What happens to original security deposit from original 12mo lease?

If you send the security deposit disposition to the address they rented from you with ADDRESS SERVICE REQUESTED written in the area between the address block and stamp you'll get a postcard back with the details if the mail is forwarded. 

Tenant decides not to pay and use security deposit for last payment (not allowed).

As the seller, why would you return the deposit?

Are the prorated rents being given to you (along with deposits) or is the seller keeping it? 

The deposit we require is NOT earnest money.

It good for your tenants and staff, not dealing with bank deposits and cash/checks.  

However, another option is to call a few local credit unions and banks and see what options they have, they might just require you use them for your operating account and some might even require some deposit minimum too.

We decided to keep their entire deposit of $2000 and bill them the rest.

I continue to get emails from Steve Mayer of Finance holding Company, but he keeps wanting me to pay a deposit + his 2% origination fee upfront...seems like a scam and wanted to see if anyone has done business with them in the past