WATERTOWN, Mass. -- Big problems in the mortgage industry are hitting homeowners hard.

NewsCenter 5's Pam Cross reported that the Federal Reserve pumped $35 billion Friday into the U.S. financial system. The move is an attempt to stabilize financial markets and the economy as a whole.

The credit problems that started with high-risk subprime mortgages are now spreading. Aaron Kirley said that he feels the pain. His three-bedroom Watertown condo was nearly sold.

"We were ready to go. Two days before closing we got a call from the buyer that the company pulled the product he was all approved for," Kirley said.

The buyer's credit was gone. Call it the old pyramid scheme. Companies pushed the easy money of subprime mortgages. The notes were bought by European and American entities.

As interest rates went up, risky consumers couldn't repay. Worried investors backed off leaving the system in panic. The fed put billions of dollars of liquidity into the system Friday to ease Wall Street jitters.

Chip Poli, of Poli Mortgage Group, called this time volatile. A home mortgage for wealthy clients offered last week at 6.5 percent could now be 8 percent.

"Payment shock on that is a person who is now paying more a month on a transaction he was ready to make a week and a half ago," Poli said.

Wall Street remained anxious. Experts said the industry granted too many weak mortgages.

"They were creating programs that everybody got a mortgage. Now, it’s fear, and fear, to me, reacts faster than greed," Poli said.

It left Kirley looking for a buyer.

"It all changed in a day when the mortgage companies decided to pull their high-risk loans," Kirley said.

It's not just the big money markets with consumers worried and spending less. Merchants on Main Street will likely feel the credit crunch next.