Question

Oak Tree   Hello, We just found out today that our oak tree has a terrible issue. We hired a tree trimmer that found that in the "Y"'s of the upper branches that there is a white "bug" infestation that is eating away at the tree and really leaving it a mess. He said he has never seen this issue before. We live in south Texas near the Gulf

Answer
Check and see if the fluff moves if touched--if so it is an insect called an aphid. IF not then it more than likely is the fungi.
I would guess aphids.
wooly oak aphid
  These insects have sucking mouth parts and can secrete a waxy material that is white. One of these is the Wooly oak aphid. You should be able to feel the sticky honeydew on the foliage. And it maybe raining down under the tree.
The fluff is waste material from the aphids.
I would spray the foliage with one of the following insecticides.
Numerous contact insecticides are registered for aphid control. If you do not obtain reasonable control, consider rotation to another insecticide. Contact insecticides currently registered for aphid control include: acephate (Orthene), bifenthrin (Talstar), chlorpyrifos (Dursban),  diazinon, malathion, nicotine sulfate, pyrethrum, rotenone, resmethrin, and tetramethrin + sumithrin.

IF the tree is too large to spray the foliage then a soil applied insecticide can be used. A systemic insecticide can be used that the tree takes the insecticide into the root system and to the leaves and twigs and kills the aphid when they suck the plant juices.
Imidacloprid (Bayer Advanced tree and shrub  Insect Control) is a newly available systemic insecticide that can provide aphid control on trees for many months following application to the soil.

Here is a web link to this producthttp://www.domyownpestcontrol.com/bayer-advanced-12-month-tree-shrub-insect-cont