Justice Department suing Colony Ridge over land practices and financing
WASHINGTON, D.C. — Just as the upheaval over Colony Ridge appeared to be leveling out, following little response by the state legislature during a recent special session, the Justice Department has filed suit against the developer.
That suit, filed Tuesday, alleges the development "targets Hispanic borrowers."
"Today's complaint alleges that Colony Ridge targeted Hispanic consumers with predatory loans, misled borrowers about the water, sewer, and electrical infrastructure on its lots, and exploited language barriers by conducting most of its marketing in Spanish while offering important transaction documents only in English," said Attorney General Merrick B. Garland. "Discrimination in lending harms families and neighborhoods for generations; it is wrong, and it has no place in our country. That is why I launched the Department's Combating Redlining Initiative more than two years ago and why we remain steadfast in our commitment to continue this work."
Colony Ridge CEO John Harris fired back in a statement of his displeasure over the suit's allegations.
"We are concerned that the Justice Department would pursue this action. The lawsuit is baseless and both outrageous and inflammatory. Our business thrives on customer referrals because landowners are happy and able to experience the American Dream of owning property," Harris said.
The complaint, which was filed in the Southern District of Texas in Houston, alleges the following:
- Misleads borrowers about infrastructure on the lots it sells
- Sells lots that flood with rain and raw sewage
- Targets Hispanic consumers with predatory loans
- Churns through borrowers in a cycle of foreclosure
- Exploits language barriers at borrowers' expense
The development, which has been under attack for some time, mainly by the right, now appears to be under attack from all sides.
"Since at least 2016, land development companies Colony Ridge Development, LLC, Colony Ridge BV, LLC, and affiliate mortgage company Colony Ridge Land, LLC, collectively, Colony Ridge, have lured tens of thousands of Hispanic consumers into using predatory seller financing to purchase land, promising they would 'Logra el sueño Americano aquí!!', "Achieve the American dream here!!". Instead, Colony Ridge sets consumers up to fail," the suit reads.
Developers have long claimed that efforts have offered the American dream to buyers, primarily Hispanics, but now come under attack for those very practices.
"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," Harris's statement concluded.