In a groundbreaking move, federal prosecutors and the leading U.S. consumer financial protection agency are taking legal action against a Texas real estate developer accused of orchestrating a deceitful land sale scheme, with a particular focus on exploiting thousands of Hispanic borrowers. The lawsuit alleges that Colony Ridge Apartments LLC, situated in Liberty County, Texas, deliberately engaged in the sale of unaffordable loans to unsuspecting families, facilitating their purchase of flood-prone land devoid of essential amenities such as sewage lines.
Operating approximately 30 miles northeast of Houston, Colony Ridge purportedly capitalized on the vulnerability of Hispanic families, promising them the realization of the American dream through homeownership in the Terrenos Houston community. However, the reality, as per federal officials, was starkly different, with families facing a nightmare scenario as they grappled with unmanageable financial burdens and the absence of basic utilities.
Assistant Attorney General for Civil Rights in the Department of Justice, Kristen Clarke, condemned Colony Ridge’s actions, stating, “Colony Ridge promised the American dream, but we allege that in reality, it has delivered a nightmare for thousands of hardworking Hispanic families who hoped to build their homes in the Terrenos Houston community.”
This landmark case, jointly pursued by the Justice Department and the U.S. Consumer Financial Protection Bureau, marks the first instance of the Justice Department applying the Fair Housing Act and Equal Credit Opportunity Act to combat predatory mortgage lending. Simultaneously, the Consumer Financial Protection Bureau asserts that this represents their inaugural federal lawsuit addressing violations of the Interstate Land Sales Full Disclosure Act.
In response to the legal action, Colony Ridge issued a firm denial, dismissing the allegations as “baseless.” CEO John Harris expressed confidence in the company’s ability to defend itself, characterizing the lawsuit as “outrageous and inflammatory.” Harris emphasized the positive experiences of landowners associated with the company, highlighting customer referrals as a testament to their thriving business.
As this pivotal case unfolds, it underscores the significance of legal intervention to safeguard vulnerable communities and underscores the commitment to upholding fair housing practices in the real estate sector.
