Texas housing developer accused of taking advantage of Hispanic buyers

Share


Earlier this year, a sprawling residential development northeast of Houston that primarily caters to Hispanic buyers, including undocumented immigrants, came under fire from Texas Republicans, who said the promise of housing there attracted immigrants crossing illegally from Mexico.

But in a surprise twist Wednesday, it was the Biden administration that filed a lawsuit against the developer, Colony Ridge, for what the Department of Justice and the Consumer Financial Protection Bureau said were predatory lending and dishonest sales practices that They took advantage of predominantly Hispanic buyers.

“Colony Ridge promised the American dream, but we allege that, in reality, it has turned out to be a nightmare for thousands of working Hispanic families,” said Kristen Clarke, assistant attorney general for the Justice Department's Civil Rights Division, in a statement announcing the demand.

Federal prosecutors said Colony Ridge's growth was fueled by a strategy of illegally targeting and pressuring Hispanic buyers with little or no credit. The Justice Department also accused developers of offering financing without verifying buyers' ability to pay, charging interest rates that “routinely exceed typical prevailing rates,” and reselling properties quickly in foreclosure cases.

John Harris, one of Colony Ridge's owners, denied the allegations in the federal lawsuit, which he said he only learned about after they became public Wednesday.

“We are sure there is no basis there,” he said in a telephone interview. “We are proud of what we do for our clients. We have a good relationship with our clients. “I think it has no basis.”

Colony Ridge spent much of the fall defending itself against Republican lawmakers in Texas. Gov. Greg Abbott made the development an issue during two consecutive special legislative sessions after stories and segments in right-wing news outlets such as The Daily Wire and Fox News drew a connection between the development and increased immigrant arrivals to the border.

“We're taking this very seriously,” Abbott said in an interview on Fox News in September, the same month that ultraconservative Lt. Gov. Dan Patrick toured Colony Ridge by land and by flight in a state police helicopter. .

During hearings at the Texas Capitol in October, lawmakers heard testimony about flooding and other development issues. But lawmakers took no action beyond allocating millions in additional funding for law enforcement in the area. On Monday, Abbott signed the funding into law.

Mr Harris said he felt his business had been misinterpreted and misrepresented by both sides of the political spectrum.

“Either I'm the guy who runs the Underground Railroad to bring in illegals, or I'm the guy who mistreats the poor,” he said. “It seems that no matter which side you are on, you can attack me if you want.”

The development has grown rapidly since it began selling properties more than a decade ago on parcels cut into dense forest about 30 miles from downtown Houston. It is now home to more than 40,000 residents spread across several independent subdivisions.

Mr. Harris and his co-owners have said they plan to build more and hope the development will eventually double its current size.

The influx of new residents into rural Liberty County, where the development is located, has already strained local resources, particularly schools, and exacerbated tensions with the nearby town of Plum Grove, whose residents objected to increased traffic and They blamed Colony Ridge for damage to local roads, flooding, and crime.

In the lawsuit filed Wednesday, prosecutors accused Colony Ridge of deceptive practices and discrimination in violation of federal housing and consumer finance law.

They said the developer initiated foreclosures on at least 30 percent of the properties within three years of selling them. From 2021 to 2022, the number of foreclosures in Liberty County surpassed those in Dallas and San Antonio, according to the complaint.

Colony Ridge also used Spanish-language marketing materials that misrepresented the properties in its Terrenos Houston subdivisions, prosecutors said, promising water, sewer and electric connections that were not present at the time of purchase. The company disclosed that fact in documents provided only in English, they said.

According to prosecutors, Colony Ridge recorded more than 28,000 transactions in Terrenos Houston subdivisions over a five-year period, and more than 90 percent involved at least one Hispanic consumer.

The lawsuit also named companies affiliated with Colony Ridge, as well as Loan Originator Services LLC, a mortgage company that prosecutors said originated all of the seller-financed loans for Colony Ridge.

Harris acknowledged in the phone interview that not all properties had water and sewer lines when they were sold. “But we have a schedule and people know it,” he said, adding that the electrical connections were controlled by the power company.

“Look, I do it to make money, but I care a lot about people,” he said. “The truth will come out in the end.”



Source link
Share

Leave a Reply

Your email address will not be published. Required fields are marked *