Wow! You've got yourself a problem.
Part of your problem is that you have not accepted responsibility for the business deal. You're stuck running your innocent naive act. I refer to, "My husband, mother and I made a huge mistake.... we bought a house together." This is covert blame. Stated responsibly it would read. "I made a huge mistake—I supported my husband and my mother in buying a house together." However, there's another even bigger problem; you introduced someone you supposedly love to your mother whom you knew to be in need of therapy. Bringing anyone into your clan and submitting them to her is abusive. You are not the innocent peacemaker you believe yourself to be.
Most would agree that you can't stay in that environment. The baby is already picking up the vibes. He/she could very well have colic for the first six months due to the bile such vibrations generate. A baby is super sensitive to the out-integrities and withholds of the adults around him/her; it simply can't stand the pain of friction and arguing, or worse, the imitation of love. Even a verbally unacknowledged covert make-wrong (a condescending remark) or a deceit in the space affects a babies well-being. Read What to look for when your baby won't stop crying
. Here's another letter describing the the effects of unconsciously submitting someone you love to abuse/dysfunctional family
1) From your perspective who is morally or ethically or legally correct? Who would you prefer that your child emulate when he/she grows up?
2) Is it an ethical/moral/legal position that your husband has taken against your mother?
Post your answers.
In either case, I support you in telling your mother that you'll both be leaving and that neither of you will be talking to her, ever again—until she's completed 25 hours of therapy and is willing to clean up the issue to your satisfaction.
You'd be far better off living in a tent or a homeless shelter than to submit your child to another 24 hours of this.
In the meantime take day-long outings to get away from your mother, and, enroll yourself (alone) immediately in some counseling to locate the incident you let slide as a child/teen, that you handled by putting-up-with instead of insisting she get counseling or you'd leave. In other words, you are back there, growth-wise, still supporting your mother in abusing you and others. Ask the counselor to keep asking you, until you've recalled all of life's perpetrations, "For what in your life have you done that you are now paying yourself back?" It's a biggie. It's a karma thing.
Thanks for reaching out.