You need to separate the $60,000 loan from your brother, versus the value of the house and the improvements your father made. The amount owed on the house is still $349,000, not $400,000. Even if your dad directly used that money to increase the value of the property to $750,000, your brother is not entitled to a greater portion of that gain because of the loan. What he is entitled to is the outstanding balance plus any interest owed, period. That is how loans work.
Further, your brother is now owed that money from your mom, as she most likely inherited your dads share of the property as well as the debt. How she pays it has no impact on the proportional ownership interest that each of you now has in the house. When she dies, and if a portion of the loan is still outstanding, your brother would be able to collect the remaining balance from the estate before you divide up the remaining assets, and in that case it would reduce the total value that you would stand to receive from your moms estate. In no case does it alter the proportional interest each of you has in the property, because. it. is. separate.
These situations are always difficult, and it's good to remember that you're dealing with family. Try to empathize, but also set the expectation that everyone must do the same. You all deserve to be treated fairly and you all deserve your fair share. If you truly believe that the others are not mature enough to approach this objectively, and if you are unsure about the financial math involved, you can hire a CPA. A good one will be able to give you an exact breakdown of the entire situation using well established methods and explain all the details in a way that should leave everyone with the sense that they were treated fairly (not necessarily happy). I'd skip the lawyer unless things get really contentious; you (or your accountant) will probably know if things have reached a point where lawyers are necessary.