clarify this statement. this interest is from a mortgage i hold on a home i sold to someone who lives in the home as their main residence

That would mean that you sold a house, and the buyer did not get a loan from a bank, 

• They did not pay for the house up front, but rather owe you the value of the house.
• You would then "collect the mortgage", both principal and Interest.
• The question refers to the interest you received.