Texas Housing Developer Accused of Preying on Hispanic Buyers

Earlier this year, a sprawling residential development northeast of Houston catering mainly to Hispanic buyers, including undocumented migrants, came under fire from Texas Republicans who said the promise of homes there attracted migrants crossing illegally from Mexico.

But in an unexpected twist on Wednesday, it was the Biden administration that filed suit against the developer, Colony Ridge, for what the Justice Department and the Consumer Financial Protection Bureau said were predatory lending and dishonest sales practices that took advantage of predominantly Hispanic buyers.

“Colony Ridge promised the American dream, but we allege that in reality, it has delivered a nightmare for thousands of hardworking Hispanic families,” Kristen Clarke, assistant attorney general of the Justice Department’s Civil Rights Division, said in a statement announcing the suit.

Federal prosecutors said that the growth of Colony Ridge was fueled by a strategy of illegally targeting and pressuring Hispanic buyers with little or no credit. The Justice Department also accused the developers of offering financing without verifying the ability of buyers to pay, charging interest rates that “routinely exceed typical prevailing rates” and reselling the properties rapidly in cases of foreclosure.

Colony Ridge used Spanish marketing materials that misrepresented the properties in its Terrenos Houston subdivision, according to federal prosecutors.Credit…Danielle Villasana for The New York Times

John Harris, one of the owners of Colony Ridge, denied the allegations in the federal lawsuit, which he said he had only learned about after they were made public on Wednesday.

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