Federal authorities sued Houston-area developer Colony Ridge on Wednesday, with accusations of them luring Latino home buyers into seller-financed mortgages and setting them up to default and face foreclosure. The lawsuit comes one week after the Houston Landing published an investigation about Colony Ridge’s lending practices.
Colony Ridge entities developed a collection of subdivisions that cover about 33,000 acres of land 30 miles north of Houston. Federal authorities allege that Colony Ridge used Spanish videos to target prospective Latino buyers, and once a person visited the property, the developer allegedly used high-pressure sales tactics, required minimal down payments and extended loans without assessing a buyer’s ability to repay or verifying their gross income.
Alamdar S. Hamdani, U.S. Attorney for area of Houston, said: “Colony Ridge set out to exploit something as old as America: An immigrant’s dream of owning a home. As alleged in the complaint, Colony Ridge’s exploitative practice began with misleading advertisements on platforms like TikTok and often ended with families facing economic ruin. No home – and shattered dreams.”
Federal authorities also said at a news conference on Wednesday that Colony Ridge also misrepresented facts — such as guarantees of water, electricity and sewer hook-ups — “causing borrowers to incur substantial unanticipated expenses after closing”, federal officials said. Once a buyer fell behind on payments, the company bought the land again and repeated the process — sometimes multiple times with the same piece of property.
Colony Ridge’s chief executive John Harris said Wednesday he was “blindsided” by the lawsuit, which he called “baseless and both outrageous and inflammatory. Our business thrives off customer referrals because landowners are happy and able to experience the American Dream of owning property. We loan to those who have no opportunity to get a loan from anyone else and we are proud of the relationship we have developed with customers. We look forward to telling the true story of Colony Ridge.”
Editorial credit: Paul Brady Photography / Shutterstock.com
