I would suspect what may happen is the IRS start looking at what a HELOC is used for, and whether the tax deduction on the interest is really ‘legal’ or justified. If equity is withdrawn from a property to improve it, the interest on it is tax deductible. If equity is withdrawn from a property to fund a nice new BMW, the interest covering that HELOC(amount) is not supposed to be tax deductible.
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Not going to happen either. Simply because the IRS does not have the bandwidth to go through the details of every person’s financial situation and figure out how a heloc was used, or a cash out refinance was used.
