Buddy, your problem isn't your BIL sleeping in the same room as your wife and 7 year old. Your problem is that you allowed your wife to kick you out of your own room, then relegate you to the basement. This is what is not normal. Why on earth would you EVER agree to leave your own room, and especially agree to move to a moldy basement? What next? A cupboard under the stairs? You need counseling ASAP. Joint marital counseling would also be a good idea but you can not control whether she joins you. Either way, you need to work on yourself first, then figure out your marriage.
A seven year old still sleeping in the parents' bedroom is also a bit of a red flag IF it is not due to economic circumstances or a medical condition. There is nothing illegal about it, and certainly there are times it is justified, but you describe a 3 bedroom house of which your wife has one, your son was vacated from another, and your other son is bunking with mom. Who sleeps behind door #3?
