Rating service Fitch is backpedaling on its previous optimistic projections of Alt-A mortgages, and is now calling for a higher percentage of defaults. Fitch forecasts a default rate of up to 15% in some cases.

15% default rate doesn't sound that bad, right?

Actually, those in the know are calling for well over 50% defaults on Alt-A mortgages, and a meltdown in Option Arm mortgages as well:

Its not just subprime loans anymore.