What your describing is a severe case of "Drying Edge" where the soil around the home has dehydrated significantly. What needs to be done is to rehydrate the soil without allowing the water to drop into the opening. This severe of a case will take a significant amount of watering with soaker hoses placed approximately 18" away from the recess (opening). DO NOT allow the water to drain into the opening and DO NOT try to over water to fast. I would recommend that you speak with a foundation specialist to look at the situation and provide specific guidance on how to correct your situation.
Packing dirt into the opening is not necessarily going to help and may actually hide any progress of your watering efforts. Additionally if you were to use other than the natural soils around the home you can cause other issues as well. I would expect you are sitting on the highly expansive clay soil? If you were to replace any dirt around the home with other than this it can potentially cause negative effects.
Another thing that your neighbor should do is to inspect for signs of foundation movement and damage. These are the typical cracks in the foundation, exposed concrete floors, exterior brickwork, separations in trim around the outside of the home, sticking doors/windows, sheetrock cracks, interior trim that is misaligned, cracked tiles, etc. This sounds like a lot and these are just signs of potential movement. You may also wish to speak with a licensed Professional Engineer that is experienced in residential foundation issues.
Good luck and if you have any additional questions make sure you ask!
Emmanuel J. Scanlan
PS Inspection & Property Services LLC
TREC License # 7593
International Code Council, Residential Combination Inspector #5247015-R5 (Electrical, Mechanical, Plumbing and Building)
Certified Infrared Thermographer (ASNT-TC1A Standards)
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Texas Department Of Insurance, VIP Inspector # 08507061016
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CMC Energy - Certified Energy Auditor
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They should call a foundation specialist to view the foundation before doing anything. If there is any damage or danger of any now is the time to address it.
They should have watered more before. Make sure you are on a regular watering schedual.