NEW CANEY, Texas — For months we've been reporting on the controversy surrounding Colony Ridge, the Liberty County 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 selling relatively cheap plots of land to homeowners there for about 10 years.
In a lawsuit filed by the Justice Department and Consumer Financial Protection Bureau (CFPB), Colony Ridge is accused of operating an illegal land sales scheme that targeted tens of thousands of Hispanic borrowers with lies and predatory loans.
"Colony Ridge promised the American dream, but we allege that in reality, it has delivered a nightmare for thousands of hardworking Hispanic families,” Assistant Attorney General Kristen Clarke said.
The feds say Colony Ridge also sold flood-prone land that overflows with raw sewage after heavy rains and lacks basic infrastructure.
“Today’s complaint alleges that Colony Ridge targeted Hispanic consumers with predatory loans, misled borrowers about the water, sewer and electrical infrastructure on its lots, and exploited language barriers by conducting most of its marketing in Spanish while offering important transaction documents only in English,” Attorney General Merrick B. Garland said. “Discrimination in lending harms families and neighborhoods for generations; it is wrong and has no place in our country."
The lawsuit alleges that Colony Ridge advertises on TikTok or other social media platforms and uses national flags and regional music from Latin America. They attract buyers with seller financing that requires no credit check and only a small deposit.
Roughly one in four Colony Ridge loans end in foreclosure, and the company then repurchases the properties and sells them to new borrowers, the lawsuit alleges. Records show that Colony Ridge accounted for more than 92% of all foreclosures recorded in Liberty County between 2017 and 2022.
Between 2017 and 2021, interest rates on Colony Ridge’s loans ranged from between 10.9% to 12.9%, according to the Justice Department, while a standard 20-year fixed rate loan averaged 2.35% to 4.05% during the same timeframe.
One resident who didn't want to go on camera told us in Spanish that he pays 12% interest. He and others also confirm that their paperwork was in English.
The complaint seeks to stop Colony Ridge’s alleged unlawful conduct, provide relief for affected consumers and impose a civil penalty payable to the CFPB victims relief fund. If the defendants are found liable, the amount of any restitution will be determined in the litigation in federal court.
We reached out to Colony Ridge for reaction to the lawsuit and CEO John Harris sent us this statement.
“We were blindsided by this lawsuit and we are concerned that the Justice department would pursue this action. The lawsuit is baseless and both outrageous and inflammatory. Our business thrives off customer referrals because landowners are happy and able to experience the American Dream of owning property. We loan to those who have no opportunity to get a loan from anyone else and we are proud of the relationship we have developed with customers. We look forward to telling the true story of Colony Ridge.”
The Department of Justice said anyone who believes they've 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.
Past troubles for Colony Ridge
Gov. Greg Abbott and other Republicans raised concerns about crime in Colony Ridge after rumors circulated that drug cartel members and thousands of undocumented immigrants live there.
After Abbott added it to the agenda during the third special session, lawmakers toured the area.
Republican State Rep. Briscoe Cain said it looks like any other rural area.
"They were very transparent," Cain told us in October. "It’s not what the majority are seeing. Looks like places in East Texas, my family's places in Louisiana."
During the special session Texas DPS Director Steve McCraw and Liberty County Sheriff Bobby Rader denied reports that Colony Ridge is a “no-go zone” for law enforcement.
McCraw testified DPS sent in special agents to do covert operations.
“The numbers were pretty paltry in terms of the impact that we had because we didn’t detect much criminalized activity,” McCraw testified at the special session.
Rader told lawmakers that crime in Colony Ridge is not disproportionately higher than other parts of Liberty County.
“Yes, there are cartel members out there,” the sheriff said. “Have they given us a problem? No, they have not.”
Developer Trey Harris said also denied the claims about undocumented immigrants.
"They make it sound as if I send school buses to Mexico City and pick people up and drive them back here and sell them a piece of land, which is the furthest thing from the truth," Harris said. "I would say that we have undocumented immigrants, but most subdivisions in the Houston area have undocumented immigrants in them."
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