The United States Department of Justice, the Consumer Financial Protection Bureau and the State of Texas reached a $68 million settlement with Colony Ridge developers on February 10, 2026, resolving allegations of predatory lending and deceptive sales practices targeting Hispanic consumers. The agreement, filed in U.S. District Court in Houston, ends two related lawsuits without an admission of wrongdoing by the defendants.
Colony Ridge, a large residential development in Liberty County northeast of Houston, has drawn scrutiny since 2023 for its marketing and financing of land lots primarily to Spanish-speaking buyers. Federal authorities filed suit in December 2023, claiming the developers violated the Equal Credit Opportunity Act and the Fair Housing Act by offering high-interest loans with minimal credit checks, leading to widespread foreclosures and financial distress among Hispanic families. The complaint described how the company advertised affordable land with utilities and drainage, but delivered flood-prone properties lacking basic infrastructure, resulting in repeated cycles of default and resale.
Texas Attorney General Ken Paxton joined with an amended complaint in March 2024, alleging violations of the Texas Deceptive Trade Practices Act, fraud in real estate transactions, the Consumer Financial Protection Act and the Interstate Land Sales Full Disclosure Act. State claims focused on false advertising, misleading representations about property conditions and inadequate disclosures in sales contracts.
Under the settlement terms, Colony Ridge entities—including Colony Ridge Development LLC, Colony Ridge BV LLC, Colony Ridge Land LLC, Colony Ridge Inc., T-Rex Management Inc., John Harris, Houston El Norte Property Owners Association Inc. and CH&P Management LLC—must allocate $48 million for infrastructure upgrades, such as roads, flood prevention and sewage systems. An additional $20 million will fund law enforcement initiatives, including construction of a local center to address community safety concerns.
The agreement imposes a 36-month moratorium on new residential lot platting for direct-to-consumer sales, requires hiring an independent compliance expert and mandates stricter buyer verification, such as a Texas ID, driver’s license, passport or visa. These measures aim to prevent future deceptive practices and improve living conditions in the development, which spans thousands of acres and houses an estimated 40,000 to 75,000 residents.
Paxton described the deal as a victory against an “illegal alien haven,” emphasizing its role in enhancing border security and local policing. Federal officials highlighted the resolution’s focus on protecting vulnerable consumers from discriminatory lending. Colony Ridge representatives maintained their denial of the allegations, stating the settlement facilitates ongoing operations while addressing government concerns.
The case originated amid broader debates over immigration and housing in Texas, with conservative media outlets amplifying claims that the development attracted undocumented immigrants through lax policies. The settlement does not address potential criminal matters and excludes liability for flooding damages unrelated to the agreement’s infrastructure provisions.
