HOUSTON, TX Dec. 18, 2023 _ The Consumer Financial Protection Bureau and the United States of America have filed a lawsuit against the developers of Colony Ridge, alleging discriminatory targeting of Hispanic consumers with predatory financing and other unlawful conduct. The lawsuit, filed today, seeks to obtain redress for consumers harmed by the developers’ actions and to secure penalties against the defendants.
Since 2021, sisters SuEllen Sanchez and Keilah Sanchez and others have been exposing deceptive practices from Colony Ridge through Terrenos Houston Demanda.
“We have gathered evidence and heard stories of struggles in Liberty County where the developers seemingly had control. Despite the challenges, we have shared these struggles with the press and government agencies, while facing tears and persecution for defending these victims. Our goal has always been to ensure justice for those without a voice. Despite informing Texas senators about Colony Ridge’s deceptive practices, they have turned a blind eye, ignoring our pleas and silencing the voices of the victims,” they state.
The plaintiffs, represented by the Bureau and the United States, claim that Colony Ridge Development, LLC, Colony Ridge BV, LLC, Colony Ridge Land, LLC, and Loan Originator Services, LLC (collectively, Defendants) have lured tens of thousands of Hispanic consumers into using predatory seller financing to purchase land in Colony Ridge. The developers have targeted these consumers with promises of achieving the American dream, but instead, the plaintiffs argue that Colony Ridge sets consumers up to fail.
Colony Ridge has developed more than 40,000 lots in six residential subdivisions in Liberty County, Texas, known as the Terrenos Houston Subdivisions. The developers offer vacant lots for purchase and seller-financing to fund consumers’ purchases. To attract Hispanic consumers, Colony Ridge advertises and markets the Terrenos Houston Subdivisions under the aliases Terrenos Houston and Terrenos Santa Fe. The advertisements predominantly use Spanish language and feature cultural markers associated with Latin America.
The plaintiffs allege that Colony Ridge falsely represents that the lots in the Terrenos Houston Subdivisions come with the necessary infrastructure for water, sewer, and electrical services. However, many of the lots lack this infrastructure, and some parts of the subdivisions have experienced significant flooding. The plaintiffs argue that Colony Ridge’s marketing and the representations of its agents further obscure these facts.
Of particular concern is the absence of a water processing plant, which has resulted in severe water contamination. Residents are subjected to the detrimental effects of inadequate access to clean water, posing significant health risks. Additionally, improper sewage disposal has led to contamination of Lake Houston, the primary water source for the City of Houston, as confirmed by the San Jacinto River Authority.
The presence of toxic materials, such as silica mixed into the cement used for road construction within Colony Ridge, has raised concerns of potential cancer risks for both residents and workers.
Another pressing issue faced by the community is the recurring problem of flooding. Colony Ridge experiences frequent flooding events, leaving residents vulnerable and exposed to hazardous conditions. The lack of appropriate infrastructure and effective flood management strategies exacerbates the challenges faced by the immigrant population, increasing their vulnerability to property damage and personal harm.
Moreover, deceptive sales and trade practices have come to light, revealing a distressing trend of luring illegal immigrants to Texas through various social media platforms. This exploitative behavior not only perpetuates the vulnerability of these individuals but also undermines the integrity of the immigration system.
Reports have also emerged of stalking and harassment directed towards anyone who dares to voice their concerns regarding the living conditions and treatment of immigrants in Colony Ridge. Such actions are unacceptable and go against the principles of inclusivity and respect that Houston prides itself on.
Efforts are currently underway to address these issues and provide immediate relief to the immigrant population in Colony Ridge. Local authorities, community organizations, and concerned citizens are uniting to advocate for the rights and well-being of those affected. It is essential that these challenges are met with compassion, empathy, and a commitment to finding lasting solutions.
Since 2011, Colony Ridge has offered seller-financed loans to consumers seeking to purchase a lot in the Terrenos Houston Subdivisions. However, the plaintiffs claim that Colony Ridge fails to assess borrowers’ ability to repay, relying on self-reported (but unverified) gross income and a nominal down payment.
Loan Originator Services, LLC, which originates all of Colony Ridge’s seller-financed mortgages, also fails to assess borrowers’ ability to repay and does not request proof of income or liabilities.
The plaintiffs assert that Colony Ridge directs consumers towards its predatory loan product by only presenting its in-house options, giving the impression that its mortgages are the exclusive means of financing lots in the Terrenos Houston Subdivisions. The developers then close on their own loans with little oversight, retaining all servicing rights.
The targeting of Hispanic consumers by Colony Ridge has been remarkably effective. Between September 2017 and September 2022, approximately 91 percent of all transactions in the Terrenos Houston Subdivisions involved at least one Hispanic consumer, despite the Houston Metropolitan Statistical Area being around 38 percent Hispanic.
The plaintiffs further allege that Colony Ridge’s seller-financed mortgages have an extraordinary failure rate. Foreclosure records reveal that Colony Ridge initiated foreclosures in at least 30 percent of all seller-financed lots within three years of the consumer’s purchase date, with most occurring much sooner. In comparison, the national delinquency rate for home loans originated in 2019 was 2.1 percent within three years of origination.
Colony Ridge has benefited from these mortgage failures through the high interest rates it charges, the late fees it assesses, and the down payments, mortgage payments, and other fees it collects for land that is often unusable to consumers. The developers also engage in property flipping, consistently repurchasing foreclosed properties and reselling them at higher prices.
The plaintiffs seek injunctive relief to stop Colony Ridge’s unlawful conduct, obtain redress for harmed consumers, and secure penalties against
Houston has recently become the center of national attention due to a series of alarming problems surrounding the living conditions and treatment of immigrants in the Colony Ridge community. These issues have gained significant national news coverage from major outlets, shedding light on the urgent need for immediate action.
Colony Ridge, a residential community located in the outskirts of Houston, was developed by John Harris, a prominent real estate developer. Initially, Colony Ridge was advertised as an affordable housing solution that aimed to meet the growing demands of the region’s population. The community was envisioned as a vibrant and inclusive environment, attracting families, young professionals, and individuals seeking a quality living experience in a beautiful setting.
However, over time, a series of troubling issues began to surface, tarnishing the reputation of the community. These problems primarily revolved around the treatment and living conditions of the immigrant population residing within Colony Ridge. Concerns regarding unsanitary living conditions, health risks, flooding, deceptive sales practices, and instances of stalking and harassment have all been identified as critical challenges faced by the immigrant population.
Of particular concern is the absence of a water processing plant, which has resulted in severe water contamination. Residents are subjected to the detrimental effects of inadequate access to clean water, posing significant health risks.
Additionally, improper sewage disposal has led to contamination of Lake Houston, the primary water source for the City of Houston, as confirmed by the San Jacinto River Authority.
The presence of toxic materials, such as silica mixed into the cement used for road construction within Colony Ridge, has raised concerns of potential cancer risks for both residents and workers.
Another pressing issue faced by the community is the recurring problem of flooding. Colony Ridge experiences frequent flooding events, leaving residents vulnerable and exposed to hazardous conditions. The lack of appropriate infrastructure and effective flood management strategies exacerbates the challenges faced by the immigrant population, increasing their vulnerability to property damage and personal harm.
Moreover, deceptive sales and trade practices have come to light, revealing a distressing trend of luring illegal immigrants to Texas through various social media platforms. This exploitative behavior not only perpetuates the vulnerability of these individuals but also undermines the integrity of the immigration system.
Reports have also emerged of stalking and harassment directed towards anyone who dares to voice their concerns regarding the living conditions and treatment of immigrants in Colony Ridge. Such actions are unacceptable and go against the principles of inclusivity and respect that Houston prides itself on.
Efforts are currently underway to address these issues and provide immediate relief to the immigrant population in Colony Ridge. Local authorities, community organizations, and concerned citizens are uniting to advocate for the rights and well-being of those affected. It is essential that these challenges are met with compassion, empathy, and a commitment to finding lasting solutions.
For press inquiries please reach out to:
SuEllen and Keilah Sánchez
Terrenos Houston Lawsuit
info@terrenoshoustondemanda.com
Anyone who believes they have been harmed by the practices of Colony Ridge Development LLC, Colony Ridge BV LLC, Colony Ridge Land LLC and Loan Originator Services LLC should call the Justice Department’s Housing Discrimination Hotline at 1-833-591-0291, press 1 for English, then 3 for fair lending and then 1 for Colony Ridge Lawsuit to leave a message.
For the Spanish Hotline, callers should press 2 for Spanish, then 3 for fair lending and then 1 for Colony Ridge Lawsuit to leave a message. Individuals can also send an email to ColonyRidge.Lawsuit@usdoj.gov.
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This website has been a self-funded citizen effort to spread the word about Colony Ridge and what they have done to their victims. We have been harassed because of these efforts and have also been a crucial bridge for the Federal Government to hear from victims of what the DOJ and CFPB consider a land scheme.
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