Announced in a press release, the U.S. Department of Justice (DOJ) and the state of Texas have secured a $68 million settlement against Colony Ridge developers, putting a halt to new residential sales in the community for 36 months. The lawsuit alleged that Colony Ridge used predatory practices that targeted Hispanic borrowers. This resulted in a violation of the Equal Credit Opportunity Act (ECOA) and the Fair Housing Act (FHA) as foreclosures and financial hardship became prominent.
According to the office of the Texas Attorney General (AG), the development north of Houston has become a de facto illegal immigrant community. Texas AG Ken Paxton said that Colony Ridge actions endangered American citizens.
“Under my watch, Texas will never be a sanctuary for illegals,” said Paxton. “Now, it’s time for those responsible to pay a steep cost for their unlawful actions.”
The company allegedly misrepresented key facts, such as the availability of utilities (water, sewer, electricity) and flood risks, while marketing land through Spanish-language ads on platforms like TikTok under names like “Terrenos Houston.”
Developers offered seller-financed loans without verifying borrowers’ ability to repay, requiring minimal down payments and failing to assess income. This led to a foreclosure rate 10 to 50 times higher than the national average, with about one in three loans ending in foreclosure.
Harmeet K. Dhillon, assistant attorney general of the DOJ’s Civil Rights Division, said that DOJ will go after all parties involved in schemes that encourage 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,” said Dhillon.
Ira Mehlman is media director for the Federation for American Immigration Reform.
"Colony Ridge was a development that the unscrupulous developers came up with to try to take advantage of the presence of large numbers of illegal aliens in the country. They were encouraging people to come and settle illegally in this development," informs Mehlman.
He says that they were also exploiting the illegal aliens themselves.
"Predatory lending practices. These are the sorts of things that harm both the people who are directly involved, the illegal aliens, and also the public at large," states Mehlman.
The Texas AG’s office says that the agreement mandates stricter buyer identification and requires "heightened" underwriting standards. The agreement also prohibits sales to individuals from certain designated countries such as China and Iran.
