Inability to make payments prompts fear of foreclosures

FRIENDSWOOD, Texas — As Jacob Lerma surveyed the skeletal beams of his suburban Houston home that was flooded during Hurricane Harvey, he kept muttering three words as he wondered if his family would ever be able to move back in: “I don’t know.”

Like many Texans whose homes were flooded during Harvey, Lerma faces mounting expenses and hasn’t paid his mortgage in months. His insurance payment wasn’t enough to rebuild his home and he was only offered a small loan after applying with the Federal Emergency Management Agency. His last hope is a possible buyout from the city of Friendswood. In the meantime, he, his wife and two daughters will continue living with his parents.

“If the buyout doesn’t work and more money doesn’t come from insurance, walking away from it might be our only option,” said Lerma, 27, who set up a GoFundMe page to help his family. “It’s just crazy to see this all taken away.”

Five months after Harvey flooded thousands of homes in the Houston area and along the Texas coast, reports by real estate and financial firms show the storm’s destruction caused a significant increase in mortgage delinquencies, prompting fears by nonprofit and legal aid groups about a possible wave of foreclosures in the coming months.

Although some affected homeowners had sufficient flood insurance to rebuild, others had insufficient or no coverage and haven’t been able to get the federal aid or other assistance they need. Even some homeowners who were insured and got FEMA help have struggled financially because it took months to process their claims.

In July, the month before Harvey came ashore as a Category 4 hurricane and battered the Texas coast and low-lying Houston farther inland, 5.5 percent of the state’s mortgages and 5.7 percent of Houston’s were delinquent. By December, those figures had jumped to 7.2 percent of the state’s mortgages and 10 percent of Houston’s, according to Black Knight, Inc., which provides data and analysis to the mortgage and real estate industries. Of the state’s 91,400 mortgages that were at least 90 days delinquent in December, about 40,000 were directly due to Harvey, the company said.