It resides in the mind of the person, who is ungrateful. He must, therefore, feel it, and be conscious of it. Here, it is evident that Hume is saying that unless the person, or criminal in this case, sincerely believes in what he wants to do, he will not be able to motivate the action. In other words, unless the sentiment is there, the action cannot be willed into being. In simpler terms, reason has it's place in determining morality, but it is not in the motivation of an action.
Reason merely allows the person to make moral distinctions.
Without reason, there would be no morality. Without reason, one moral clause would not be differentiable from another. To make an analogy to mathematics, truth is a function of reason, whereas taste is a function of sentiment. The universe as a whole must follow reason, but the catch is that each individual's universe is slightly different in that each individual perceives his or her universe differently. What each man feels within himself is the standard of sentiment.