This will backfire bigtime. Watch lots of people who are struggling to pay their mortgage suddenly stop. I paid off my house last year (for the full price)—guess I’m a sucker.
Not only that, but if I were a lending institution, I'd be leary of lending money in the future, because it seems the rules of the contract can be changed to suit the borrower.
Why, I'd want to charge more interest because of that additional risk.
That means higher mortgage payments for future borrowers, which will drive down the price of housing further.
No free lunch.