MIAMI - While federal regulators and, possibly, the rating agencies are advocating for loan modifications in lieu of foreclosures, some say loan modifications will only delay inevitable defaults.

Moody's Investors Service announced late last month that it might increase required credit enhancement for subprime pools that limit the proportion of loan modifications. And Standard & Poor's has said it is evaluating the effect of loan modifications. HEL deals that include caps on loan modifications generally do so by limiting changes to 5% of the pool's outstanding loans.

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