Quick Answer: The DOJ settled a predatory lending case against Colony Ridge, a Texas land developer, for $68 million — but none of that money goes to the actual victims. The settlement sends $20 million to Liberty County law enforcement and $48 million to infrastructure upgrades. Colony Ridge targeted Hispanic buyers with seller-financed mortgages at high interest rates. A federal judge was scheduled to review the settlement on April 11, 2026. Former DOJ civil rights officials have publicly condemned the deal.
Why I’m covering this: In 30+ years of watching predatory lending, I’ve seen a lot of enforcement actions. This one is unusual — and not in a good way. The government proved a company engaged in predatory lending targeting a vulnerable community, and then structured a settlement where the victims get nothing. That’s worth paying attention to, regardless of where you fall politically.
What Colony Ridge Did
Colony Ridge is a land developer that has sold lots north of Houston since 2011, primarily to Hispanic buyers. According to the DOJ’s case, the company:
- Offered seller-financed mortgages at high interest rates to buyers who couldn’t qualify for conventional loans
- Used false advertising to attract buyers
- Did not adequately assess whether buyers could afford the payments
- Targeted Spanish-speaking buyers through specific marketing channels
The pattern is textbook predatory lending: find people who are locked out of conventional credit, offer them financing on terms that look manageable but aren’t, and profit from the spread between what you paid for the land and what they’ll pay over the life of the loan.
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Where the $68 Million Goes
This is the part that has drawn public criticism:
The settlement does include some non-monetary protections: stricter lending standards going forward, a 2-month opt-out period for new buyers, and a requirement for bilingual communications. But zero dollars flow to the buyers who were harmed by the predatory lending practices.
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The broader pattern: When enforcement agencies settle predatory lending cases without compensating victims, it sends a signal to other predatory lenders that the worst-case scenario is a fine — not making victims whole. Compare this to the CFPB’s Navient settlement, which directed $100 million specifically to affected borrowers.
What to Do If You’re Trapped in a Predatory Mortgage
Whether it’s Colony Ridge or any other predatory lender, here’s what matters if you’re stuck in a mortgage you can’t afford:
- Get a copy of your loan documents. If your mortgage doesn’t comply with state truth-in-lending requirements or has undisclosed fees, you may have legal claims.
- Contact a HUD-approved housing counselor. Free assistance at 1-800-569-4287. They can review your mortgage terms and help you explore modification options.
- Know your state’s foreclosure protections. Texas has specific rules about seller-financed land contracts that differ from traditional mortgages.
- Consult a consumer rights attorney. If your lender engaged in deceptive practices, you may have standing for a private lawsuit even if the government settlement doesn’t compensate you.
If your situation involves multiple debts beyond just the mortgage, do me a favor and talk to Damon Day — he can help you see the full picture before making any decisions.
The Bottom Line
The Colony Ridge settlement is a $68 million deal where predatory lending victims get nothing. The money goes to law enforcement and infrastructure instead. If you’re trapped in a predatory mortgage — from Colony Ridge or anyone else — your best moves are getting your loan documents reviewed by a HUD housing counselor (free, call 1-800-569-4287) and consulting a consumer rights attorney about private legal claims.
FAQ
Can Colony Ridge buyers get money from this settlement?
No. The $68 million settlement does not include any direct compensation to buyers. The money goes to Liberty County law enforcement ($20M) and infrastructure improvements ($48M). Affected buyers may pursue private legal claims separately.
What is seller-financed lending?
Seller financing means the property seller acts as the lender instead of a bank. The buyer makes payments directly to the seller. This arrangement can bypass many consumer protections that apply to bank mortgages, which is why predatory operators use it to target buyers who can’t get conventional loans.
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