Colony Ridge Agrees to Pay $68 Million to Settle Lawsuit

A large land developer near Houston, Colony Ridge, has agreed to pay $68 million to settle a lawsuit. The lawsuit claimed the company used unfair sales and loan methods. Colony Ridge will also make it harder for people to buy land there for a while and check buyer papers more carefully.
By Newsroom | Business, Texas |

Settlement Addresses Accusations of Predatory Lending and Deceptive Practices

Colony Ridge, a large residential developer near Houston, Texas, has agreed to a substantial settlement totaling $68 million. This agreement aims to resolve a lawsuit brought by federal regulators, including the Department of Justice and the U.S. Consumer Financial Protection Bureau. The lawsuit alleged that the company engaged in predatory land sales and lending practices, specifically targeting Hispanic borrowers. As part of the settlement, Colony Ridge will also pause approvals for new residential plats for three years and implement stricter requirements for buyer documentation.

Colony Ridge in Texas Agrees to $68 Million Settlement, Adds Immigration ID Requirements - 1

Timeline of Events and Key Actors

The settlement, publicly announced in February 2026, follows an investigation into Colony Ridge's business practices. Key entities involved include:

Colony Ridge in Texas Agrees to $68 Million Settlement, Adds Immigration ID Requirements - 2

  • Colony Ridge Land LLC and its affiliates: The developer and lender accused of predatory practices.

  • U.S. Department of Justice (DOJ), Civil Rights Division: Led the federal investigation and settlement.

  • U.S. Consumer Financial Protection Bureau (CFPB): Also a party to the agreement.

  • Texas Attorney General Ken Paxton: Involved in the settlement, with provisions for law enforcement funding that can support federal immigration enforcement.

  • Accusers and Complainants: Including individuals who filed complaints with state agencies years prior and conservative media outlets that highlighted the issues.

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The lawsuit alleged violations of the Equal Credit Opportunity Act (ECOA) and the Fair Housing Act (FHA), stemming from claims that Colony Ridge used deceptive advertising, including Spanish-language videos via platforms like TikTok, to target vulnerable Hispanic buyers with predatory loans and seller-financed mortgages.

Colony Ridge in Texas Agrees to $68 Million Settlement, Adds Immigration ID Requirements - 3

Settlement Terms and Requirements

The $68 million settlement is designed to address multiple accusations and bring about significant changes in Colony Ridge's operations. The key terms include:

Colony Ridge in Texas Agrees to $68 Million Settlement, Adds Immigration ID Requirements - 4

  • Financial Payment: A total of $68,000,000 to resolve the lawsuit.

  • Construction Pause: Colony Ridge has agreed to halt seeking approvals for any new residential plats for a period of three years.

  • Stricter Buyer Documentation: The company will implement enhanced requirements for documentation from prospective buyers.

  • Infrastructure Investment: Colony Ridge will invest in infrastructure on its properties.

  • Law Enforcement Funding: A portion of the settlement funds can be allocated to law enforcement, with a specific mention of supporting 287(g) agreements which allow local officers to assist in federal immigration enforcement.

  • Updated Disclosures: Implementation of updated disclosures for all land sales.

  • Continued Oversight: State agencies will maintain oversight of improvements over the coming years.

Denials and Motivations

Despite the significant settlement, Colony Ridge has issued statements denying any wrongdoing or responsibility for the accusations. The company asserts that it is paying the settlement amount solely to conclude the legal case. This stance suggests a desire to avoid further legal entrenchment and move forward, though it stands in contrast to the findings of the investigating agencies.

Impact on Borrowers and Communities

The settlement aims to provide relief to buyers allegedly harmed by Colony Ridge's practices. Homebuyers may receive loan relief, and individuals affected by text message violations under the Telephone Consumer Protection Act (TCPA) could receive between $1,000 and $2,000 each. The agreement also signals a heightened regulatory focus on the rapid development of fringe communities in the Houston area. The developments themselves, spanning approximately 33,000 acres, have seen rapid expansion over the past decade, attracting tens of thousands of new residents.

Expert Commentary and Regulatory Implications

While direct expert analysis of this specific settlement is not yet available in the provided data, the agreement highlights a broader trend of increased regulatory scrutiny on large-scale developers operating in areas with rapid population growth and diverse populations. The involvement of both the DOJ and CFPB underscores the seriousness of the alleged violations concerning fair lending and housing laws. The inclusion of provisions related to immigration enforcement in the settlement, as noted by Texas Attorney General Ken Paxton, adds a layer of complexity to the resolution.

Conclusion and Next Steps

The settlement between Colony Ridge and federal and state regulators marks a significant legal resolution, imposing substantial financial penalties and operational changes on the developer. The core allegations revolve around predatory lending and deceptive practices targeting a specific demographic. Colony Ridge's denial of wrongdoing, coupled with its agreement to settle, presents a complex situation.

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Moving forward, the focus will likely be on:

  • Implementation of Settlement Terms: Ensuring Colony Ridge adheres to the mandated changes in selling practices, documentation, and infrastructure development.

  • Buyer Relief: Verifying that eligible homebuyers and TCPA class members receive the intended financial relief.

  • Regulatory Oversight: The continued monitoring by state agencies to ensure compliance and improvement in Colony Ridge communities.

  • Broader Market Impact: Observing whether this settlement influences regulatory approaches to other rapidly developing communities across Texas and beyond.

The resolution, while ending a high-profile investigation, raises questions about the long-term impact on the communities developed by Colony Ridge and the effectiveness of regulatory measures in preventing such alleged practices in the future.

Sources

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Frequently Asked Questions

Q: What is Colony Ridge being sued for?
Colony Ridge was accused of using unfair sales and loan practices, especially with Hispanic buyers. They were also accused of using misleading ads.
Q: How much money will Colony Ridge pay?
Colony Ridge has agreed to pay $68 million to settle the lawsuit.
Q: What changes will Colony Ridge make?
The company will stop approving new land sales for three years. They will also check buyer documents more carefully and update their sales information.
Q: Did Colony Ridge admit they did anything wrong?
No, Colony Ridge said they did not do anything wrong. They are paying the money to end the legal case.
Q: Who was involved in this lawsuit?
The U.S. Department of Justice and the Consumer Financial Protection Bureau led the lawsuit. The Texas Attorney General was also part of the agreement.