For mortgage servicers, finding the right way to modify a loan remains a challenge. According to Fitch Ratings, subprime loans that have been modified are defaulting at high rates. Fitch reports that between 65 and 75 percent of modified subprime loans fall 60 days or more delinquent within 12 months of the loan change. Fitch said one reason for the high default rate is the public pressure to modify loans, even for borrowers who were likely to default whether the loan terms were changed or not. Fitch said other causes include falling home prices and increasing job losses. “Based on the redefaults to date, an optimal modification formula has not yet been found,” said Diane Pendley, author of the Fitch report.