Actually, it's quite good for first-time homebuyers, because it means an instant reduction in housing prices right out of the gate - as long as you're still shopping, that is.
This kind of measure would really screw a lot of homeowners. The ones who stand to lose the most are those in suburban areas of the Northeast where property taxes are the highest. Eliminating the interest deduction would mean that these people would lose an enormous tax benefit at the same time escalating property taxes make these homes damn near "worthless" (from a net income/cost standpoint) anyway -- which means a lot of these homeowners are going to find themselves owing a lot of money on homes they can't sell.