That forced banks to change the way they did business, while also allowing banks to set themselves up as mortgage brokers.

In Snyder County, he recalled, 87 companies were able to provide mortgages. Only five of those 87-- banks -- had to follow the rules.

"The banks had to make it work, while the others could just get the money and sell the mortgages to others," Stockett said.

The mortgage brokers could go outside the area, even outside the country, to get money for mortgages in the region, while the banks were restricted to using their own capital, he said.

Stockett also blames the media for part of the problem, noting that 14 of 15 mortgages nationwide are being paid, but the media makes a big deal out of the people who default and face foreclosure.

"I saw this whole thing developing, with the problem getting larger and larger, until it blew up," Stockett said.

Gruver, the Bucknell professor, said he spoke last week with the chief financial officer of a major corporation, who told him he was barely able to secure the necessary loans, known as "commercial paper," to the meet the company's payroll and other obligations.

"The money market funds are just not working properly after the failure of Lehman Brothers," Gruver said. "If a company can't fund its operations, it must cut costs, which means they start cutting jobs. That's the tipping point.

"What that means is, if a person doesn't have a job, they won't be able to pay their mortgage."

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