Job losses, declines in work hours, and other financial strains due to the deteriorating economy — more than risky loans — are now driving up mortgage default rates, economists say, and threatening to trigger another giant wave of foreclosures.

An estimated 1 in 14 homeowners in Rhode Island with a mortgage were at least three months behind on their payments at the end of September, according to a report released Friday by the Mortgage Bankers Association in Washington.

These “seriously delinquent” mortgage holders — on top of the more than 2,100 mortgage holders who entered foreclosure in Rhode Island during the third quarter — are largely the product of the deteriorating job market, economists say, and therefore even harder to rescue than their predecessors.

“You can do all the [loan] modifying you want, but if you lost your job, you can’t pay back any of your loan,” said Nicolas P. Retsinas, director of Harvard University’s Joint Center for Housing Studies. “In some ways, the worst is yet to come.”

Nationally, the first wave of foreclosures was driven primarily by investor speculation, followed by homeowners who faced “rate shocks” when interest rates on their mortgages reset, said the Mortgage Bankers Association’s associate vice president of economic forecasting, Orawin Velz. “Now, the problem becomes fundamental, which is that people are losing jobs.”

The U.S. economy has shed 1.9 million jobs this year, and slack labor demand has left more people working part time because they can’t land full-time jobs. The Economic Policy Institute in Washington estimates the number of unemployed or underemployed workers in the county at 19.6 million, or about one in eight workers.

“Until we see a turnaround in the job situation, we’re not going to see these numbers improve,” said Jay Brinkman, Mortgage Bankers’ chief economist. The increase in mortgages that are 90 days delinquent is “the highest it’s ever been,” he said.

Rhode Island has lost nearly 15,000 payroll jobs since January and the state unemployment rate as of October is 9.3 percent, tied with Michigan’s as the highest in the country.

Rhode Island also is just behind Michigan in its rate of foreclosures initiated during the third-quarter, making it sixth-highest in the country and ahead of every other state in New England. The Mortgage Bankers’ report is based on a survey of about 85 percent of all mortgage companies, commercial banks, thrifts, credit unions and other lenders

Meanwhile, the ranks of homeowners have fallen behind on their mortgages has grown. The state’s third-quarter delinquency rate (mortgages 30 days or more past due) rose to 7.3 percent, compared with 5.8 percent during the same period last year, according to he Mortgage Bankers’ report. (The delinquency rate excludes loans in foreclosure.)

“People are losing their jobs, they’ve depleted savings and 401(k)s,” said Raymond Neirinckx, of the Rhode Island Housing Resources Commission. “They’re saying, ‘What else can I do now to save my home?’ ”

Efforts by Washington lawmakers to encourage lenders to voluntarily modify mortgages “are not working,” Neirinckx said. “Tweaking interest rates or extending the terms from 30 to 40 years isn’t having a significant impact.”

Lenders are taking months to come up with modification plans, Neirinckx said, in part because the entire system is overwhelmed by the volume of work. And when they do come up with a proposal, he said, the modification is often not enough to make the mortgage affordable for the homeowner.

Federal Reserve Chairman Ben S. Bernanke last week outlined several options to help stem foreclosures, including buying delinquent mortgages and providing bigger incentives for lenders to refinance loans. He called for addressing the “apparent market failure” of lenders to modify mortgages even in cases where it was in their own economic interest to do so.

Bernanke’s proposal would go beyond the efforts announced last month by the Department of Housing and Urban Development to change the amount of the loan a lender must forgive, and allow banks to extend the mortgage’s payback period.

“The harsh reality is that many of these loans that are now in default … are outside the reach of traditional channels,” said Harvard’s Retsinas. “You’ve got to break through the thicket,” he said, by reforming bankruptcy laws and changing tax rules to create incentives for investors of mortgage-backed securities to modify loans.

—With reports from Bloomberg NewsForeclosure starts

Rhode Island ranks sixth nationwide in percentage of foreclosure actions that were initiated in the third quarter.

1. Nevada 2.47 %

2. Florida 2.31

3. Arizona 1.88

4. California 1.53

5. Michigan 1.23

6. Rhode Island 1.22

Source: Mortgage Bankers Assoc.

larditi@projo.com