LIBERTY COUNTY, Texas (KTRK) — A developer in Liberty County accused of targeting Latino borrowers has reached a million-dollar settlement with the U.S. Department of Justice, according to a press release.
On Tuesday, the DOJ’s office announced that Colony Ridge Land LLC and its affiliates (Colony Ridge) have agreed to pay $68 million to resolve the lawsuit that accused them of using predatory loans and false statements.
Despite the massive settlement, the Colony Ridge developer denies any wrongdoing.
The lawsuit against Colony Ridge alleged that the Houston-area developer operated an illegal land sales scheme and defrauded Latino borrowers through TikTok.
The developer of the subdivisions that cover about 33,000 acres of land, about 30 miles north of Houston, allegedly used Spanish videos to target prospective Latino buyers. It markets these subdivisions using the names “Terrenos Houston” and “Terrenos Santa Fe.”
Once a person visited the property, Colony Ridge 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.
Once a buyer fell behind on payments, the company allegedly bought the land again and repeated the process – sometimes multiple times with the same piece of property.
The DOJ said the homes ended up having poor water, sewer, and electrical infrastructure, and payment plans were hard to keep up with. In some cases, interest rates were nearly 13%.
“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… The changes required by this settlement will promote public safety, and affordable and sustainable homeownership in America, key priorities of this Administration,” the DOJ said in the release.
Colony Ridge also released a statement denying any responsibility or contribution to the accusations. It says they’re only paying out the settlement to end the case.
The DOJ said the money will be used to pay for infrastructure improvements, increase housing affordability, protect homeowners, and end new home sales for the next three years.
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