Sophie, Okay, the gloves are off and now you have to get a lawyer or at least seek the advice of a lawyer. No more talking to your h about the divorce papers. This is what I was referring to in my very first posting about keeping your cards close to the vest....no more discussions about money, etc. The only discussions you should be having w/him about your children, when he is going to visit w/them, take them places and over to his place, etc. Relationship discussions are now totally tabled.
This guy is really looking to get something out of this deal. I think he's figuring on you buying him out of the house....money for his pockets. There is no way in heck that he is going to let you stay in the home w/o getting something out of it. If he does, he'll be the first one I've seen.
Calm down, take a deep breath and whatever you do, you must now look at this as a business deal gone sour. Leave your heart at the door when discussing this w/a lawyer. You now much take care of your children and yourself and leave that man outside in the cold for a while. Time to go dimmer on him.
Sit quietly, the answers will reveal themselves when you least expect them to. The past is gone, the present is a gift and you need to focus on today, allow the future to reveal itself when it is ready.