Federal settlement forces land developer reforms after widespread lending and housing abuses.
The U.S. Department of Justice announced a $68 million settlement tied to a predatory land sales and lending case involving a large development near Houston, Texas. The case centered on Colony Ridge Land LLC and related companies, which were accused of steering Hispanic buyers into risky land deals that often ended in foreclosure and long-term money trouble. Federal officials said the conduct broke fair lending and fair housing laws meant to protect buyers from unfair treatment.
According to court filings, the development marketed land ownership as an easy path to owning a home. Many buyers were drawn in by ads and sales pitches that promised simple terms and low barriers to entry. Investigators later said those claims did not match reality. Some buyers were not told about flood risks tied to the land. Others were sold lots that were not ready for homes or lacked basic services. In many cases, buyers were given loans directly by the seller without checks on income or debt, making it more likely that payments would fall behind.
Federal and state officials described the pattern as one that trapped families in a cycle of missed payments and loss of property. When buyers could not keep up, foreclosures followed at high rates. Credit damage often came next, making it harder for families to rent, buy, or borrow elsewhere. The Justice Department said the impact went beyond money loss and reached into housing stability and neighborhood safety.
The case was built through joint work between the Justice Department, the Consumer Financial Protection Bureau, and the Texas Office of the Attorney General. Lawsuits were filed in late 2023 and early 2024, and the settlement resolves those claims without a trial. Officials said the agreement is meant to correct past harm and prevent similar conduct in the future.
Under the terms of the settlement, a large share of the money will go toward fixing long-standing problems inside the development. Forty-eight million dollars is set aside for roads, drainage, and other basic needs. Of that amount, eighteen million dollars is reserved for drainage projects to deal with serious flooding that has damaged homes and land. Another thirty million dollars will fund broader improvements meant to make the area safer and more livable.
The settlement also requires major changes to how land loans are approved. The companies must now review income, assets, and debts before offering financing. The goal is to reduce loans that buyers cannot afford and lower the number of foreclosures. New plans must also be put in place to help borrowers avoid default and to reduce how often properties are taken back by the seller.
Steps are included to address past credit harm as well. The companies must review how missed payments and defaults were reported and take action to limit unfair damage to credit records where possible. Advertising rules are tightened to make sure future buyers get clear and honest details about loan terms, property condition, and access to services like water and power.
Another part of the agreement focuses on safety. Twenty million dollars will support a stronger law enforcement presence in the area, tied to meeting local and state rules. Officials said this is meant to address long-standing concerns from residents about slow response times and limited coverage.
The settlement also places limits on future development. New residential lots sold directly to buyers are paused for three years. During this time, the companies must follow stricter rules on buyer identity documents tied to state and federal standards.
Justice Department leaders said the case sends a clear message that unfair housing and lending practices will face serious action. The agreement is framed as both a penalty and a reset, aimed at safer home buying, clearer rules, and fewer families losing homes through deals they never had a fair chance to keep.
Sources:
Civil Rights Division Secures $68M Settlement in Predatory Land Sales and Lending Lawsuit
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