Well you definitely need an attorney to deal with the petition she is making. How long have the kids been in the current school disctrict? I would think if they have been going to the same schools for more than a year or two that the stability of keeping them there is greater than bowing to her desire of convenience to move them to another school just because she is now living with the OM. Seems to me on that issue you would be in the driver's seat.
What is the custody arrangaement you currently have? Do you have equal custody of them? What is her reasoning for eliminating the winter vacation time you have - is it always during the Christmas holiday or something?
Regarding the house, do you want to stay in it or would you rather sell it and find someplace new to start over? If you really want to stay in the house, then I would take the petition you received to the bank and tell whatever loan officer you are talking to that you need to closer the refinancing deal sooner rather than later and if they can't then I would immediately shop around for another lending organization who may be more willing to help you.
Hope the above helps and that things get better for you!
