I think he needs to to his family and run.I think his mom needs very serious mental help.I had a mother inlaw who was minipulative.When she said job my husband jumped.She would do things to me that was in my opinion very mean.He would always say she was just joking.She put her dog in my lap when she knew it had a bladder problem then offered nothing to clean up.She hung my panties from her resurant wemans door and left them thier to mark to wemans bathroom.I was upset she said it was a joke and he defended her.We invited her to go out to dinner with us.When we got thier she had cooked a whole dinner.That was not the problem.She cooked everything I couldn't eat.Then appoligisted to her son and said I could just watch them eat and eat later.I had nothing to eat that night at all.he defended his mom say she didn't mea to leave me out.and told me to starve.I was not unhappy to go to her funeral.I was indeferant to it.I was sad for my h.I didn't let him rearange my house to look like his mothers either.I told him when we remodle has it is still going on.If your mother liked it,It well not be put in our house. 
I say that your husband needs to deal with his mom not you and never put mom above you and your needs.I say he needs to take you and his kids and run change states and names .I do not feel as if you can have a normal relationship with her couse she is not normal in the head.Maybe your chideren have inherited his moms illness.I know from personal experince that mom inlaws can do really trible things and smile as if they think it is a joke.and sons will defend mom even if it hurts the family they love.