See below three questions copied from original post and answers in bold.
For the first company, should I say that I owed $0 on January 1, 2019 since loan was sold/transferred midway through the year? - YES, the first company doesn't hold the mortgage so there was no loan balance as of that date. The second 1098 would have an amount listed for the amount owed on 01/01/2019.
For the second company, "Box 2 - Outstanding mortgage principal as of 1/1/2018" is blank, presumably because loan was non-existent on this date. Should I leave blank or should I put in beginning balance (which was from mid-year)? If I leave blank, TT keeps saying the 1098 needs review. -
Enter the beginning balance from the second company, in this case the mid year number.
I assume for both loans that I should say no to the question, "Was this loan paid off or refinanced with a different lender in 2018?"? - Correct, you should not select the box for "paid off or refinanced with a different lender." That does not apply to your situation. You did not pay off the total balance and you did not chose to refinance; it was an automatic sale of the loan not of your doing.
