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I have a home with a concrete block foundation. The parging on the outside of the foundation is in tough shape, it's either missing or brittle the point of falling apart at a slightest touch.

I can see that the mortar as eroded out from between the blocks in a few places, particularly below grade. This is scaring me because on top of a water issue that I'm sure is created (or at least made worse) by these issues, I have visions of a termite/bug superhighway from these cracks inside the block wall to my sill... I might not even know I have a problem until the termites have eaten their way from the inside out on the sills...

What should I do about this eroding mortar? should I dig down and try to patch things up w/ some cement or other material?

Is the parging aesthetic or does it have some function? Meaning, should I be thinking about replacing/repairing it, or just let it fall away knowing the only downside will be appearance?
 
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