I wanted to see what other people were using to set up their security deposit accounts? 

But the deposits did go to an escrow company, not directly to the seller.

Some people love it, some people hate it.Benefit is once you get on the program the government direct deposits into your account. 

If Person A had any claim to the deposit, it would have been right after they left, which apparently was over a year ago.Your agreement is with Person B and that's who you would return the deposit to.

He has no legal rights to the property or the deposit because it belongs to the legal occupants of the rental.

With a bit of planning and good operations, one can easily manage 20 to 30 properties without an assistant, with less than a day or two a month.There's lots of automated ways to check on rent, make deposits (my tenants deposit directly into a bank account), receive maintenance requests, have maintenance done, etc., etc.One thing I could argue is to have your tenants ONLY email you, especially for maintenance requests, and that email goes directly to the vendor that you have set up to handle it.

Most hosts in Chicago just pocket the full funds from direct booking, you would be in the very very small majority if actually paid city taxes on it.

The only thing the bank required is that I had a checking account with direct deposit setup into their account. 

There are limited exemptions such as if you inherited the property where it would be allowed.There are technical means to navigate the 90 day rule but your best bet by far is to talk to the lender and let them know the situation and ask for their direct guidance.  

Would it be a good idea to take a deposit to secure the deal until the rule clears?