First of all, I am really sorry you lost the house you were meant to stay in. It's difficult enough when a loved one dies and then when inheritance issues and wills weren't properly cared for, it becomes a mess. It's frustrating to be in the situation you are in but how awesome you were able to live in the house for 9 years and will likely now have part of the inheritance.

You absolutely need to find an attorney to assist with this. The attorney who contacted you is not looking out for your interests and you need to find someone who can speak to this attorney on your behalf and in the legal jargon. It's not clear who the attorney is who contacted you, the estate attorney? An attorney hired by one of the other children? If you didn't have a written contract or a change to the will that shows that you are responsible for any difference in equity, it won't be the case that you should make up this difference, any more than you couldn't stay in your home because the proper paperwork wasn't completed. It makes no difference that you lived in the house rent-free, any more than a renter in the house would need to pay for the difference in the cost. It seems you would need an estates attorney, not a real estate attorney as this is more of an issue with the disposition of the estate and not the nature of the property itself.

I am not an attorney so please do not consider this anything other advice so you can protect your interests. It will cost something to have an attorney work on this for you, but if the alternative is to lose your husband's portion of the price of the house (which should be split equally from what you state in your question) and have to pay $10,000, you need to spend the money now. There could be other factors involved in this that you don't know or haven't specified in your question and that is where an attorney could review everything and let you know how the law in your state applies. Estate law is specific to each state. Be sure that your husband does not sign anything from the estate attorney until you have spoken to your own attorney and if this matter has already gone to the probate court with its final accounting, you only have a certain amount of time to file an objection with the court. Read everything very carefully that has been sent and will be sent from the attorney or the court.

I hope that you are able to find an attorney who can help you. You can usually email the Bar Association in your state for referrals or look online for any reviews.

If the house lost $25,000 in equity, that would be broken up into 7 equal pieces.

Absolutely not. Your tenancy had nothing to do with loss in equity.

Get an attorney.

Did you sign an agreement with the grandfather when you moved in regarding the terms of your tenancy? Is there a stipulation in the will that says "in the case of negative equity blah blah blah"? You've lived there for nine years, I don't know if you paid rent or the mortgage or what, but it's probably in your best interest to get a lawyer to figure it out.