The Justice Department announced today that Colony Ridge Land LLC and its affiliates, a land development and lending company near Houston, Texas, have agreed to pay $68 million to resolve claims that the company engaged in predatory practices targeting Hispanic borrowers.
The settlement resolves lawsuits alleging the developer trapped residents in cycles of financial hardship and foreclosures, violating both the Equal Credit Opportunity Act (ECOA) and the Fair Housing Act (FHA).
Targeting Vulnerable Borrowers
According to the Justice Department, Colony Ridge deliberately focused on Hispanic communities, luring potential homeowners with misleading advertisements and sales pitches.
The investigation found the company misrepresented property conditions, including flooding risks, and offered seller-financed loans without properly assessing whether borrowers could afford them.
These loans carried high default risk, which in turn fueled elevated foreclosure rates.
Assistant Attorney General Harmeet K. Dhillon, who oversees the Civil Rights Division, said:
“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.
This DOJ will go after all lenders, financiers, and land developers who participate in schemes which ultimately encourage illegal immigration.”
Dhillon also highlighted that the settlement’s measures aim to promote public safety and sustainable, affordable homeownership, which she described as top priorities for the current administration.
Coordinated Legal Action
The settlement resolves lawsuits filed over the last two years: a December 2023 suit by the Justice Department’s Civil Rights Division and the Consumer Financial Protection Bureau, and a March 2024 suit by the Texas Attorney General’s office.
The combined effort underscores a broader federal-state commitment to tackling discriminatory and deceptive lending practices.
Settlement Requirements
As part of the $68 million agreement, Colony Ridge has agreed to a sweeping set of reforms and investments, including:
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$48 million in infrastructure improvements, with $18 million dedicated to drainage and flood mitigation, and $30 million for general infrastructure upgrades.
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Tighter lending standards to ensure borrowers’ ability to repay Colony Ridge lot loans is carefully reviewed.
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Foreclosure prevention policies aimed at reducing the frequency of foreclosures and deeds in lieu of foreclosure.
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Default avoidance plans to help borrowers stay on track with payments and reduce overall default rates.
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Credit harm remediation for borrowers negatively impacted by prior Colony Ridge loan defaults.
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Accurate advertising and disclosures to prevent misrepresentation of property conditions or available city services.
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Enhanced law enforcement presence with $20 million invested to improve safety in Colony Ridge developments.
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Verification of purchasers through valid Texas-issued IDs or passports/visas, aligning with intrastate land sales regulations.
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Three-year pause on new residential plats for direct-to-consumer sales.
Broader Context
Colony Ridge has been criticized for creating conditions where vulnerable populations are offered loans they cannot realistically repay, effectively profiting from financial instability.
Predatory land schemes like this have been a growing concern in Texas and other states, where large, fast-growing developments are marketed aggressively to low-income communities, often with little regulatory oversight.
Experts note that this settlement is unusual in its scope of remedial actions, particularly the combination of financial restitution, infrastructure improvements, and mandated operational reforms.
It signals the federal government’s commitment to preventing discriminatory lending practices while holding developers accountable for public safety and financial fairness.
What’s Next
The settlement is now in effect, and Colony Ridge must implement all required changes.
Regulators will monitor compliance over the coming years, particularly in infrastructure investments, lending practices, and advertising reforms.
Legal authorities have also warned that any further violations could trigger additional fines, penalties, or civil actions.
For the public, this case serves as a reminder to carefully review land and housing purchases, especially when offered financing directly by developers.
Anyone with information about similar predatory practices can contact the Civil Rights Division at www.justice.gov/crt.
Summary
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Colony Ridge Land LLC and affiliates will pay $68 million to resolve allegations of predatory lending targeting Hispanic borrowers.
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Investigations revealed deceptive marketing, misrepresented property conditions, and unverified seller-financed loans.
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Settlement includes $48 million for infrastructure, $20 million for safety and law enforcement, lending reforms, foreclosure prevention, and advertising accountability.
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Lawsuits were filed by the DOJ, CFPB, and Texas Attorney General between 2023 and 2024.
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The settlement aims to protect borrowers, increase housing affordability, and improve public safety in Colony Ridge developments.
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Regulatory oversight and compliance monitoring will continue, with additional penalties possible for noncompliance.
