The owners of Colony Ridge, a Houston-area developer accused of running a predatory lending scheme that deceived Latinos, agreed to a sweeping legal settlement that will require them to invest in law enforcement and infrastructure on their properties and tighten selling practices to address a range of accusations from Texas GOP leaders and conservative media. <\/p>\n
Chief among the allegations<\/a> was that Colony Ridge developers sold land to undocumented people, giving rise to a crime-ridden complex of subdivisions about 30 miles outside Houston allegedly being run by Mexican drug cartels. <\/p>\n The developers denied<\/a> that their communities were unsafe, a contention backed by testimony from local officials when the Legislature held special hearings in 2023<\/a> in response to outrage and accounts from residents in the developments. Texas Attorney General Ken Paxton<\/a> sued the developers<\/a> soon after, accusing them of deceptive sales, marketing and lending practices in a suit that echoed claims lodged by the federal government<\/a> in a separate case.<\/p>\n Under the settlement released Tuesday<\/a>, Colony Ridge\u2019s owners agreed to clamp down on the documentation it requires from buyers. Would-be purchasers will now have to present a Texas ID or driver\u2019s license \u2014 which undocumented immigrants cannot obtain in Texas \u2014 or a passport or visa. The agreement did not specify that the passport has to be an American one.<\/p>\n The agreement resolves the state and federal lawsuits, which alleged<\/a> the owners of Colony Ridge lured would-be Spanish-speaking homebuyers into seller-financed mortgages with high interests that they could not afford. By federal authorities\u2019 estimate, roughly one in four Colony Ridge loans resulted in foreclosure. The company would then flip those properties to new unsuspecting customers eager to become homeowners, court filings allege. <\/p>\n The federal case, filed by the Biden administration\u2019s Justice Department in late 2023, also accused Colony Ridge of misrepresenting facts such as guarantees of water, electricity and sewer hook-ups and whether properties had previously flooded.<\/p>\n The settlement seeks to address those accusations. Colony Ridge agreed to: <\/p>\n Pause seeking approvals for any new residential plats for three years.<\/p>\n Establish new criteria for approving loans and offer relief to customers facing foreclosure.<\/p>\n Ensure that its advertising and marketing is truthful.<\/p>\n Spend $48 million on infrastructure projects like roads and drainage systems.<\/p>\n Offer discounts to peace officers in an effort to encourage them to live in the development.<\/p>\n Earmark $20 million for law enforcement, including the construction of a new police station within the community and money specifically for immigration enforcement.<\/p>\n Colony Ridge\u2019s Chief Executive Officer John Harris said he was happy to reach an agreement and move on. <\/p>\n \u201cThe settlement allows us to continue investing in our neighborhoods and supporting the thousands of families who have trusted us to provide a place for them to call home,\u201d Harris said in a statement. \u201cWe\u2019re glad that funds from this agreement will be directed back into the community to benefit residents.\u201d<\/p>\n In a statement, Paxton said the settlement had resulted in Colony Ridge\u2019s owners paying \u201ca steep cost for their unlawful actions.\u201d<\/p>\n \u201cMy 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,\u201d Paxton said.<\/p>\n Harmeet K. Dhillon, who oversees the Justice Department\u2019s civil rights division, in a statement celebrated<\/a> the settlement as a victory against discrimination \u2014 and the promotion of illegal immigration. <\/p>\n \u201cIntentionally 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,\u201d Dhillon said. \u201cThis DOJ will go after all lenders, financiers, and land developers who participate in schemes which ultimately encourage illegal immigration.\u201d <\/p>\n The agreement appeared to please both immigration hardliners and those who had advocated on behalf of residents for years, raising alarms about the development even before it became a conservative lightning rod. <\/p>\n Lt. Gov. Dan Patrick<\/a> thanked Paxton in a social media post<\/a> and claimed credit for being \u201cthe first elected official to conduct an in-depth tour<\/a> of Colony Ridge with law enforcement.\u201d<\/p>\n \u201cWhat I saw was astounding. A community of what looked to be an illegal immigrant city, about 35 miles outside of Houston,\u201d Patrick said, adding, \u201cWe cannot let these cities spring up across Texas.\u201d<\/p>\n Michael Quinn Sullivan, publisher of the right-wing Texas Scorecard, which helped draw conservatives\u2019 attention, said that the settlement \u201cfunctionally means Colony Ridge is no longer a safe haven for illegal aliens.\u201d He called it a \u201chuge win on a major issue\u201d for Paxton \u2014 currently in a heated GOP primary for U.S. Senate \u2014 and Dhillon. <\/p>\n