I can't quite work through all the various slightly confusing details. Your PILs bought you a house as an investment, now you are talking about a mortgage.
I do think all the evidence does indicate your MIL feels she has done enough to support your DP through his life. She sounds like the sort of parent who feels their role is to provide financial support but is not able to provide emotional or other forms of support. Some people are like this, it's not a personal slight against you, I suspect whoever her DIL was, she would be the same. You cannot force her to change, maybe focus on the positive side to this, at least she is not an emotionally interfering IL or GP.
I understand that this is pretty hard for you, having lost your own mother, but she really isn't the person who can fill that gap. It can be painful even as an adult to have to deal with the unfairness of losing a much loved parent, whilst an uninterested IL is still around.
You cannot easily justify your DPs frightened behaviour, and you do need to keep yourself safe. But he does sound under a lot of pressure himself, highlighting to him that his own mother has faults and flaws may not be the best thing for either of you at the present time. Whatever you feel about her, he is still his mother.
Can you look at seeking more support from qualified professionals such as marriage guidance or personal counselling? MH problems can be very damaging in any relationship, or they could be as a result of problems in the relationship. Counselling could help you work through some of this as well as the other problems you have had to deal with.