Colony Ridge Settlement Requires Changes to Lending Practices Amid Allegations

Wed Feb 11 2026 00:52:36 GMT+0200 (Eastern European Standard Time)

The owners of Colony Ridge, implicated in a predatory lending scheme targeting Latino buyers, have reached a settlement requiring stricter documentation and investment in community safety and infrastructure.

Colony Ridge, a Houston-area development accused of exploiting Latino homebuyers through predatory lending, has agreed to a legal settlement. The agreement mandates new documentation practices, prohibits marketing tactics deemed deceptive, and requires significant investments in local law enforcement and infrastructure to address concerns raised by Texas officials and the federal government. The settlement is seen as a win for advocacy groups and hardline immigration supporter, suggesting a crackdown on illegal practices.

The owners of Colony Ridge, a Houston-area developer accused of running a predatory lending scheme that deceived Latinos, agreed to a sweeping legal settlement that will require them to invest in law enforcement and infrastructure on their properties and tighten selling practices to address a range of accusations from Texas GOP leaders and conservative media.

Chief among the allegations was that Colony Ridge developers sold land to undocumented people, giving rise to a crime-ridden complex of subdivisions about 30 miles outside Houston allegedly being run by Mexican drug cartels.

The developers denied that their communities were unsafe, a contention backed by testimony from local officials when the Legislature held special hearings in 2023 in response to outrage and accounts from residents in the developments. Texas Attorney General Ken Paxton sued the developers soon after, accusing them of deceptive sales, marketing and lending practices in a suit that echoed claims lodged by the federal government in a separate case.

Under the settlement released Tuesday, Colony Ridge’s owners agreed to tighten the documentation it requires from buyers. Would-be purchasers will now have to present a Texas ID or driver’s license — which undocumented immigrants cannot obtain in Texas — or a passport or visa.

The agreement resolves state and federal lawsuits, which alleged the owners of Colony Ridge lured would-be Spanish-speaking homebuyers into seller-financed mortgages with high interests that they could not afford. By federal authorities’ estimate, roughly one in four Colony Ridge loans resulted in foreclosure. The company would then flip those properties to new unsuspecting customers eager to become homeowners, court filings allege.

The federal case, filed by the Biden administration’s Justice Department in late 2023, also accused Colony Ridge of misrepresenting facts such as guarantees of water, electricity and sewer hook-ups and whether properties had previously flooded.

The settlement seeks to address those accusations. Colony Ridge agreed to: pause seeking approvals for any new residential plats for three years; establish new criteria for approving loans and offer relief to customers facing foreclosure; ensure that its advertising and marketing is truthful; spend $48 million on infrastructure projects like roads and drainage systems; offer discounts to peace officers in an effort to encourage them to live in the development; and earmark $20 million for law enforcement, including the construction of a new police station within the community and money specifically for immigration enforcement.

Spokespeople for Colony Ridge did not immediately respond to requests for comment. In a statement, Paxton said the settlement has resulted in Colony Ridge’s owners paying “a steep cost for their unlawful actions.”

“My office will continue to bring the full force of the law against anyone who threatens the safety of our state or creates a safe harbor for illegals,” Paxton said. Harmeet K. Dhillon, who oversees the Justice Department’s civil rights division, celebrated the settlement as a victory against discrimination — and the promotion of illegal immigration.

Michael Quinn Sullivan, publisher of the right-wing Texas Scorecard, called the settlement a “huge win on a major issue” for Paxton. SuEllen Sanchez, a resident who filed complaints with state agencies about Colony Ridge years ago, expressed optimism that “they won’t be able to scam more immigrants.”