Should we be splitting the interest paid out for each borrower and reporting as such when they are Tenants in Common?

Payer of Record
The payer of record is the individual carried on your books and records as the principal borrower. If your books and records do not indicate which borrower is the principal borrower, you must designate one.

How they split up the interest is up to them.

Excellent ...that is exactly what I thought, but the question was posed.