HOUSTON — A legal resolution has been reached between federal agencies and the Colony Ridge development company regarding allegations of predatory lending targeting Latino homebuyers. According to court documents, the parties have agreed to settle the lawsuit that accused the developer of misleading practices in seller-financed mortgage arrangements.
Settlement Details Pending
In a recent court update, attorneys representing the U.S. Consumer Financial Protection Bureau and Department of Justice indicated they had "reached an agreement in principle resolving all claims" but required additional time to finalize the settlement terms. Specific details of the agreement remain undisclosed, and representatives from both the Justice Department and Colony Ridge have not provided immediate comments.
A separate legal action filed by state authorities, containing similar allegations of predatory lending practices, continues to proceed independently.
Background of Controversy
Two years ago, Colony Ridge faced significant scrutiny from Republican lawmakers, media figures, and political influencers. The controversy centered on the company's practice of selling land to undocumented individuals, with critics alleging the Liberty County area had become a problematic zone for illegal immigration during the current administration.
This public outcry led to legislative hearings that ultimately disproved some of the more extreme claims. The state legislature subsequently allocated funding for the Texas Department of Public Safety to increase patrols in the region.
Federal Allegations
While state authorities focused on immigration concerns, federal investigators pursued a different angle. Their lawsuit detailed how Colony Ridge allegedly used Spanish-language advertising, video promotions, and aggressive marketing strategies to attract Latino homebuyers into high-interest, seller-financed mortgages that many borrowers ultimately defaulted on.
The federal complaint also accused the developer of misrepresenting critical information about utility connections, including water, electricity, and sewer services.
Pattern of Foreclosure
According to federal officials, when buyers fell behind on payments, the company would reclaim the property and restart the sales process—sometimes repeating this cycle multiple times with the same land parcel. Approximately 25% of Colony Ridge loans resulted in foreclosure proceedings.
"Colony Ridge set out to exploit something as old as America: An immigrant's dream of owning a home," stated Alamdar S. Hamdani, the former U.S. Attorney for the Houston district, when the lawsuit was initially filed. Hamdani has since left government service.
Ongoing Political Implications
The development remains politically contentious. Earlier this year, Governor Greg Abbott announced that U.S. Immigration and Customs Enforcement officers were conducting targeted operations at Colony Ridge properties. The subdivisions have also emerged as a discussion point among Republican candidates competing in a newly established congressional district that includes these communities.
Government attorneys have requested until December 31 to submit their finalized settlement update to the presiding judge.
