12/24/25 – The United States District Court for the Southern District of Texas posted notice on 12/19/25 about an agreement in principle to settle pending lawsuits between several Colony Ridge entities, the U.S. Department of Justice Civil Rights Division, and the Consumer Financial Protection Bureau (CFPB).

Parties Working Out Final Details

The parties requested until 12/31/25 to work out all the details, but the judge gave them until 1/6/26. The lawsuit began in 2023. CFPB alleged that Colony Ridge operated a “foreclosure mill” with predatory lending practices. Separately, the Department of Justice (DOJ) alleged that defendants violated the Equal Credit Opportunity Act (ECOA) by targeting consumers of Hispanic origin with a predatory loan product.

DOJ and CFPB contend that the defendants operated an illegal land sales scheme that targeted tens of thousands of Hispanic borrowers with false statements and predatory loans.

Colony Ridge advertised property in Spanish, but allegedly provided closing documents in English to under-qualified or unqualified buyers who didn’t understand them.

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.”

According to the press release at the time…

Flood Connection

The DOJ/CFPB complaints alleged that Colony Ridge employees fail to inform borrowers of flood risk when lots have repeatedly flooded in the past, or falsely tell 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. To see the original lawsuit, click here.

A separate lawsuit filed by Texas Attorney General Ken Paxton may also reportedly be close to settlement.

Together, the lawsuits affect potentially tens of thousands of people.

Why Litigants Often Settle

In general, a settlement that avoids a trial offers a set of well-recognized advantages including:

1. Cost Control and Predictability
   • Reduces legal fees and expenses
   • Limits financial exposure at a known amount
   • Avoids open-ended risk of adverse verdicts with interest, creates budget certainty.
2. Risk Reduction
   • Eliminates uncertain outcomes from juries, judges, evidentiary rulings, and witness credibility
   • Replaces a win/lose outcome with a negotiated result
   • Avoids catastrophic downside, such as runaway verdicts, punitive damages, injunctive relief
   • Limits worst-case scenarios.
3. Time and Resource Efficiency
   • Faster resolution
   • Trials in state and federal courts can run on for years, including appeals
   • Lets organizations reallocate resources to core activities.
4. Confidentiality and Information Control
   • Settlements can include confidentiality provisions, whereas trials produce public records, testimony, and findings
   • Protects sensitive information
   • Avoids public disclosure of internal documents, financial data, trade secrets, or politically sensitive communications.
5. Control Over the Outcome
   • Lets parties shape result rather than delegating the outcome to a judge or jury
   • Can include operational changes, phased payments, land transfers, policy adjustments, or cooperative frameworks that courts may lack authority to impose.
6. Relationship Preservation
   • Reduces adversarial escalation
   • Facilitates future cooperation.
7. Reputational and Political Benefits
   • Lower public exposure; less media coverage and political attention
   • Resolves disputes quietly
   • Avoids adverse precedent or findings.
8. Finality
   • Reduced appeal risk
   • Releases and waivers reduce likelihood of prolonged appeals
   • Closure; parties can move forward without lingering legal uncertainty.
9. Strategic
   • Avoids creating case law that could constrain future actions or invite copy-cat litigation.

Bottom Line

A settlement that avoids trial primarily delivers:

• Lower cost
• Lower risk
• Greater certainty
• Faster resolution
• Greater control
• Reduced public exposure

These advantages explain why the vast majority of civil disputes—reportedly well over 90%—resolve through settlement rather than trial, even when one side believes it has a strong legal case.

Bottom Line for Colony Ridge Activist

Maria Acevedo, a Colony Ridge land purchaser who has struggled for years to draw attention to the development’s sales and development issues, is happy about the potential settlement.

But not because of any money she might get. She said, “This settlement acknowledges the legitimacy of claims that go back years.” Acevedo sees it as vindication. “But it can never fix the damages,” she says. “No amount of money can ever replace the quality of life that was lost.”

While a final settlement has not yet been reached, thousands of Colony Ridge victims will likely see the settlement in a similar light – as a bittersweet Christmas present.

For More Information

For more information about life and loss in Colony Ridge, see a post I wrote called History of Heartbreak. It contains links to more than 75 posts about Colony Ridge. Those posts contain hundreds of photos showing conditions there.

Posted by Bob Rehak on 12/24/25

3039 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.