That would be an economic disaster. Bankruptcies would soar because of the collapse of the housing market because of the realization that the cost of mortgages increases. Banks would foreclose on housing which will threaten their solvency.
People’s simple solution are ill-conceived and not thought through. This is one of those.
Marx, is that you? You've never heard of the free market in which these bloated housing costs would naturally get corrected?
Why should someone get something back from the Federal government anyway? Pay what you owe, and that's that. That would eliminate all the compliance costs and everybody would have skin in the game.
Very few people buy a house because of the mortgage interest deduction and with the doubling of standard deduction hardly anyone will need to deduct going forward