Timothy Y. Fong focuses his practice on foreclosure defense, real estate and consumer bankruptcy.  

He has extensive experience in foreclosure litigation, representing homeowners and small real estate developers.  Mr. Fong writes extensively on politics and foreclosure issues, and among other places has been published on one of the top finance blogs, Naked Capitalism.  

Mr. Fong is a graduate of the University of San Francisco School of Law, and completed his undergraduate education at UC Berkeley. 


What is going on at CalPERS?

Good article today on peHUB regarding my client's Public Record's Act Request to the California Public Employees Retirement System (CalPERS):

A company called Aurora Advisors has filed a petition in California Superior Court asking the court to force CalPERS to release performance data, including quarterly valuations and cash flows, for the years 1990 through 2012 and all available data from 2013.

Aurora, which publishes the popular financial blog Naked Capitalism, claims CalPERS has not yet complied with its full request after much back and forth since September. The system did release performance information recently for 2012 and 2013, according to the petition, seemingly cherry-picking only one part of Aurora’s request.  


CalPERS administers health and retirement benefits for over a million Californian public employees.  


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Striking at the Heart of the Tech Culture

[I wrote and submitted this to a magazine, but it was never published. So here it is in full for your reading enjoyment.]

The BART strike claimed its first fatalities on Saturday October 19, 2013. A train driven by a manager struck and killed two track maintenance workers.

The strike has brought to the surface the vacuity of the political discourse in the San Francisco Bay Area. BART is one of our major metro rail systems, and its unions face widespread public condemnation for the strike, from the public and the media alike. Part of the problem is with the union's communication efforts, which have sadly fallen into the category of preaching to the choir. 

Bay Area residents like to pride themselves on changing the world through technology, from  Big Data to iPhone apps. However, the ongoing analysis of the BART strike has exposed the emptiness at the center of the tech community.

It starts at the top. Ben Grossman, the head of Global Operations for Twitter had this to say about the strike "[w]hat's brown and black and looks great on someone involved in causing the #bartstrike? A Doberman. (Too angry, Loooong day in the car)[.]"

Grossman's attitude is well represented in my Twitter and Facebook feeds, which are full of well-compensated tech workers complaining about the inconvenience of the strike, the "overpaid" BART workers and the ridiculousness of paying people to push buttons. After all, how hard can it be to drive a BART train?

That last comment is particularly ironic coming from people who write software, as they spend most of their days pushing buttons on keyboards. When a game developer makes a mistake and pushes the wrong button, at worst some people get over-billed for their game. 

When a BART operator pushes the wrong button, people can die. Just like the two people who died on Saturday morning. Apparently skill at writing software doesn't translate into skill at evaluating the risks and dangers inherent in running a metro rail car. 

That is not the only thing that is not translating from software writing skill. It apparently fails to translate into skills at economic analysis. Or common sense. A group of software developers came together to "hack the BART strike" by visualizing all data from the strike. The charts allegedly show how BART salaries are too high and outpacing inflation, as well as the cost of living. The first sign something was wrong was when I looked at the housing cost for a family of 4 -- two adults and two children. The monthly housing cost given by the "hack the BART" model was $1795.00. That's enough to rent a two bedroom apartment in a decent area, or a house on the edge of the Bay Area. That should have been obvious from a simple Craigslist search. Moreover, that certainly isn't enough to rent a two bedroom apartment in San Francisco, including its immediate fog-shrouded suburbs that are adjacent to a town full of cemeteries. The cost of living given is far from living a life of luxury. 

Indeed, the charts that purport to show how BART salaries are so far out of line with inflation show a combined compensation package, and not the salary. Looking at the inflation dataset that the analysts used, it has no citations. It is therefore unclear whether the dataset incorporates the dramatic rise in real estate prices and rents. The cost of living data certainly does not. 

The dataset around salaries is much clearer, as it uses a public employee salary database. According to the data, station agents average $57,596 a year, with train operators making about a thousand dollars a year less. Assuming several weeks of vacation a year, that works out to roughly $30.00 per hour. According to the MIT Living Wage Calculator, a single parent raising 1 child needs to make $26.83 per hour to sustain themselves. That doesn't count what happens if there is a medical emergency, which is a well known cause of personal bankruptcy. Furthermore, the MIT data was mostly from 2010 and 2011, before the rapid rise in Bay Area rents. Anecdotally, the rent a roommate and I paid for a 2 bedroom apartment in downtown Oakland in 2011 would barely cover a one bedroom now. 

Train operators and station agents are essentially making a middle class income. 

What is the problem with that? Not everyone can be a software developer, IT professional, lawyer, doctor or options trader. Someone has to drive the trains, empty the trash, clean the streets and maintain the sewers. Why should those people have to earn less than a middle class income? Why should their income be so low as to deny their children the chance to attend higher education? We are constantly told that what people have to do to be successful is go to college, which costs ever more money. If parents can't save for their children's education, then they will have to take out loans. We all know what a burden that is. So everyone should just go and become a software developer or a electrical engineer? Really? We're going to have a society made up of only software developers and electrical engineers? The phrase "fallacy of composition" comes to mind.

Even low/entry level engineering and information technology jobs are increasingly going offshore, or done by workers on "temporary" visas, that amount to modern indentured servitude. The goal is to move almost everything offshore and keep only the highest level talent onshore. What is everyone else supposed to do? Apparently the answer is "struggle alone and be happy about it. And make some cool iPhone apps to work smarter and faster." 

Even in tech people struggle. The hours are famously long, and in fact pay is often not that high, in the context of hours worked. Yes, initial employees who get stock may make a lot of money. But the later comers? Good luck. Yes, people will get free lunches, shuttles to work and nice gym facilities. But if you talk with people who work at the famous valley companies like Google, you'll see that salaries are actually a little lower because of all the perks. Because a smart MBA has already priced those "perks" and reduced salaries accordingly. The perks are also designed to keep workers on site for longer hours. And how well are people paid? I hear people bragging about their latest foreign vacation, nice new car, and how they can afford to pay for their photography/rock climbing/fine dining/elaborate home cooking hobby. So? 40 years ago, all those things were within reach of practically anyone (white) who was willing to put in the hours. No college degree required. How do I know this? Because I grew up in Silicon Valley, and I remember retired friends of my parents who had never completed college but still had jobs that let them own a little two bedroom house in San Jose and have a hobby shop in the garage. That was nothing exceptional. Those houses would probably cost well over a half a million dollars now, with monthly mortgage payments far exceeding $1,795. 

Essentially a lot of people in tech are underpaid. Salaries and benefits (via stock options) for upper management are very high of course, as is money earned by the legal and finance sector firms that raise money and broker deals for startups. However, the culture in Silicon Valley is so myopic that people fail to realize how poorly they are actually doing. Instead, we're all supposed to get excited about the next phone app, personal electronic device and TED Talk that are going to change the world for the better. 

I have a confession to make. Growing up in the Valley, I believed that rolling out new technology would "inevitably" bring fairer distributions of wealth and an improvement in material conditions. But it has not. Not for most people. The problem it seems, is the fundamental way that our political economy works. Yes, smartphones, live streaming and social media have proved to be powerful tools for activism. But tools are used by people, inside an ideological framework. When that framework is poor, the results are as well. Given that over 50% of working age Americans lack a full time job, the results of our system are indisputably poor. 

We are constantly told by establishment apologists, that while oligarchs and their retainers grow ever richer, everyone else must accept lower wages, longer hours and a lowered standard of living. When a business threatens to leave town unless it gets tax breaks, local TV news does not interview people who say that the business should be banned from leaving town. Instead, we're told that we must accommodate its demands, for fear of losing jobs. Our communities must comply with the demands even if it inconveniences us. But transit workers' struggle to earn enough to hold onto middle class status is an inconvenience that we cannot tolerate. That's just the way it works, we're told. 

There's also the facile argument that workers should be free to strike, but employers should have the right to fire all striking workers. That argument fails because of the tremendous power imbalance between employers and employees, no matter if the employer is a public or private entity. Individual isolated workers are comparatively isolated against an organized employer. Collective action is the only thing that ever allowed working people to prevail. Either give a structure for it to happen peacefully, or it will happen violently. That's just the way it works. 


There has to be something more than individuals scrambling for success and chasing short term profits, all the while ignoring or resenting the plight of others, and hoping not to one day be the one whose livelihood is up for execution, while always looking for the next app, website or hack that will help one move up the ladder and push down everyone else. The prophet of the information age, Vannevar Bush, conceived of information technology as a way to augment memory. The full might of talent and money in Silicon Valley have certainly augmented our memory. 

But, there is no app for collective action, because it does not run on a phone or a tablet. 

It runs in our hearts. And when I listen to people complain about the inconvenience of the BART strike, I wonder if there's an empty hole where their heart is supposed to be. 


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Know When to Get Help

Know When To Get Help

In life, it’s important to know when a situation has exceeded your ability to deal with it. This is not an easy thing to admit; I, for one, certainly don’t like doing it.

Everyone has the experience of attempting a project that seemed easy at first, but ended up becoming very difficult. It’s one thing to do that with ah hobby. If you start building a model kit and it turns out you lack dexterity and patience, you can always stop and throw it away.

You cannot do that with your primary residence or investment real estate. 

I often speak with people who have already entered foreclosure, and whose house is either up for sale within days, or has already been sold. Many times, those people have cases that would be pretty strong. Unfortunately, when a foreclosure sale is days away, it is difficult to fully investigate a case and prepare the best possible defenses. Post-sale cases are even more difficult, because courts are often reluctant to reverse a sale, especially when there is a new, non-bank buyer.

Generally the property owner has for some time tried to negotiate with the bank on his/her own, or hired low price, “bargain” counsel. Sometimes the property owner has hired someone who is not even a licensed attorney. Rather, they hire someone who claims to “understand the process.” Unfortunately the bargain price counsel, and the “understand the process” guy usually don’t know what they’re doing— and this creates even more problems. 

Of course, there is a simple way around it. Hire competent counsel at the outset. Understand that when you’re negotiating with a bank over your home, you are most often dealing with a predatory entity that simply doesn’t care about your earnest demeanor, master’s degree in computer science, or “getting to yes” negotiation seminar tactics. It’s the equivalent to trying to add a third story to your house by yourself with a few DIY books, and then when you get into trouble, you hire an unlicensed contractor to fix the problems.

Anyone can see the danger — if the poorly constructed third story collapses it could destroy the house and injure (or kill) the occupants. A poorly constructed negotiating/anti-foreclosure strategy is the same. When it collapses, it takes out everyone. I’ve seen that all too many times— people I could have helped if they had not waited so long to contact me. If you want to build a strong anti-foreclosure strategy and negotiate with your bank, contact me today for an expert consultation.

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