Wet Insulation Paper

Mold usually can't grow without moisture and in the picture above, you can see that the paper backing on the insulation is not only wet, it has mold growing on it.

There's a good chance that a water leak in the house or above the crawl space is causing the damage to the installation. Don't underestimate a water leak in the crawl space or excessive moisture in this area. Remove the insulation and inspect the floor joist for water damage or stains.

Try to locate the area above the wet and damaged insulation. If there is a bathroom, kitchen or laundry area, inspect this area for water leaks. Remove the damaged insulation and do not reuse, but replace it with new insulation.

In some cities, there building codes do not allow you to use insulation with a backing on it. For obvious reasons, you can observe for yourself why paper backing is not allowed in crawl spaces.

In areas where condensation or humidity are problems, I would suggest that you inspect your attic's and crawl spaces on a regular basis. Moisture damage in your home can become expensive to repair and regular maintenance should be a priority for all homeowners.