A proposed settlement of a Texas property scam lawsuit would divert $20 million from Hispanic victims of the scheme to immigration enforcement in the very community where consumers were swindled.
In response, a coalition of immigration advocacy, civil rights and fair housing groups filed an amicus brief March 3 urging a federal court in Houston to reject the agreement submitted by the U.S. Justice Department in Consumer Financial Protection Bureau et al. v. Colony Ridge Development LLC.
The suit accused a group of Houston lenders and developers of targeting Hispanic consumers with predatory lending practices and inadequate infrastructure improvements that resulted in numerous foreclosures and violations of the Fair Housing Act, the Equal Credit Opportunity Act and other laws.
If approved, much of the $68 million agreement would be used for infrastructure improvements, expanding affordable housing initiatives and making infrastructure improvements. But $20 million would be used for immigration enforcement by increasing “the law enforcement presence and effectiveness” in the Hispanic neighborhoods.
The wording of the DOJ statement blends language about the importance of fair housing with Trump administration rhetoric related to its ongoing mass deportation efforts.
“This DOJ will go after all lenders, financiers and land developers who participate in schemes which ultimately encourage illegal immigration,” Assistant Attorney General Harmeet K. Dhillon said. “The changes required by this settlement will promote public safety, and affordable and sustainable homeownership in America, key priorities of this administration.”
But that makes the deal meaningless for the consumers who were defrauded, according to the brief submitted to the U.S. District Court for the Southern District of Texas by Democracy Forward and the National Fair Housing Alliance.
“In other words, instead of providing individual relief to the victims of defendants’ predatory scheme, the settlement agreement appears intended to subject them to heightened surveillance and, for some, could subject them to potential detention, family separation or even deportation.”
The proposed settlement would allow defendants to increase the cost of parcels to offset the $48 million they are required to set aside for infrastructure improvements, the brief adds. “Critically, those funds (or any of the terms of the agreement, for that matter) do nothing for those who have lost their lots and financial investments to foreclosure.”
The pending agreement thus represents another form of discrimination, said Lisa Rice, president of the National Fair Housing Alliance.
“When Latino families are targeted for predatory homeownership schemes, are concentrated in poorly resourced neighborhoods and lose their hard‑earned savings, justice requires more than infrastructure upgrades,” she said. “It requires restitution. It requires accountability. And it requires a clear message that discrimination will not be tolerated.”
Mitria Spotser, vice president and federal policy director at the Center for Responsible Lending, added that the immigration enforcement aspect of the agreement adds insult to injury for Hispanic consumers abused in the scam.
“Rather than holding this developer accountable for its mortgage discrimination scheme, the CFPB (Consumer Financial Protection Bureau) and DOJ propose to rub salt in the wounds of these and future borrowers by steering the settlement money to immigration authorities to presumably aid their detention and removal efforts.”