Texas Scorecard, described the settlement as a “huge win” for Paxton and Dhillon, asserting that it effectively ends Colony Ridge’s status as a safe haven for undocumented immigrants. SuEllen Sanchez, who had previously filed complaints against Colony Ridge, expressed optimism, stating, “They won’t be able to scam more immigrants. My heart is with them right now.”

This article first appeared on The Texas Tribune.

Topics
Texas

The owners of Colony Ridge, a Houston-area developer, have reached a significant legal settlement in response to allegations of running a predatory lending scheme that targeted Latino communities. This settlement mandates the developers to invest in law enforcement and infrastructure on their properties while tightening their selling practices to address various accusations from Texas GOP leaders and conservative media.

Central to the allegations is the claim that Colony Ridge developers sold land to undocumented individuals, leading to a crime-ridden complex of subdivisions approximately 30 miles outside Houston, purportedly controlled by Mexican drug cartels. Despite these serious accusations, the developers have denied that their communities are unsafe. This assertion was supported by local officials during special hearings held by the Legislature in 2023, which were prompted by public outrage and reports from residents living in these developments.

In response to these concerns, Texas Attorney General Ken Paxton filed a lawsuit against the developers, accusing them of deceptive sales, marketing, and lending practices. This lawsuit echoed claims made by the federal government in a separate case. The settlement, announced on Tuesday, requires Colony Ridge’s owners to implement stricter documentation requirements for buyers. Prospective purchasers must now present a Texas ID or driver’s license—documents that undocumented immigrants cannot obtain in Texas—or a passport or visa, with no specification that the passport must be American.

This agreement resolves both state and federal lawsuits, which alleged that Colony Ridge lured Spanish-speaking homebuyers into seller-financed mortgages with exorbitant interest rates that many could not afford. According to federal estimates, about one in four Colony Ridge loans resulted in foreclosure. The company allegedly flipped these properties to new, unsuspecting customers eager to achieve homeownership.

The federal case, initiated by the Biden administration’s Justice Department in late 2023, also accused Colony Ridge of misrepresenting critical facts, such as guarantees of water, electricity, and sewer connections, as well as whether properties had previously experienced flooding.

The settlement aims to address these serious allegations. Colony Ridge has agreed to:

• Pause seeking approvals for any new residential plats for three years.
• Establish new criteria for approving loans and provide relief to customers facing foreclosure.
• Ensure that its advertising and marketing practices are truthful.
• Invest $48 million in infrastructure projects, including roads and drainage systems.
• Offer discounts to peace officers to encourage them to reside in the development.
• Allocate $20 million for law enforcement, which includes constructing a new police station within the community and funding for immigration enforcement.

Colony Ridge’s CEO, John Harris, expressed satisfaction with the agreement, stating, “The settlement allows us to continue investing in our neighborhoods and supporting the thousands of families who have trusted us to provide a place for them to call home.” He emphasized that funds from the settlement would be directed back into the community for the benefit of residents.

Attorney General Paxton remarked that the settlement imposed a “steep cost for their unlawful actions,” affirming his commitment to using the full force of the law against those who threaten the safety of Texas or provide a safe harbor for undocumented individuals.

Harmeet K. Dhillon, overseeing the Justice Department’s civil rights division, hailed the settlement as a victory against discrimination and the promotion of illegal immigration. “Intentionally targeting vulnerable borrowers with the American dream of homeownership and then trapping them in a predatory scheme is not only wrong, it also violates our civil rights laws,” she stated.

The agreement has garnered approval from both immigration hardliners and advocates for residents, who have raised alarms about the development for years. Lt. Gov. Dan Patrick thanked Paxton in a social media post, claiming credit for being the first elected official to conduct an in-depth tour of Colony Ridge with law enforcement.

Michael Quinn Sullivan, publisher of the right-wing Texas Scorecard, described the settlement as a “huge win” for Paxton and Dhillon, asserting that it effectively ends Colony Ridge’s status as a safe haven for undocumented immigrants. SuEllen Sanchez, who had previously filed complaints against Colony Ridge, expressed optimism, stating, “They won’t be able to scam more immigrants. My heart is with them right now.”

This article first appeared on The Texas Tribune.

Topics
Texas