(Reuters) – Federal prosecutors and the top U.S. agency for consumer financial protection are suing a Texas real estate developer they accused of targeting thousands of Hispanic borrowers in a fraudulent land sale scheme, they announced on Wednesday.
The case marks the first-ever predatory lending case brought by the U.S. Department of Justice under the Fair Housing Act and Equal Credit Opportunity Act, Assistant Attorney General for Civil Rights Kristen Clarke told reporters in Washington.
The case was brought jointly with the U.S. Consumer Financial Protection Bureau, which said the case was the agency’s first federal lawsuit charging violations of the Interstate Land Sales Full Disclosure Act.
Colony Ridge, the real estate developer located in Liberty County, Texas about 30 miles (48 km) northeast of Houston, did not immediately respond to a request for comment.
“Colony Ridge promised the American dream, but we allege that in reality, it has delivered a nightmare for thousands of hardworking Hispanic families who hoped to build their homes in the Terrenos Houston community,” she said in a statement.
According to Wednesday’s announcement, federal officials say the company sold unaffordable loans so unsuspecting families could purchase flood-prone land that had no connections to sewage lines or other utilities. After foreclosure, the company then allegedly resold plots to new buyers.
(Reporting by Douglas Gillison; Editing by Aurora Ellis)
