We have "pit set" homes in my area. I do charge extra to relevel or to do any repairs underneath them. They usually have a small access area at the rear of the home, which is basically a little duggout area with concrete walls. It is a PIA to have to crawl to this same spot when I need to enter or exit. With a flat ground set home, I open up skirting for easy access from several points and this brings in a lot of light. Still $1200 seems like a lot of money for a relevel. You may want to get more estimates. I do think that this is a relevel problem. With the home set on dirt and the skirting locked in hard like that to the surface and home, when the mobile home settles, the skirting has to go somewhere.
This looks like HardiePanel siding, a cementuous fiber type siding. If you are having a moisture problem, please note that the bottom edges and maybe even the backs of the skirting should be painted. Where the skirting ends and siding begins, the bottom of the siding should be painted. The panels will wick water up from those unprotected edges and damage the siding.
Also, if this is a moisture problem from ground water, Yanita's suggestions of ground vapor barrier is a good idea. You could also install powered vents in that area to force moisture out. If this moisture is caused by rain accumulating against the skirting and working its way down into the pit, you could try sealing the skirting in that area with a good polyurethane sealant, like Tremco Vulkem 116, and painting the skirting with water proofing primer and paint like is available at www.amesresearch.com
. For mold and mildew problem areas, I have been using a special paint called Perma White from Zinsser. I get it at Kelly Moore stores where they can tint it for me. Lowe's here said that it couldn't be tinted because Perma White wasn't in their computer.
Amateurs! Anyways, this is special anti-mold/mildew interior/exterior paint with great first hand reviews from my local pro painters. 5 year guarantee against mold.