Colony Ridge Foreclosure Notices Appear to Routinely Ignore Texas Law

The controversial Colony Ridge development in Liberty county, which targets Hispanics and which has been labeled a “foreclosure mill” by Texas Attorney General Ken Paxton, appears to routinely ignore Texas law when sending out foreclosure notices.

Section 51.0075 (e) of the Texas Property Code requires that “the name and a street address for a trustee or substitute trustees shall be disclosed on the notice required by Section 51.002 (b).” But all sampled Colony Ridge foreclosure notices do not include the trustee’s street address.

Nor do they include the location of foreclosure sales, which state law also requires.

These and other irregularities may explain why Paxton found the foreclosure rate in Colony Ridge is 50 times the national average.

They also could theoretically invalidate thousands of foreclosures, according to sources consulted for this post.

Colony Ridge Foreclosure Notices Contain No Street Address for Trustee

A random sampling of foreclosure notices for Liberty County properties outside of Colony Ridge shows that all trustees have complied with the street address provision.

However, a second sampling of foreclosure notices on properties inside Colony Ridge shows that none of the 58 notices contains a street address for the trustee. Instead, they include only a Post Office Box number.

In Texas, a “street address” includes the name and number of a building, along with the street or road it’s located on. It’s needed for driver’s licenses and other official documents, such as foreclosure notices.

According to ChatGPT, in Texas, foreclosure notices must include the street address of the trustee or substitute trustee to ensure transparency and accessibility for borrowers and interested parties. This requirement serves several key purposes. It:

1. Prevents Fraud and Confusion – Clearly identifying the trustee’s location reduces the risk of fraudulent or misleading foreclosure practices by ensuring that the foreclosure is managed by a verifiable, accessible entity.
2. Facilitates Communication – The trustee is responsible for conducting the foreclosure sale, so providing a physical address allows borrowers, lienholders, and other interested parties to contact them for inquiries, legal matters, or foreclosure-related issues.
3. Ensures Proper Notice – Texas law mandates that foreclosure procedures follow due process, which includes proper notice to homeowners. Listing the trustee’s address helps ensure that homeowners know where to send requests for information, reinstatement payments, or legal disputes.
4. Complies with Texas Property Code – Texas law, including Section 51.0075 (e) of the Texas Property Code, sets strict requirements for foreclosure notices. The inclusion of a trustee’s street address aligns with these legal requirements, helping to protect both lenders and borrowers.

Location of Foreclosure Sale Also Omitted

Texas law also requires that foreclosure notices include the location of the foreclosure sale itself.

Properties outside of Colony Ridge list this information. However, all 58 of these Colony Ridge foreclosure notices only say, “At a place designated by the Commissioner’s Court of Liberty County, Texas.”

People from south of the border may not know the customary location of such sales – at county courthouses. That makes it difficult for non-English speakers to figure out where to go if they want to bid on their property. It also increases the likelihood that foreclosures will sale through uncontested.

Finally, it helps explain why investigative journalist Wayne Dolcefino found that Colony Ridge successfully repurchased all properties in a foreclosure sale around Thanksgiving, 2020. In the first 11 months that year, the developer foreclosed on approximately 2,900 properties out of 22,956 that reportedly existed in the development at that time – 13% in less than a year.

Today, the development is at least 50% larger than Manhattan. So, the number of foreclosures each year since 2020 has likely increased.

Contested Foreclosures Possible And Other Implications

Failure to disclose such information could potentially invalidate a foreclosure sale if challenged in court. Texas foreclosure law is strict about proper notice requirements, and any defect in the notice could give borrowers grounds to contest the foreclosure. Here’s why:

1. Strict Compliance Required

• Texas courts have ruled that failure to strictly follow foreclosure notice requirements can be grounds to invalidate a sale.
• If the foreclosure has already occurred, a borrower could challenge it and request that the court void the sale due to non-compliance.

2. Violation of Texas Property Code

• Under Texas Property Code § 51.002(b), a foreclosure notice must include key information, including the date, time, location of the sale, and the name and street address of the trustee.
• If this information is missing or incorrect, the notice might not meet statutory requirements, making the foreclosure legally defective.

3. Borrower’s Right to Challenge the Foreclosure

• If a borrower can show that the missing trustee address caused harm or confusion, they may file a lawsuit to halt or reverse the foreclosure.
• A court could issue a temporary restraining order (TRO) or injunction, delaying the foreclosure until the notice is corrected.

4. Lender May Have to Restart the Process

• If a court finds that the notice was defective, the lender may have to start the foreclosure process over, sending a corrected notice and waiting the required 21-day period before conducting a new sale.

5. Trustee and Lender Liability

• A defective notice could also expose the trustee and lender to legal claims, including wrongful foreclosure or violations of Texas consumer protection laws.

Bottom Line

According to one lawyer consulted for this post, missing addresses for the trustee and/or sale location represent serious defects that could invalidate a Texas foreclosure if properly challenged. If you or someone you know face foreclosure and notices are an issue, consulting a real estate attorney to explore your legal options may help.

Posted by Bob Rehak on 2/12/2025

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The thoughts expressed in this post represent opinions on matters of public concern and safety. They are protected by the First Amendment of the US Constitution and the Anti-SLAPP Statute of the Great State of Texas.