Mortgage On Primary Residence To Purchase New One

I'm confused. If you sold a home that had a mortgage, didn't the lender require full payment of the outstanding balance at the closing? I'm not aware of any lender that allows a mortgage to be transferred to a new property.

What home has a mortgage on which you are paying interest?

As an aside, tax law does not distinguish between a US home and a foreign home or a US mortgage or a foreign mortgage when it comes to deducting "qualified mortgage interest."

perhaps she means the interest paid on the US home before it was sold?

Not as acquisition debt, because the house mortgaged is not the house acquired by the principal of that debt.

As equity debt, it was deductible (subject to the $100k debt limit) until the house was sold. However, as it is now sold, what mortgage do you still have? Normally, a sale will pay off all debt secured by that asset. If you still have a mortgage, it is now an unsecured loan and therefore not deductible.