DOJ implements $68M Colony Ridge settlement without court approval after judge rejects deal

In December 2023 the Justice Department and the Consumer Financial Protection Bureau sued Colony Ridge, a massive land development north of Houston, alleging the developer deceived tens of thousands of Hispanic consumers — many of them immigrants — into high-interest, seller-financed loans on undeveloped lots, then profited by foreclosing when buyers could not pay. In February 2026 the department announced a $68 million settlement of the federal case and a parallel Texas suit. The agreement contained no restitution for the defrauded buyers; instead it earmarked more than $20 million for policing and immigration enforcement in and around the development, a provision DOJ said originated with Texas Attorney General Ken Paxton's office.

At an April 10 hearing, U.S. District Judge Alfred H. Bennett refused to sign off, repeatedly asking why a predatory-lending settlement provided no money for victims and funded law enforcement instead. An analysis by ProPublica and The Texas Tribune found that of 183 DOJ housing and civil-enforcement settlements since 2018, only 6% lacked victim compensation and none funded police or immigration enforcement; Bennett said such a provision had never appeared in a predatory-lending case. When the judge offered revisions to win his approval, Colony Ridge's attorney said the developer would consider them — but DOJ senior prosecutor Varda Hussain said the department was not interested.

Rather than amend the deal, the Justice Department invoked a statutory provision allowing it to settle without judicial approval: it voluntarily dismissed the case with prejudice and signed an out-of-court agreement with the developer. The result, former DOJ civil-rights officials said, is a settlement no court will supervise and claims the government can never refile — a "get out of jail free card" in which the largely Hispanic, immigrant victims receive nothing while $20 million flows to the immigration-enforcement apparatus most likely to target their own community.