Colony Ridge, a Houston-area development, reached a sweeping $68 million settlement with Texas and federal officials that resolves two lawsuits alleging that the developer used seller-financed mortgage and land-sale practices that harmed prospective homeowners. The agreement, announced Tuesday, requires the company to change what documentation it asks for from buyers, adjust its residential plat approvals and loan criteria, and increase spending on infrastructure and law enforcement, according to the terms described by both sides.
The Texas case, brought by Attorney General Ken Paxton, alleged that Colony Ridge’s owners used deceptive sales, marketing and lending practices. Paxton’s lawsuit followed claims that were also described by the federal government, and the allegations drew attention from Texas GOP leaders and conservative media even before the settlement was reached. Under those allegations, Colony Ridge sold land to buyers who could not obtain proper documentation, which prosecutors and investigators said contributed to a pattern of foreclosures and a later turnover of properties to new buyers.
The settlement language described in the report said it addresses state and federal claims that Colony Ridge lured Spanish-speaking homebuyers into seller-financed mortgages with high interest rates that they could not afford. Federal authorities’ estimate described in the report said roughly one in four Colony Ridge loans resulted in foreclosure, after which the company would sell the properties again, leading—according to court filings—to additional buyers becoming homeowners through terms the lawsuits say were misrepresented.
For buyers, the settlement requires Colony Ridge to clamp down on the documentation it requests. The agreement says would-be purchasers will have to present a Texas ID or driver’s license, or a passport or visa; it also states the terms are not limited to passports issued by the United States, according to the description of the agreement. The measure is among the changes designed to reduce the scope of the practices that Texas and federal officials said enabled the alleged harms.
Colony Ridge’s obligations in the settlement also include a halt on seeking approvals for new residential plats for three years, new criteria for approving loans, and relief for customers facing foreclosure, the report said. The agreement also calls for advertising and marketing to be truthful and requires the company to spend $48 million on infrastructure projects such as roads and drainage systems. It additionally sets aside $20 million for law enforcement, including construction of a new police station within the community and money specifically designated for immigration enforcement.
In public remarks, Paxton framed the deal as a response to wrongdoing and reiterated his office’s enforcement posture. In a statement included in the report, Paxton said the settlement had resulted in Colony Ridge’s owners paying “a steep cost for their unlawful actions,” and he added, “My office will continue to bring the full force of the law against anyone who threatens the safety of our state or creates a safe harbor for illegals.”
The Justice Department’s civil rights division also weighed in through Harmeet K. Dhillon, who celebrated the settlement as a victory and said the case addressed discrimination. Dhillon said in a statement that “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,” and she said, “This DOJ will go after all lenders, financiers, and land developers who participate in schemes which ultimately encourage illegal immigration.”
The settlement drew reactions from both immigration-focused advocates and people who had previously raised complaints with state agencies. Michael Quinn Sullivan, publisher of the right-wing Texas Scorecard, said the settlement “functionally means Colony Ridge is no longer a safe haven for illegal aliens,” describing it as a “huge win on a major issue” for Paxton and Dhillon. SuEllen Sanchez, who together with her sister filed complaints with state agencies about Colony Ridge years earlier, said in a social media post that “They won’t be able to scam more immigrants,” and added, “My heart is with them right now.”
The report said Colony Ridge’s spokespeople did not immediately respond to requests for comment.