Washington Mutual today announced that it expects third-quarter earnings to crumble by a mammoth 75%, outpacing the analyst expectations of a 43% drop from a year ago.

The Seattle-based home lender is yet another victim of the rickety conditions in mortgage markets, which analysts say brightens the spotlight on the future Fed interest-rate moves.

WM predicts its quarterly loan-loss provision will come in around $975 million, surpassing net charge-offs for the quarter by approximately $550 million. The company blames the loss on the national housing market, which makes sense considering it has an estimated $189 billion (around 75% of their loan portfolio) tied up in home loans.

Fred Cannon, an analyst at Keefe Bruyette & Woods, warns this may be the calm before the storm, claiming that if the Fed doesn't cut interest rates, Washington Mutual and a lot of other lenders could continue to face more turbulence. WM said that its credit-card, retail banking and commercial group units remain strong.

WM shares remain steadily on par with its 10-day and 20-day moving averages. The stock is currently trading at $35.89, up 1.74%.