Homeowners Fight Foreclosure Fees Added to Mortgage

Zacarias Cabrera has been fighting different banks for 10 years to save his home from foreclosure.

"It's sad because humans should not be living like that," said Cabrera. "We used to have all our most important things packed in a suitcase, so when the sheriff comes to tell us to get out of the house, we just grab and leave."

Now he's leading a class action effort against the banks over the fees he says he was charged.

Cabrera says his financial trouble started in 2008 when his mom was diagnosed with terminal cancer and he had to miss work to visit her.

"It was my time to take care of my mom," said Cabrera.

He says the bank tried to foreclose on his home after refusing to give him a loan modification plan.

He says the bank asked to dismiss the case.

"I was just jumping up and down," he said.

But Cabrera's joy didn't last—the bank tried to foreclose again three years later. But again the bank asked to dismiss the case.

Again he celebrated what he considered a victory.

"Wonderful! But I still have another problem," said Cabrera.

The problem was a friend noticed something odd on his mortgage statements—his monthly balance was higher. They believe because the bank's attorney fees were added to the balance.

"She kept telling me, they're charging you for things that they're not allowed to charge you. They haven't won anything," said Cabrera.

Cabrera is now facing a third foreclosure. But he's countersuing for the attorney fees he says were added to his loan amount.

"Under Florida law you have to win the lawsuit before you can have a court award for your attorney's fees and costs," said Geoff Stahl, Cabrera's attorney. "Kind of a basic thing. In these cases, there has not been a winning party. The bank has not won, yet they've assessed the attorneys' fees and costs onto the borrower anyway."

Stahl and his partners in this legal action, including Miami's Jon Herskowitz, call it a violation of Florida's Consumer Collection Practices Act –enforcing a debt the banks know aren't legitimate.

"I think 100 percent it's happening to other people," said Herskowitz.

He says a similar thing happened to his client, Maria Gonzalez, 89.

"It was insult to injury with her," said Herskowitz.

The bank tried to foreclose on Gonzalez twice—once accusing her of not living in the only place she's called home for years. That's a requirement of her reverse mortgage.

The bank dropped both foreclosure cases and the court ordered them to pay her attorney fees. Her attorney says that was done but then those fees were added to her mortgage.

"It's an institution taking advantage of an elderly citizen," said Herskowitz.

"I don't have anything but my home," Gonzalez told us in Spanish.

She has filed a separate suit against the bank.

As for Cabrera, he hopes he can help stop banks from adding these fees and adding financial stress to homeowners like him.

"It's like you have a cloud. And that cloud never goes away. It doesn't matter how shiny everything is around you. Everybody got a little piece of sunshine. That cloud stays on you," said Cabrera.

The attorneys say if you had a foreclosure action that was dismissed by the bank but then start getting fees with names like "corporate advances," it may be happening to you too.

There are numerous banks involved in the two cases. We reached out to all – they either wouldn't comment on pending litigation or denied that they tried to collect "wrongfully assessed attorneys' fees."

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