She is constantly saying bad stuff and telling all of our buisness to them every day. For example, if our mom was to go to the store when she wanted to go to the store she gets really pissed off. Then she will call her 30+ friends and talk about it. Then she will talk shit and diss us and call us pyscho, retarded, jealous, (which is dumb since she's 29 never graduated highschool, has 2 kids and has no job and lives with mom!) Dumbasses, stupid, etc. It makes me so mad.

Good Luck!
Your sister obviously has problems, she should know better at that age than to throw stones in a glass house. She really needs to be more grateful that your Mom didn't leave her homeless. She's a grown adult, your Mom technically isn't obligated to babysit her ass anymore.
your sister is living in her house, living off of her... maybe it's time she showed some respect instead of carrying on like a spoiled child.