First-Ever Predatory Lending Case Under Fair Housing Act
Federal prosecutors and the top U.S. agency for consumer financial protection have filed a lawsuit against a Texas real estate developer, citing a fraudulent land sale scheme that targeted thousands of Hispanic borrowers. The U.S. Department of Justice is handling the case, which marks the first-ever predatory lending investigation under the Fair Housing Act and Equal Credit Opportunity Act. Assistant Attorney General for Civil Rights, Kristen Clarke, announced the lawsuit and emphasized the significance of the case during a press conference in Washington.
Collaborating with the U.S. Consumer Financial Protection Bureau, this federal lawsuit highlights violations of the Interstate Land Sales Full Disclosure Act, making it the agency’s first-ever case of this nature. Despite receiving a request for comment, Colony Ridge, the real estate developer located in Liberty County, Texas, did not immediately respond.
Promise of the American Dream Turns into Nightmare for Hispanic Families
Making a statement about the case, Assistant Attorney General Kristen Clarke expressed her disappointment: “Colony Ridge promised the American dream, but we allege that in reality, it has delivered a nightmare for thousands of hardworking Hispanic families who hoped to build their homes in the Terrenos Houston community.”
According to federal officials, the company sold loans that were unaffordable, deliberately misleading unsuspecting families, and encouraged them to purchase flood-prone land without access to vital utilities such as sewage lines.
The authorities have announced that Colony Ridge will face legal consequences for their actions, which have led to significant hardships for numerous families. Such cases call into question the integrity of certain real estate developers and highlight the need for stringent regulations to protect potential homebuyers from predatory lending practices.