Dear Norma
So sorry for what brings you here. My attempts to offer advice will be flawed here, so please take what you need and leave the rest.
1. The children come first. They deserve better than some crazy person in their home, blood relative or not.
2. I, like your husband, came to view some very sick family dynamics as "normal." It is all we knew growing up. That doesn't make it "normal."
3. Your husband was extremely fortunate to marry someone like you. This is a good place for him to heal from his childhood.
4. If he wants to see his Mom, encourage him to buy a ticket and GO SEE HER. Keep this woman out of your house and AWAY from your kids.