Hi Nate, and welcome to ATP.
It would help us a lot to know where you live, at least the city and state/province? You can enter that info in your profile. Your location can give a good clue to what kind of tree diseases are prevalent in your area.
Also do you know what kind of tree it is? It looks to me as if this tree is growing lots of healthy new branches down below the affected trunk area. Does the bark always look like that? Or is it different down low where the healthy growth is? Can't tell from the pictures if the growths are making the bark fall off , or if the falling off of the bark makes the growths welcome.
It looks like some kind of fungal growth. Could you possibly cut or scrape off a couple and get a closer picture of them? If they come off easily, it may very well slow the spread of the fungus (if it is fungus) if you just remove the ones you can see. IF you do this be sure to put them straight into a sealed plastic bag so that they don't release spores into the air that might re-infect anything they land on.
