Texas files Colony Ridge suit for fraudulent practices

Residents of the Houston-area development, who were maligned by Republicans last year, have complained about the developer for years.

By Alejandro Serrano,
Texas Tribune

HOUSTON — Texas Attorney General Ken Paxton on Thursday sued Houston-area developer Colony Ridge for committing deceptive trade practices and real estate fraud against homebuyers there, months after state Republicans claimed many residents were undocumented immigrants and the area was a hub for drug cartels.

The state’s allegations mirror a lawsuit filed by the U.S. Department of Justice in December that alleged Colony Ridge lured thousands of Latinos into seller-financed mortgages and set them up to face foreclosure. The alleged practice, repeated thousands of times, destroyed those Latinos’ dreams of owning property, government officials said.

Paxton’s suit filed in federal court in Houston marks the most significant action to date taken by the state, whose agencies have received complaints from Colony Ridge residents for years about potential problems — including some that echoed the federal government’s allegations of financial wrongdoing. However, the state had little to show for those complaints, according to an investigation by The Texas Tribune and Houston Landing.

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“Colony Ridge’s business model is predicated on churning land purchasers through foreclosure mill,” Paxton’s lawsuit says. “Namely, Colony Ridge targets foreign born and Hispanic consumers with limited or no access to credit with promises of cheap, ready to build land and financing without proof of income.”

A Colony Ridge spokesperson did not immediately respond to a request for comment Thursday.

Right-wing media last year portrayed the development as a magnet for undocumented immigrants and criminal activity. Gov. Greg Abbott ordered lawmakers to address the development, but legislators struggled to craft bills that addressed the area after hearing from local officials and the developer. The Legislature ultimately approved up to $40 million in funds that could be used to pay for state troopers to patrol the Liberty County development.

A 2023 Houston Landing investigation found Colony Ridge had reacquired 45% of the 35,000-plus properties it had sold since 2012. The company’s practices raised concerns of a predatory lending scheme, experts told the Landing, which published the report in December, days before the Justice Department announced its lawsuit.