12/20/23 – Legal woes are mounting for Colony Ridge. Today, the U.S. Department of Justice (DOJ) and the Consumer Financial Protection Bureau (CFPB) filed suit against the controversial Liberty County developer and the companies they own or control.
The government filed a complaint against land development companies Colony Ridge Development, LLC and Colony Ridge BV, LLC, affiliate mortgage company Colony Ridge Land, LLC (collectively, the Colony Ridge defendants), and loan origination company Loan Originator Services, LLC.
The Bureau and DOJ allege that defendants violated the Equal Credit Opportunity Act (ECOA) by targeting consumers of Hispanic origin with a predatory loan product.
The Colony Ridge defendants violated the Consumer Financial Protection Act of 2010 (CFPA) by making deceptive representations to consumers.
Colony Ridge Development and Colony Ridge BV violated the Interstate Land Sales Full Disclosure Act (ILSA) by making untrue statements, omitting material facts, failing to provide required accurate translations, and failing to report and disclose required information.
Defendants violated the CFPA by virtue of their violations of ECOA and ILSA, respectively.
Defendants’ conduct violated the Fair Housing Act.
Goal of Lawsuit
The joint complaint seeks, among other things, injunctions against defendants to prevent future violations of Federal consumer financial laws, redress to consumers, damages, and the imposition of civil money penalties.
DOJ and CFPB contend that the defendants operated an illegal land sales scheme and targeted tens of thousands of Hispanic borrowers with false statements and predatory loans.
Revolving Door Foreclosures that Targeted Hispanics
The joint DOJ/CFPB press release said that Colony Ridge “sells unsuspecting families flood-prone land without water, sewer, or electrical infrastructure, and that the company sets borrowers up to fail with loans they cannot afford. Roughly 1-in-4 Colony Ridge loans ends in foreclosure, after which the company repurchases the properties and sells them to new borrowers.” It amounted, say the plaintiffs to a “set-up-to-fail scheme that has led thousands of families to lose their dreams of homeownership.”
CFPB Director Rohit Chopra said, “Our investigation uncovered that Colony Ridge is baiting borrowers with lies, saddling families with predatory loans for homesites that the company knows have repeatedly flooded with raw sewage and lacked basic utility infrastructure.”
Merrick B. Garland, U.S. Attorney General said, ““Today’s complaint alleges that Colony Ridge targeted Hispanic consumers with predatory loans, misled borrowers about the water, sewer, and electrical infrastructure on its lots, and exploited language barriers by conducting most of its marketing in Spanish while offering important transaction documents only in English.”
Foreclosure and property deed records from September 2019 through September 2022 show that Colony Ridge initiated foreclosures on at least 30% of seller-financed lots within just three years of the purchase date, with most loan failures occurring even sooner.
“Records also confirm that Colony Ridge accounted for more than 92% of all foreclosures recorded in Liberty County between 2017 and 2022.”
CFPB/DOJ Joint Press Release
The Entire Laundry List
The complaint cites a number of specific practices. It alleges that Colony Ridge:
Misleads borrowers about infrastructure on the lots it sells: Colony Ridge has falsely represented that lots in the Terrenos Houston subdivisions were sold with water, sewer, and electrical infrastructure already in place. ” It is only after applicants pay a non-refundable deposit that Colony Ridge discloses the properties may not provide those services and makes that disclosure only in English.”
Sells lots that flood with rain and raw sewage. The complaint alleges that Colony Ridge employees fail to inform borrowers of flood risk when lots have repeatedly flooded in the past, or falsely tells them the lots have not flooded. In fact, in parts of the subdivision, rain causes significant flooding, causing raw sewage to run through or around borrowers’ property, and damaging their personal belongings
Churns through borrowers in a cycle of foreclosure: When families fall behind on payments and enter foreclosure, it allows Colony Ridge to “flip” the properties by repurchasing and reselling them, often at higher prices. Foreclosure and property deed records show that Colony Ridge flipped at least 40% of all the properties it sold between September 2019 and September 2022, selling approximately 8,237 properties twice, 3,267 properties three times, and 2,067 properties four or more times in three years.
Targets Hispanic consumers with predatory loans: Through direct-to-consumer marketing on websites, social media engagement, and telemarketing, Colony Ridge targets Hispanic consumers. Colony Ridge then exploits language barriers during its sales process and uses high-pressure sales tactics to push borrowers to obtain their loan products quickly. The loans have exorbitant interest rates. Between 2017 and 2021, interest rates on Colony Ridge’s loans ranged from between 10.9% to 12.9%, while a standard 20-year fixed rate loan averaged 2.35% to 4.05% during the same timeframe. And in extending the loan, Colony Ridge and Loan Originator Services did not collect information needed to determine if applicants can afford the loan.
Exploits language barriers at borrowers’ expense: While Colony Ridge conducts most of its marketing activities in Spanish, when it comes to the actual transaction, it offers important documents only in English. Failing to offer borrowers accurate translations of contracts, deeds, and other documents in the language in which it conducts the sales and exploiting borrowers’ limited English proficiency violates federal law.
Nine stories since 2020 by investigative reporter Wayne Dolcefino about various aspects of Colony Ridge.
A story in Houston Landing about revolving door foreclosures. A team of reporters found that Colony Ridge sold over 35,000 properties. Nearly half (15,759 properties) ended up back in its hands. Some of the properties had as many as 9 different owners in the last decade.
A Daily Wire story exposing alleged corruption between Colony Ridge insiders and a municipal management district. The municipal management district, run by one of the developers, granted nearly $20 million in contracts to companies controlled by other family members and insiders.
Precinct 3 Commissioner Tom Ramsey brought many of the drainage issues in front of Harris County Commissioners Court last October. No action has yet been taken at the county level.
Posted by Bob Rehak on 12/20/23
2304 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.
https://i0.wp.com/reduceflooding.com/wp-content/uploads/2020/12/20201207-Aerial-Dec-2020_1210.jpg?fit=1200%2C813&ssl=18131200adminadmin2023-12-20 17:55:232023-12-20 18:24:45DOJ, CFPB Sue Colony Ridge for Bait-and-Switch, Predatory Lending, More
A new study of “climate migration” by the First Street Foundation looks at how flood-risk information affects real-estate sales. It found that the availability of high-resolution data affects home buying, sometimes in surprising ways.
The foundation’s mission is to make climate-risk data accessible, easy to understand and actionable for individuals, governments, and industry. It estimates different types of climate risk from flooding to fire, wind, drought and more – from the state to the county, zip code and street-address levels.
First Street’s most recent study is called “Climate Abandonment Areas.” But most of the important findings have to do with flooding. First Street published the study in the journal Nature-Communications on December 18, 2023.
Cover photo from First Street Foundation Climate Abandonment Areas Study.No credit listed.
Key Findings
Among First Street’s key findings:
Flood risk is a house-by-house issue, not a state-by-state issue. People may still move to states with high flood risk, but increasingly they’re using flood data to avoid risky neighborhoods and properties.
In the U.S., 34.5% of the population and 41.9% of the housing stock have been impacted by flooding.
Nationally, 7.4% of census blocks are beginning to lose population because of flood risk. Within them, 3.2 million people (35.5% of the decline) moved away because of flooding between 2000 and 2020.
Dr. Jeremy Porter, Head of Climate Implications Research at First Street, said “the downstream implications of this are massive and impact property values, neighborhood composition, and commercial viability both positively and negatively.”
As people leave to avoid flood risk, property values decline, affecting cities’ tax bases. Further, the population left behind tends to be older and poorer.
The study defines 9% of the census blocks in Harris County as “Climate Abandonment Areas.” It further claims Houston has passed a tipping point where more people are moving out than in, it says, because of flood risk.
Many areas have “pull factors” such as jobs that offset the number of people leaving. But their growth would be even higher if flood risk were lower. Said another way, areas with high flood risk grow more slowly if they grow at all.
Population losses are greatest among areas that flood frequently, i.e., a 5-year flood risk.
High-resolution information about flooding progressively reduced consideration of homes with high risk by 24.6% after 9-weeks of study.
Confusing Definitions, Frames of Reference
While this purports to be a study about how “climate change” affects “climate migration,” the numerous counter-intuitive climate-change references constantly obscure the findings.
For instance, the authors start out talking about wildfires, severe storms, flooding, drought, tropical storms and winter storms. But then they talk primarily about flooding in relation to people moving a matter of city blocks.
As a consequence, it gets confusing. “It appears that they are trying to fit a trend to the climate change agenda,” said one of the leading hydrologists in Texas.
One must read carefully to determine the frame of reference for each claim.
Good News, Bad News
The good news is that First Street data shows people seem to be paying more attention to flood risk when they purchase homes – assuming that good data is available.
The bad news is that good flood-risk data is often not available. Across our region, for instance, many areas remain unstudied. And recent data often remains unreported, i.e., in Harris County.
In the meantime, developers continue to build in floodplains. And new developments often don’t yet have listed addresses. So it’s hard to for homebuyers to estimate risk – even when using First Street’s models.
The hydrologist mentioned above felt First Street overcomplicated the issue. “This isn’t about climate change; it is about common sense. People built in places they shouldn’t have built decades ago and after enough disasters, people have had enough. They are moving. Floods have happened since the dawn of time and certainly before ‘climate change.’ Common sense tells you that people move when they have been hit hard and often enough.”
Posted by Bob Rehak on 12/19/2023
2303 Days since Hurricane Harvey
https://i0.wp.com/reduceflooding.com/wp-content/uploads/2023/12/20231219-Screenshot-2023-12-19-at-4.52.33%E2%80%AFPM.jpg?fit=1100%2C681&ssl=16811100adminadmin2023-12-19 18:36:582023-12-19 18:53:12How Flood-Risk Information Affects Real-Estate Sales
According to a December 15 press release by the Texas Water Development Board, Phase 1 of Houston’s new Northeast Water Purification Plant expansion is nearing completion. Phase 1 will supply 80 million gallons per day of treated surface water to the residents of Harris County, Fort Bend County and City of Houston.
Two more phases remain. Phase 2A will deliver another 80 million gallons per day to the same areas. Phase 2B will deliver 160. So the entire complex, when complete, will deliver another 320 million gallons a day. That’s in addition to the 80 million gallons per day the original plant delivered before expansion.
Goals of Plant
The Texas Water Development Board provided $1.9 billion for the Northeast Water Purification Plant expansion project, making it one of the largest in the country.
The plant has two goals:
Provide water for a population that increases by almost a million people per decade.
Reduce groundwater usage and subsidence.
Completion Estimated in 2025
The TWDB did not provide a date for expected completion of the next two phases, but at a May 2023 community meeting, project managers estimated a completion date in 2025.
Artist’s rendering of completed project, looking NNW. Expansion area outlined in orange.Satellite photo from May with substantially complete phase outlined in red.Phase 1 in center of plant now substantially completed. Original plant is on far right.Photographed in August 2023.Phases 2A and 2B still under construction. Photographed in August 2023.Looking south.Entire plant. Looking east across older area toward new construction. Lake Houston at top of frame.Plant’s new Intake Facility.Those twin pipelines are big enough to drive pickup trucks through.
The Luce Interbasin Transfer Project is associated with the expansion of the treatment plant. The channel from the Trinity River will ensure a steady supply of water in Lake Houston as Montgomery County’s growth demands more water from Lake Conroe.
DOJ, CFPB Sue Colony Ridge for Bait-and-Switch, Predatory Lending, More
12/20/23 – Legal woes are mounting for Colony Ridge. Today, the U.S. Department of Justice (DOJ) and the Consumer Financial Protection Bureau (CFPB) filed suit against the controversial Liberty County developer and the companies they own or control.
The government filed a complaint against land development companies Colony Ridge Development, LLC and Colony Ridge BV, LLC, affiliate mortgage company Colony Ridge Land, LLC (collectively, the Colony Ridge defendants), and loan origination company Loan Originator Services, LLC.
Additional Allegations in Lawsuit
The CFPB separately alleges that:
Goal of Lawsuit
The joint complaint seeks, among other things, injunctions against defendants to prevent future violations of Federal consumer financial laws, redress to consumers, damages, and the imposition of civil money penalties.
DOJ and CFPB contend that the defendants operated an illegal land sales scheme and targeted tens of thousands of Hispanic borrowers with false statements and predatory loans.
Revolving Door Foreclosures that Targeted Hispanics
The joint DOJ/CFPB press release said that Colony Ridge “sells unsuspecting families flood-prone land without water, sewer, or electrical infrastructure, and that the company sets borrowers up to fail with loans they cannot afford. Roughly 1-in-4 Colony Ridge loans ends in foreclosure, after which the company repurchases the properties and sells them to new borrowers.” It amounted, say the plaintiffs to a “set-up-to-fail scheme that has led thousands of families to lose their dreams of homeownership.”
Bait-and-Switch Allegations
CFPB Director Rohit Chopra said, “Our investigation uncovered that Colony Ridge is baiting borrowers with lies, saddling families with predatory loans for homesites that the company knows have repeatedly flooded with raw sewage and lacked basic utility infrastructure.”
Merrick B. Garland, U.S. Attorney General said, ““Today’s complaint alleges that Colony Ridge targeted Hispanic consumers with predatory loans, misled borrowers about the water, sewer, and electrical infrastructure on its lots, and exploited language barriers by conducting most of its marketing in Spanish while offering important transaction documents only in English.”
Foreclosure and property deed records from September 2019 through September 2022 show that Colony Ridge initiated foreclosures on at least 30% of seller-financed lots within just three years of the purchase date, with most loan failures occurring even sooner.
The Entire Laundry List
The complaint cites a number of specific practices. It alleges that Colony Ridge:
To see all 45 pages of the lawsuit, click here.
Could More Lawsuits Follow?
Today’s lawsuit follows courageous investigations by a number of news outlets and Texas Attorney General Ken Paxton. They include:
Precinct 3 Commissioner Tom Ramsey brought many of the drainage issues in front of Harris County Commissioners Court last October. No action has yet been taken at the county level.
Posted by Bob Rehak on 12/20/23
2304 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.
How Flood-Risk Information Affects Real-Estate Sales
A new study of “climate migration” by the First Street Foundation looks at how flood-risk information affects real-estate sales. It found that the availability of high-resolution data affects home buying, sometimes in surprising ways.
The foundation’s mission is to make climate-risk data accessible, easy to understand and actionable for individuals, governments, and industry. It estimates different types of climate risk from flooding to fire, wind, drought and more – from the state to the county, zip code and street-address levels.
First Street’s most recent study is called “Climate Abandonment Areas.” But most of the important findings have to do with flooding. First Street published the study in the journal Nature-Communications on December 18, 2023.
Key Findings
Among First Street’s key findings:
Confusing Definitions, Frames of Reference
While this purports to be a study about how “climate change” affects “climate migration,” the numerous counter-intuitive climate-change references constantly obscure the findings.
For instance, the authors start out talking about wildfires, severe storms, flooding, drought, tropical storms and winter storms. But then they talk primarily about flooding in relation to people moving a matter of city blocks.
As a consequence, it gets confusing. “It appears that they are trying to fit a trend to the climate change agenda,” said one of the leading hydrologists in Texas.
One must read carefully to determine the frame of reference for each claim.
Good News, Bad News
The good news is that First Street data shows people seem to be paying more attention to flood risk when they purchase homes – assuming that good data is available.
The bad news is that good flood-risk data is often not available. Across our region, for instance, many areas remain unstudied. And recent data often remains unreported, i.e., in Harris County.
In the meantime, developers continue to build in floodplains. And new developments often don’t yet have listed addresses. So it’s hard to for homebuyers to estimate risk – even when using First Street’s models.
The hydrologist mentioned above felt First Street overcomplicated the issue. “This isn’t about climate change; it is about common sense. People built in places they shouldn’t have built decades ago and after enough disasters, people have had enough. They are moving. Floods have happened since the dawn of time and certainly before ‘climate change.’ Common sense tells you that people move when they have been hit hard and often enough.”
Posted by Bob Rehak on 12/19/2023
2303 Days since Hurricane Harvey
Phase 1 of Northeast Water Purification Plant Expansion Nears Completion
According to a December 15 press release by the Texas Water Development Board, Phase 1 of Houston’s new Northeast Water Purification Plant expansion is nearing completion. Phase 1 will supply 80 million gallons per day of treated surface water to the residents of Harris County, Fort Bend County and City of Houston.
Two more phases remain. Phase 2A will deliver another 80 million gallons per day to the same areas. Phase 2B will deliver 160. So the entire complex, when complete, will deliver another 320 million gallons a day. That’s in addition to the 80 million gallons per day the original plant delivered before expansion.
Goals of Plant
The Texas Water Development Board provided $1.9 billion for the Northeast Water Purification Plant expansion project, making it one of the largest in the country.
The plant has two goals:
Completion Estimated in 2025
The TWDB did not provide a date for expected completion of the next two phases, but at a May 2023 community meeting, project managers estimated a completion date in 2025.
The Luce Interbasin Transfer Project is associated with the expansion of the treatment plant. The channel from the Trinity River will ensure a steady supply of water in Lake Houston as Montgomery County’s growth demands more water from Lake Conroe.
Reducing subsidence is paramount for the region. Subsidence has been linked to flooding. In fact, a whole subdivision on Galveston Bay in Baytown became uninhabitable before the State created the Harris Galveston Subsidence District.
Here’s its story.
Posted By Bob Rehak on 12/18/23
2302 Days since Hurricane Harvey