Mortgage lenders will lose far more during the developing mortgage crisis than they did during all of the GFC. From 2007–2010, realized losses on defaulted mortgages totaled about $450 billion. There is currently about $8.3 trillion in outstanding fixed-rate mortgages with an average rate of 4.6% and 25 years left to maturity. Given that current rates are 7.5%, the mark-to-market losses on those mortgages are already about $2 trillion. When rates rise to 8.5%, the loss will rise to $3 trillion! That means even without a single default, on paper mortgage lenders have already lost over four times more than they lost during the GFC. That loss will grow to nearly seven times as much when mortgage rates hit 8.5%. Worse, during the GFC, since mortgage rates plunged, lenders had mark-to-market gains on all the outstanding mortgages that did not default. Since only 10% of the mortgages defaulted, those unrealized gains totaled about $1.75 trillion. That provided a huge cushion that today's mortgage lenders no longer have. In fact, when mark-to-market gains were taken into account, mortgage lenders actually made $1.3 trillion during the GFC. The current situation is therefore orders of magnitude worse. The impending disaster was created by the Federal Reserve holding interest rates so low for so long, and the FHA and GSEs guaranteeing 30-year fixed-rate mortgages, which allowed borrowers to lock in such low rates for such long durations. That sowed the seeds for the perfect storm of financial destruction that is about to hit.