NEW CANEY, Texas — Texas Attorney General Ken Paxton filed a lawsuit Thursday against the developer of the Colony Ridge community in Liberty County.
The lawsuit alleged that the developer participated in deceptive trade practices, fraud in real estate transactions and other violations of Texas and federal law.
Since last year, we've been reporting on the controversy surrounding Colony Ridge, the community that Republicans labeled a hotspot for undocumented immigrants and crime. The New Caney neighborhood, about 30 miles northeast of Houston, is home to roughly 40,000 people, many of them Hispanic immigrants. Developers have been accused of selling relatively cheap plots of land to homeowners there for about 10 years.
According to the attorney general's office, a monthslong investigation into the Colony Ridge development found that the developer made numerous false, misleading, deceptive sales, marketing and lending practices that enabled their business model.
The lawsuit alleged that Colony Ridge targeted foreign-born and Hispanic consumers with limited or no access to credit with promises of cheap, ready-to-build land and financing without proof of income. The lawsuit went on to say that Colony Ridge misrepresented the conditions of the land and community, which often does not have the promised infrastructure like sewer, water or electricity. These issues prevented the buyer from making practical use of the land. The Attorney General's office said Colony Ridge would then foreclose on the buyer and re-possess the land before selling the same plots to others who believed they were getting a good deal.
The investigation also revealed that former employees of Colony Ridge were instructed to avoid selling to customers who could speak English or who did not appear to be of Latino or Hispanic heritage.
The attorney general's office said the predatory practices of Colony Ridge led to a foreclosure rate 50 times greater than the 2023 national average.
“Colony Ridge has been flagrantly violating Texas law. The development profited from targeting consumers with fraudulent claims and predatory lending practices” Paxton said. “Their deceptive practices have created unjust and outsized harms. Nearby communities have borne a tremendous cost for the scheme that made Colony Ridge’s developers a fortune.”
In December 2023, the Justice Department and Consumer Financial Protection Bureau (CFPB) filed a similar lawsuit against the Colony Ridge development. Their lawsuit claimed that Colony Ridge advertised on TikTok or other social media platforms and used national flags and regional music from Latin America to attract buyers with seller financing that requires no credit check and only a small deposit.
We've reached out to Colony Ridge for comment. We've yet to hear back.