What are your thoughts on this situation?

First, I think you need to have a talk with your brother. If he ignores you , get his attention. It seems to me you are being used between the both of them. Also, have a talk with your friend and if she ignores you she's not your friend. whatever the case is . Get out of the middle of it. If they continue. get his wife involved. I know hes your brother, but it seems to me he doesn't care about how his actions are effecting you. Stress the fact on how it effects his niece, if it doesn't matter to him. The mother in you knows what to do. Ask yourself if it was any other man, would you just stand by?