HOUSTON — Federal authorities and the Houston-area developer Colony Ridge have agreed to settle a lawsuit in which the government accused the company of duping Latino homebuyers into seller-financed mortgages that many defaulted on in a scheme that decimated dreams of home ownership while the developers raked in money, according to a court filing.
In an update requested by the judge overseeing the case, lawyers for the U.S. Consumer Financial Protection Bureau and Department of Justice wrote they had “reached an agreement in principle resolving all claims” but needed more time to finalize the settlement.
The details of the agreement were not clear. Spokespeople for the Justice Department and Colony Ridge’s owners did not immediately respond to requests for comment.
A separate lawsuit filed by the state, with similar accusations of predatory lending, remains ongoing.
Two years ago, Colony Ridge came under intense scrutiny from GOP lawmakers, influencers and media because the developers sold land to undocumented people, with many claiming that the area — about 30 miles outside of Houston in Liberty County — had become a crime-infested hot spot for migrants entering the country illegally during the Biden administration.
The months of outrage resulted in legislative hearings that debunked some of the claims. Ultimately lawmakers earmarked money for the Texas Department of Public Safety to patrol the area.
While the state focused on the residents, the federal government around the same time unveiled a bombshell suit that outlined how the developers used Spanish ads and videos and aggressive marketing tactics to lure Latino homebuyers into high-interest seller-financed mortgages many failed to pay successfully. The developer was also accused of misrepresenting key facts about water, electricity and sewer hook-ups.
Once a buyer fell behind on payments, the company bought the land and repeated the process — sometimes multiple times with the same piece of property. Roughly one in four Colony Ridge loans ended in foreclosure, according to federal officials.
“Colony Ridge set out to exploit something as old as America: An immigrant’s dream of owning a home,” Alamdar S. Hamdani, the U.S. Attorney for the district that covers Houston, said at the time. Hamdani no longer works for the government.
Attorney General Ken Paxton, one of the earliest and loudest critics of the subdivisions, later sued Colony Ridge for deceptive trade practices surrounding similar allegations. An investigation by The Texas Tribune and Houston Landing found that Paxton’s office, among others, had received complaints from residents for years about the developer — but the state had little to show for it.
Government lawyers asked the judge in their latest filing to submit an update to the court by Dec. 31.
The subdivisions remain a political lightning rod. Earlier this year, Gov. Greg Abbott said that U.S. Immigration and Customs Enforcement officers were conducting targeted raids at Colony Ridge. It has also been a topic of debate among GOP candidates for a newly drawn congressional district that includes the collection of subdivisions.
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