How should I handle my mother in law?

Trying to make this a long story short, but it’ll still end up being long. My husband and I have been together for about 11 years, and a few years ago, we had our first child. Ever since we had our first child, his mother has been very hard to deal with and has been playing a lot of mind games with us. My husband and his mom have never really been that close, we have always lived pretty close to each other, but they just never had much of a bond; we are very close with my parents just because that’s the way it’s always been. My parents are very involved in our lives, nonjudgemental type of people; you can tell them anything… So it kind of makes sense as to why we have been very close with them. It’s always been a known factor, but after we had our child, everything just went downhill. After our child was only a few months old, she started becoming a very client with us, not asking how we were or the baby and just kind of completely shut us out. My husband tried reaching out to her and asking her if something was wrong, and her response "I don’t care what you say about me; you’re this, that, etc. Which my husband was completely shocked by because we haven’t said or done anything to her… So it was very alarming behavior. Time went on, and things just got worse; she told the whole family that we won’t let her see her grandchild when we just felt completely uncomfortable even being around her in general with no words spoken, other than negative ones… And just having us shut out. Fast forward two years, there still has been no contact of any sort and more lies spread about us to other family members. The last thing to happen was my husband was visiting a family member with our child, I decided to stay home and get some relaxing time to myself, and his mother actually showed up there out of the blue and started screaming in his face in front of our child, it scared our son so badly, my husband just tried to shut her out so he could get our son out of there. Later that night, he got text messages on his phone saying how he’s worthless, always has been, he doesn’t have a future… They don’t care about our son because their other children will give them grandchildren and that he’s a disgrace. I can’t help but feel like this is all my fault because I feel like from the beginning, it felt like all the hate came from jealousy from my family… How we’re so close… And I’ve mentioned that to my husband, he does agree, but he also feels like there might be something not all right going on with her. And now my husband doesn’t have contact with anyone in his family because she has made us out to be terrible, and we haven’t tried to explain ourselves to anyone because I feel at this point its not even worth it. We just want a peaceful life, and it’s clear this woman does not care about her grand child or her own son. My question here, is does anyone think there’s something we could have done differently? Maybe some how this is our fault… I have gone over it so many times because I don’t want to be that toxic person. I feel in my heart that I’m not, but it’s such a crazy situation that even happened I have a hard time wrapping my head around it. My husband doesn’t even have parents anymore because of this.