The 2-0 reverse leaves Real needing victory over Borussia Monchengladbach to reach the final 16.
Modric said, “It's difficult to explain, particularly after our first-half performance, in which we played pretty well and created quite a few chances, but we didn't manage to score. It's a very difficult situation but it is what it is. There's still one game to go and we'll be giving our all to try and win it.
“We've got to be positive. We've still got a game to go and we'll be fighting right until the end. We're at home and Madrid have always delivered when we've needed to win, but it's not enough just to be talking like that. We've got to go out and show it on the pitch because words alone aren't enough."