Colony Ridge Settles Lawsuit with U.S., State of Texas

2/10/2026 – On 2/9/2026, Colony Ridge and its owners settled a lawsuit with the U.S. Consumer Financial Protection Bureau and State of Texas. The 30-page settlement includes:

• Comprehensive reforms of the developer’s sales, marketing, and financing practices
• A three-year moratorium on expansion
• Public safety improvements
• Establishment and enforcement of deed restrictions
• Compliance with consumer protection laws
• $20 million to beef up law enforcement
• A $48 million plan to address deficiences in existing infrastructure.

The latter includes $18 million to address flooding and drainage issues. It also includes $30 million to address other infrastructure needs such as potable water, sewage, roads, and waste management.

The sprawling Colony Ridge in Liberty County grew 50% larger than Manhattan in just 15 years. It was accused of being a foreclosure mill with predatory, deceptive lending practices.

At least nine TCEQ investigations reprimanded Colony Ridge construction practices. The TCEQ even accused Colony Ridge of endangering human life.

In 2023, the entire Texas Republican Congressional Delegation urged Governor Greg Abbott and Attorney General Ken Paxton to investigate Colony Ridge.

I wrote more than 75 posts about the development beginning in 2020. For more background see: History of Heartbreak: A Colony Ridge Chronicle. Below, I’ll summarize the major elements of the settlement.

While this settlement should vastly improve future development, it contains nothing to compensate past victims

Moratorium on Development

In exchange for resolving all the claims against it in 2023 lawsuits by the Department of Justice and State of Texas, Colony Ridge, its owners, employees and all affiliated entities have agreed to a moratorium on development. That means:

• For two years, they will not seek new plats for direct-to-consumer sales.
• After that, they may seek approval of new plats if they require new deed-restricted homes to be built prior to sale.
• Colony Ridge will not seek platting of new subdivisions for three years unless the lots have deed restrictions. Further, newly platted subdivisions will require:
  • Compliance with all county permitting and construction requirements
  • New dwellings to be approved by an architectural control committee.

ILSA and Texas Property Code Compliance

The settlement requires Colony Ridge to comply with the Interstate Land Sales Act and the Texas Property Code. That means requiring purchasers to present:

• An unexpired Texas driver’s license
• A Texas-issued ID card, or
• An unexpired passport and valid visa.

It also requires Colony Ridge to work with law enforcement to confirm buyers are not cartel members or on a terrorism watch list.

Finally, Colony Ridge must confirm that purchasers do not have a prohibited relationship with any ‘designated country’ including China, Russia, Iran, and North Korea. That’s to comply with the Texas Property Code.

Prohibition Against Discrimination

Colony Ridge has agreed to comply with the Equal Credit Opportunity Act for all sales or rentals.

Hire A Compliance Specialist

At its own expense, Colony Ridge must hire a compliance specialist to ensure the owners, their corporate entities and their employees comply with all terms of the settlement.

Increasing Housing Affordability and Availability

Colony Ridge has agreed to reform its underwriting standards by:

• Making sure buyers can repay their loans
• Notifying buyers of ways to avoid default and rescind their sales agreements
• Developing a default-avoidance plan including credit assessments, relief and remission options.
• Addressing harm to borrowers credit, including removing negative credit reports
• Developing a foreclosure policy that meaningfully reduces the number and frequency of foreclosures

Addressing Misrepresentations to Consumers

Colony Ridge has also agreed to truthfully and accurately describe the properties it has for sale and applicable loan terms. It will not advertise that all properties are “move in ready” or currently have “all city services.” The company will add appropriate limiting language or disclaimers to its advertisements.

Colony Ridge has also agreed to disclose loan terms, utility connections, flooding, wetlands, and readiness for use.

The flooding provision requires all plats to receive pre-development drainage and flood-control approval by the appropriate Federal, State, and local authorities.

Colony Ridge must disclose whether property is in the 100-year flood plain. The company must also disclose whether the buyer is responsible for leveling, grading, or otherwise filling the lot to provide proper drainage to culverts.

Re: cost, Colony Ridge must disclose the true total cost of the property to buyers including interest, closing costs, taxes, POA fees, etc. The company must also mail monthly statements.

Infrastructure Improvements

Within three months, Colony Ridge must develop and begin implementing a $48 million infrastructure improvement plan. Its goals: to reduce and prevent flooding, improve roads, provide for proper management of sewage and other waste, and invest in other projects designed to improve the habitability and public safety.

The company must develop a road drainage system capable of handling 10-year rains based on new Atlas 14 data. It must also build a 100-year-storm flood-control system.

The plan must prioritize fixing existing problems before developing new infrastructure.

Settlement Agreement, Page 12

Increased Law Enforcement Presence

The defendants must spend at least $20 million to increase a law enforcement presence in Colony Ridge. That includes building a DPS and County Constable sub-station, funding full-time law enforcement officers, supplying them with vehicles, and ensuring compliance with immigration laws.

Property Owners Association

The Property Owners Association (POA) must report to owners how their dues are expended. Previously, the dues were used to finance new development, not provide services to the people paying the dues.

Training and Complaint Procedures

Colony Ridge must now train its staff on how to comply with federal and state regulations. The company must explain how Colony Ridge previously fell short and also develop a “Nondiscrimination Policy and Complaint Procedure.”

Law Enforcement Support

Colony Ridge must develop a discount program that encourages law-enforcement officers to take up residence there.

Penalties for Non-Compliance

Noncompliance with any of these provisions will land the owners back in court.

Not All Residents Happy

An activist named Maria Acevedo who bought property in Colony Ridge and was victimized by the company’s business practices was unhappy with the settlement. Her concern: It will protect people in the future, but doesn’t provide any compensation to people victimized in the past.

Said Acevedo, “The money used to pay penalties came from the very families who were scammed — it was our money, not Colony Ridge’s. We were victims.”

Another lady, Jennifer Stewart, a Huffman resident who has many friends living in and around Colony Ridge said, “I’m glad a settlement was reached, but the people who were truly harmed have not been made whole. That’s unconscionable.”

Posted by Bob Rehak on 2/10/25

3087 Days since Hurricane Harvey

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.