Supreme Court of Arizona Holds Lender’s Diminution-in-Value Loss Required to Be Calculated as of the Date the Policy Was Issued Rather Than Date of Foreclosure

In a significant decision for both the title and banking industries, the Arizona Supreme Court recently held that the diminution-in-value loss under a lender’s title insurance policy could be calculated by the date that the policy was issued, rather than the date of foreclosure, if the court determines the title defect caused the borrower to default.