AUSTIN, Texas — Texas Attorney General Ken Paxton is suing a controversial residential development outside of Houston that has been the focus of national attention.
This lawsuit comes after U.S. House members called on Paxton to investigate Colony Ridge back in October. The massive development in northeast Houston is home to more than 40,000, and it is nearly the size of Washington D.C.
Paxton’s suit alleges that the Colony Ridge developer has made “numerous false, misleading, and deceptive sales, marketing and lending practices that enabled their business model,” according to a news release from the Office of the Attorney General.
"Colony Ridge's business model is predicated on churning land purchasers through a foreclosure mill," the suit says. "Namely, Colony Ridge targets foreign born and Hispanic consumers with limited or no access to credit with promises of cheap, ready to build land and finance without proof of income."
This is not the first lawsuit the massive northeast Houston development has faced.
Back in December, the Justice Department filed a predatory lending case against the developer accusing it of luring ten of thousands of Hispanic home buyers into buying its properties and providing loans with high interest rates they can’t repay.
The federal government’s lawsuit also alleged that Colony Ridge exploited home buyers’ limited English proficiency and that many of the lots didn’t have basic utilities.
Paxton’s suit also mentions a lack of infrastructure at Colony Ridge, saying that after buyers found no access to sewer, water or electrical utilities at the properties.
“Colony Ridge then forecloses on the buyer, re-possesses the land having lost nothing, and then turns around and sells the same land again to another unsuspecting buyer with the same deceptive set of misrepresentations," the suit says. "At best, consumers struggle with unexpected financial burdens for years to avoid foreclosure, to the benefit of Colony Ridge and its pernicious business model."
The foreclosure rate at Colony Ridge is 50 times higher than the national average, according to data from ATTOM.
Colony Ridge has been in the spotlight a fair amount over the past few months, with far-right Republicans claiming it’s harboring undocumented immigrants. Paxton parroted those claims in a news release saying the development is “attracting and enabling illegal alien settlement in the state of Texas.”
Colony Ridge CEO John Harris testified before the Texas House in October, saying most of the homeowners in his development are from Harris County, but he does not know how many of them have legal status.
“We don’t know how many illegal immigrants are there,” Harris said. “We assume there are some, because I assume there are some in every neighborhood. But, just like every bank that I know of in Texas, we don’t ask status when we’re doing loans.”
Paxton also said that former employees of Colony Ridge said they were told to avoid selling to customers who could speak English or “did not appear to be of Latino or Hispanic heritage.”
“Colony Ridge has been flagrantly violating Texas law. The development profited from targeting consumers with fraudulent claims and predatory lending practices” said Paxton in the release. “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.”