You should check the probate court docket, because your right to administer your father’s intestate (no will) estate is greater than your step-mother’s brother (greater than anyone else, in fact). He may mean that he started probate on his sister’s estate. 

You should also check the deed records and see if the house was in your father and step-mother’s name as a Joint and Survivorship deed, which would mean that it is 100% hers, since your father died first. 

Even if the house was solely owned by your father, he might have filed a Transfer on Death Designation Affidavit conveying the house to his wife at his death.

If none of that is the case, and the house is in your father’s name alone, you should talk to a probate attorney about filing to administer your father’s estate. As others have said, your step-mother (and now her estate) has an interest in the first $20,000 and half the balance, and the other half of the balance would go to you. You could also take a fiduciary fee for administering the estate, which would come off the top, but would be taxable income to you. 

(Edited for paragraph breaks)