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.
According to a Kaiser Family Foundation/Episcopal Health Foundation survey released in December, 29 percent of affected residents said that since Harvey, they had fallen behind in their rent or mortgage.
During last year's hurricane season, mortgage financiers such as Fannie Mae and Freddy Mac encouraged lenders to offer homeowners a forbearance — a temporary suspension or reduction in their mortgage payments — for up to 12 months. Lerma got one from his lender.
Mortgage and real estate experts say they don't believe the rise in delinquencies will lead to a spike in foreclosures in the months ahead because the economy remains robust. Foreclosures are down across the country and in FEMA-declared disaster areas hard hit by hurricanes, including in Texas, Florida, and Puerto Rico, they have held constant due in part to mortgage forbearances, according to Black Knight.
"If you see strong loan performance, it's usually supported by positive employment and good wage outlook, and we have both of those," said Marina Walsh, vice president of industry analysis for the Washington, D.C.-based Mortgage Bankers Association.
Amir Befroui, an attorney for the Foreclosure Prevention Project with Lone Star Legal Aid in Houston, said that although the forbearances have helped, he still expects a wave of foreclosures.
Brittani Groves, a single mother of four, didn't have flood insurance. She's trying to modify the loan on her home in the Houston suburb of League City, but it remains uninhabitable. She received $6,000 from FEMA for repairs, but it wouldn't come close to covering the $65,000 in damage and she's had to use it to cover other expenses, including rent on an apartment.
FEMA says its assistance isn't meant to cover the cost of returning a damaged home to its pre-disaster condition and that the aid can be supplemented by a Small Business Administration loan. Groves said she was declined for a loan.
"At this point, I still have my home. But I don't know for how long I'm going to be able to hold on to my house," said Groves, whose friend set up a GoFundMe page to help her with expenses.
Landis Blackburn turned down a six-month forbearance on his Houston home's mortgage because he'd have to pay all he owed at the end of the period. "In reality it does nothing for people," he said of forbearances.
Blackburn paid his mortgage and other bills but had to get help from family and friends, which he said was humbling. He is now on more stable financial ground because his insurance payment was recently finalized.
Texas Land Commissioner George P. Bush, whose agency is leading the state's housing recovery efforts, has been working with lenders and the federal government to get homeowners help through forbearances and other programs, including one that provides affected residents with up to $20,000 in temporary repairs to let them live in their homes as they complete their renovations and another that offers up to $60,000 in repair work for more severely damaged homes.
"The last thing (lenders) want are people handing back the keys to their home and having a run on the bank on distressed loans," Bush said.
Lerma said his family is "at a pretty bad point right now" as he's maxed out credit cards and emptied his savings. Yet, he remains hopeful.
"We know we'll get through it. We're just riding it out," he said.
Follow Juan A. Lozano on Twitter at https://twitter.com/juanlozano70