Texas housing developer accused of preying on Hispanic buyers
Earlier this year, a sprawling residential neighborhood northeast of Houston that catered mainly to Spanish-speaking buyers, including undocumented immigrants, came under fire by Texas Republicans, who said the promise of homes there attracted migrants crossing illegally from Mexico crossed.
But in an unexpected twist, on Wednesday the Biden administration filed charges against the developer, Colony Ridge, for what the Justice Department and the Consumer Financial Protection Bureau said were predatory lending and unfair sales practices that took advantage of predominantly Hispanic buyers.
“Colony Ridge promised the American dream, but we argue it has actually delivered a nightmare for thousands of hardworking Hispanic families,” said Kristen Clarke, assistant attorney general of the Justice Department’s Civil Rights Division. in a statement announcing the lawsuit.
Federal prosecutors said Colony Ridge’s growth was fueled by a strategy of illegally squeezing Hispanic buyers with little or no credit. The Justice Department also accused the developers of offering financing without verifying buyers’ ability to pay, charging interest rates “routinely higher than customary rates” and quickly reselling the properties in the event of foreclosure.
John Harris, one of Colony Ridge’s owners, denied the allegations in the federal lawsuit, which he said he only learned about after they were made public Wednesday.
“We are convinced that there is no foundation at all,” he said in a telephone interview. “We are proud of what we do for our customers. We have a good relationship with our customers. I think it is unfounded.”
Colony Ridge spent much of the fall defending itself to Republican lawmakers in Texas. Gov. Greg Abbott made the development the topic of two consecutive special legislative sessions after stories and segments in right-wing news outlets such as The Daily Wire and Fox News linked the development to the increase in the number of migrants arriving at the border.
“We are taking this very seriously,” Mr Abbott said in an interview on Fox News in September, the same month that ultraconservative Lt. Gov. Dan Patrick toured Colony Ridge on site and by flying over in a state police helicopter.
During hearings at the Texas Capitol in October, lawmakers heard testimony about flooding and other development issues. But lawmakers took no action other than allocating millions in additional funding for law enforcement in the area. On Monday, Mr. Abbott signed the funding into law.
Mr Harris said he felt his cases were misunderstood and misrepresented by both sides of the political spectrum.
“I’m either the guy who runs the underground railroad to transport illegal immigrants, or I’m the guy who mistreats poor people,” he said. “It seems that no matter which side you’re on, you can attack me if you want.”
The development has grown rapidly since it first began selling properties on lots cut into dense forest more than a decade ago, about 30 miles from downtown Houston. It is now home to over 40,000 residents spread across several separate subdivisions.
Mr. Harris and his co-owners have said they plan to build more, and they expect the project will eventually more than double its current size.
The influx of new residents to rural Liberty County, where the development is located, has already strained local resources, especially schools, and fueled tensions with the nearby town of Plum Grove, whose residents objected to the increased blamed traffic and Colony Ridge for the damage to the city. local roads, flooding and crime.
In the lawsuit filed Wednesday, plaintiffs accused Colony Ridge of deceptive practices and discrimination in violation of federal housing and consumer finance laws.
They said the developer had seized at least 30 percent of the properties within three years of selling them. According to the complaint, from 2021 to 2022, the number of foreclosures in Liberty County exceeded those in Dallas and San Antonio.
Colony Ridge also used Spanish marketing materials that misrepresented the properties in Terrenos Houston subdivisions, prosecutors said, promising water, sewer and electric hookups that were not available at the time of purchase. The company disclosed this fact in paperwork provided only in English, they said.
According to prosecutors, Colony Ridge recorded more than 28,000 transactions in Terrenos Houston subdivisions over a five-year period, and more than 90 percent involved at least one Spanish-speaking consumer.
The lawsuit also named companies associated with Colony Ridge, as well as Loan Originator Services LLC, a mortgage company that, prosecutors said, originated all of the seller-financed loans for Colony Ridge.
Mr. Harris acknowledged in the telephone interview that not all properties had water and sewer lines when they were sold. “But we have a timeline, and people know it,” he said, adding that the electrical connections were managed by the power company.
“Look, I do it to make money, but the people are very important to me,” he said. “The truth will eventually come to light.”