In the wake of the $700 billion "bailout" bill, it is difficult to come up with a clear insight about what happened, what is happening or what will happen in the financial markets.

Views about the reason for the meltdown include the failure of Congress in past years to enact strong anti-predatory lending laws and Wall Street's creation of exotic products driven by, as past Federal Reserve Bank Board chairman Alan Greenspan described it, a system of "infectious greed and malfeasance."

Whatever your views on the matter, this country is now paying the price and its global impact is no less than mindboggling. In the view of many advocates for working families losing their homes, Congress has refused to enact one important strategy that could address a big part of the problem -- that is, to amend the U.S. bankruptcy laws to give judges the power to renegotiate mortgages, which could help homeowners keep their homes.

And now that the federal government, and thus American taxpayers, are taking ownership stakes in U.S. banks, it's ironic that taxpayers will be forcing foreclosures on their fellow Americans. Is this finally a time where the bankruptcy laws might change, given the changed role of U.S. taxpayers who now, literally, may hold their neighbors' mortgages?

Indeed, the irony in the current law is that if you own a yacht, a second residence or an investment property, you can file for protection under Chapter 13 to renegotiate the loan and restructure payments ... but you can't with your primary residence.

Such an action would go a long way toward avoiding the heavy costs facing taxpayers. With Treasury Secretary Henry Paulson projecting some 2.5 million foreclosures for the balance of just 2008, the exclusion in both the recent House and Senate bills of measures to prevent foreclosure literally throws "good money after bad." In 2009 and beyond, the figure could rise to more than six million foreclosures, according to a Credit Suisse analysis.

Foreclosures for Maine are projected by national mortgage industry sources to be 6,000 for 2008 and 2009. While not as visible as in such states as California -- with 340,000 projected -- Maine families are experiencing this national tragedy. Many of these home loans shouldn't have been made in the first place or under the terms they were given.

In many cases, loans were made by brokers taking excessive fees and basing their mortgage product on "stated income" of the borrower, income that was not documented. They sidestepped whether the borrower had any "ability to pay" whatsoever.

And foreclosures are just the tip of the iceberg. According to the Center for Responsible Lending in North Carolina, a national advocacy group that works on subprime lending issues, some 40 million homes surrounding these foreclosures will suffer declines in value estimated at more than $352 billion. These so-called "spill-over" figures are drawn from the likes of Merrill Lynch, Moody's Economy.com and the Mortgage Bankers Association.

For Mainers, each day adds another question to the puzzle: What impact will this crisis have on our state, communities and personal welfare?

Just one example illustrates the complexity of the problems faced in foreclosures, and why court intervention would be welcomed.

At Coastal Enterprises, the organization I head, we're part of a counseling network in Maine to help homeowners in trouble.

We've got a current case of an elderly couple that refinanced their home, and they are now in foreclosure. Despite their fixed income, the broker doubled their monthly income estimate and urged them into a mortgage they couldn't afford.

A loss mitigation package has been submitted to the bank that holds the mortgage, but it has not responded and the couple has been served a foreclosure summons.

Maine's own Bureau of Consumer Credit Protection is being alerted to more and more of these cases, each with its own peculiarity of condition of default -- illness, divorce, loss of job -- but most with some common underlying abuse, misleading calculations and onerous fees.

Pine Tree Legal Services and pro bono bankruptcy attorneys in Maine take on cases like this but are being inundated with requests for help.

Bankruptcy reform would go a long way to give consumer-oriented bankruptcy attorneys in Maine a chance to make the case for fair and equitable adjustments.

Last year, a Maine coalition called Homeownership Protection Act, representing diverse organizations such as the AARP, NAACP, Maine Council of Churches, community organizations, the attorney general's office and even the Maine banking and credit union associations, came together to successfully advocate for Maine's current strong law against predatory lending.

In the future, the challenge to Mainers, the Legislature, regulatory agencies and MaineHousing will be to keep abreast of, and even improve on, any federal provisions that will reinforce the authority states have to regulate mortgage brokers and lenders and the various mortgage products and terms they offer consumers. We also can strengthen our own foreclosure process.

The milk has spilled and we can't cry over it now. But we can make sure we understand how it spilled and put better laws in place, including amending the U.S. bankruptcy laws.

Ron Phillips is CEO of Coastal Enterprises Inc., the Wiscasset-based community development corporation and financial institution that provides financing and technical assistance in development of small businesses, natural resources ventures, community facilities and affordable housing. He serves as a member of the Consumer Advisory Council of the Federal Reserve Bank Board of Governors, where major issues involving consumer credit and regulations are reviewed.