Colony Ridge settlement faces court challenge in Texas

"Instead of providing individual relief to the victims of Defendants' predatory scheme, the settlement agreement appears intended to subject them to heightened surveillance, and, for some, could subject them to potential detention, family separation, or even deportation."

"In their filing, the groups argue that asking the court to retain jurisdiction to enforce the agreement is improper and unlawful because the immigration and law enforcement provisions are unrelated to the underlying fair lending claims."

"Federal agencies alleged that Colony Ridge used misleading sales tactics including misrepresentations about flooding risks and failed to verify borrowers' ability to repay, contributing to elevated foreclosure rates among Hispanic borrowers in Texas."

The Department of Justice and Consumer Financial Protection Bureau sued Colony Ridge for operating an illegal land sales scheme targeting Hispanic borrowers in Texas, violating fair lending laws. The settlement agreement includes provisions for heightened surveillance and potential immigration enforcement actions against victims. A coalition of civil rights organizations, including the National Fair Housing Alliance, filed an amicus brief opposing the settlement, arguing that immigration and law enforcement provisions are unrelated to fair lending claims and improper for court enforcement. The groups contend the agreement subjects victims to potential detention, family separation, or deportation rather than providing individual relief. Federal agencies alleged Colony Ridge used misleading tactics, misrepresented flooding risks, and failed to verify borrowers' ability to repay.

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