DOJ Targets Colony Ridge in Lawsuit Over Predatory Practices

The U.S. Department of Justice is taking legal action against Houstonarea developer Colony Ridge, accusing it of employing a sales scheme that preyed on Latino buyers through fraudulent lending practices.

The lawsuit, filed in the Southern District of Texas, contends that Colony Ridge engaged in misleading tactics, targeted vulnerable Latino consumers with predatory loans, exploited language barriers and made false statements about essential infrastructure.

Federal violations: The DOJ lawsuit alleges that Colony Ridge’s practices violate four federal laws, including the Equal Credit Opportunity Act and the Fair Housing Act. The government seeks to halt the alleged predatory lending practices, provide relief for affected individuals and impose civil penalties on the developers. Colony Ridge’s CEO, John Harris, called the allegations “baseless” and “inflammatory.”

Landing investigates: The law suit echoes many of the findings in a recent Houston Landing investigation that examined the business practices of the sprawling subdivision in Liberty County. The case marks the DOJ’s first attempt at “reverse redlining” through its Combatting Redlining Initiative.

‘Bait-and-switch’: The lawsuit outlines a bait-and-switch land sale scheme, asserting that Colony Ridge specifically targeted potential Latino buyers through Spanish-language advertising, promising minimal down payments and above-average interest rates. This alleged scheme resulted in an “extraordinary” foreclosure rate, with at least 30 percent of seller-financed lots foreclosed within three years — 15 times the national average.