Government Lawsuit Accuses Colony Ridge of Exploiting Hispanic Borrowers
Today, both the Justice Department and Consumer Financial Protection Bureau (CFPB) jointly filed a lawsuit against Colony Ridge, a Texas-based developer and lender, for running an unlawful land sales operation that targeted tens of thousands of Hispanic borrowers.
Alleged Misleading Sales Tactics
The lawsuit, lodged in a federal district court, alleges that Colony Ridge engaged in selling flood-prone land to unsuspecting families without essential infrastructure like water, sewer, or electrical services.
Moreover, the company purportedly provided false statements and offered predatory loans, setting borrowers up for financial failure.
High Foreclosure Rates and Repeated Sales
Statistics suggest that approximately one out of every four loans extended by Colony Ridge ends in foreclosure. Following foreclosures, the company repurchases these properties and resells them to new borrowers.
Legal Action Objectives
The Justice Department and CFPB aim to seek restitution for affected borrowers and an immediate cessation of Colony Ridge’s illegal practices.
Related Developments
This lawsuit emerges alongside efforts by Assistant Attorney General Kristen Clarke, who delivered remarks unveiling the legal action against the Texas-based developer and lender Colony Ridge.
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