- Key insight: Eight civil rights nonprofits have urged a federal court to reject a proposed settlement between the Department of Justice and developer Colony Ridge, arguing an immigration enforcement clause in the settlement is "unlawful."
- What's at stake: The underlying lawsuit targeted a "foreclosure mill" that sold undeveloped, flood-prone land to Hispanic buyers at 10% to 12% interest rates.
- Supporting data: The civil rights groups slammed the settlement for offering zero direct restitution to thousands of borrowers, instead funneling $20 million to immigration enforcement.
Civil rights groups have asked a federal court to reject a proposed
On Monday, eight civil rights and fair housing groups
The nonprofits, led by the National Fair Housing Alliance, asked the court to deny the plaintiffs' motion to dismiss the case with prejudice, and to "independently assess the reasonableness" of the settlement. The brief, filed in the U.S. District Court for the Southern District of Texas, alleges the settlement is improper, fails to provide meaningful relief to the victims and could subject borrowers to heightened surveillance, detention, family separation, or deportation.
Last week, the DOJ and Texas' Attorney General
Under the deal with the DOJ, Colony Ridge agreed to pay $48 million to improve infrastructure, particularly flood control measures. But no money was earmarked for harmed borrowers and, in an unusual twist, the DOJ required that the private developer pay $20 million to fund two police officers, build a law enforcement facility and create a "peace officer" residency program.
Some legal experts said there was a disconnect between the initial lawsuits challenging Colony Ridge's predatory land sales and financing, and the overarching terms of the settlement, coming from the DOJ's civil rights division, that focused on policing and stopping illegal immigration.
The nonprofits argue that the settlement fails to address Colony Ridge's discriminatory practices and instead leaves victims high and dry. The groups argue that the settlement terms do not arise from the pleaded case and fail to further the objectives of the Fair Housing Act and Equal Credit Opportunity Act, upon which the charges in the case are based. The settlement, they claim, fails to address the developer's alleged predatory and discriminatory practices and marketing of seller-financed mortgages that had exorbitant interest rates, misleading terms, and resulted in high foreclosure rates.
The groups urged the district court to reject the motion to dismiss the case with prejudice or to strike a so-called immigration enforcement funding clause. That clause, the groups claim, "is intended to support 'additional delegated immigration enforcement authority from the federal government' in the [development's] subdivisions, construction of a law enforcement sub-station, financial support of two officers to patrol the development, and law enforcement equipment."
"The Clause is unrelated to the facts and legal claims alleged and is an insult to the vulnerable community that was targeted by this predatory scheme," the groups stated. "The Agreement as a whole does not provide relief appropriate for the injuries alleged. Instead, the Clause appears intended to subject them to heightened surveillance, and, for some, could subject them to potential detention, family separation, or even deportation — prioritizing the Government's unrelated political priorities over the victims' interests."
The eight nonprofits include the National Consumer Law Center, UnidosUS, Public Justice, Center for Responsible Lending, Poverty and Race Research Action Council, Southern Poverty Law Center, and League of United Latin American Citizens.
