I live in a foreign country, and plan to purchase a house there. I'll borrow some money with interest from some persons in that foreign country. Can I deduct this interest and how? These lenders have no any identity in US, no tax payer number, no US address, etc. Thanks a lot!
To be deductible, a mortgage doesn't have to be with a US bank or give you a 1098, but it does have to be "perfected" against the home. This generally means it must be registered as a lien on the home with the local property records office (usually the county clerk in the US) and be written in such a way that your home can be foreclosed if you stopped making payments.
Then, the lenders may be responsible for paying US tax on the interest (usually on form 1040-NR non-resident return) since, with you being a US taxpayer, the income may be considered US source. It's not your job to enforce this of course, but with no 1098, you will need to give the lender's name and address with your deduction and the IRS will take it from there.
And, by claiming a mortgage deduction to a foreign private person, that could result in an audit where the IRS asks for proof that the loan is a perfected mortgage under the laws of the country where the property is located, so make sure you keep proof of this with your other tax records for as long as you owe the mortgage