Under the loan policy, when must the Insured transfer the insured mortgage to the Company?

The correct choice regarding when the insured must transfer the insured mortgage to the Company under a loan policy revolves around the concept of subrogation. When the Company purchases the indebtedness, it effectively steps into the shoes of the original lender and assumes the rights and responsibilities of the mortgage. This transfer is essential because it allows the Company to protect its financial interests and ensures that it has the necessary legal rights to enforce the mortgage terms.

In this context, the other scenarios presented do not pertain to the transfer of the insured mortgage in the same way. For instance, when the fee owner conveys title to a subsequent purchaser, the mortgage remains with the original borrower unless the mortgage is assumed by the purchaser. Similarly, if the fee owner simply assumes the existing mortgage of the seller/grantor, the mortgage does not need to be transferred to the Company, as the relationship and responsibility for the mortgage remain with the original borrower. Lastly, while subrogation relates to the rights of the fee owner, it is specifically the scenario involving the Company purchasing the indebtedness that necessitates the transfer of the mortgage, emphasizing that the Company's acquisition of the mortgage is a critical trigger for this requirement.