2015 Law Student Writing Competition Winning Article: Mitigating the Ongoing Impact of the Subprime Mortgage and Foreclosure Crisis: Lessons from Oakland and Richmond, California

Victoria Wong

Victoria Wong graduated first in her class from U.C. Davis School of Law in the Spring of 2015 and is a member of the Order of the Coif. While in law school, she was a judicial extern to the Honorable Justice Louis Mauro (Third District Court of Appeal), and worked as a summer associate in the Mountain View office of Fenwick & West. After graduation, Victoria will join Fenwick & West as a corporate associate. Victoria received her B.A. in Social Welfare from U.C. Berkeley.

I. Introduction

In 2007, the U.S. housing bubble burst and triggered a nationwide banking emergency.¹ The practice of granting loans to borrowers with problematic credit history, known as subprime lending, flourished in the years leading up to the Great Recession.² At the same time, excessive optimism regarding the value of unregulated mortgage-backed securities and ever-increasing housing prices led to the housing boom and oversupply.³ These developments were coupled with longstanding federal laws encouraging homeownership and allowing relaxed lending and underwriting standards.⁴ All of the factors described above contributed to the real estate crash, when housing prices plummeted and many subprime borrowers found that they could not refinance their homes and were underwater, resulting in millions of foreclosures.⁵