Are we overreacting or acting right?

Honestly, you're under-reacting. Those people sound to me like the neighbors from hell. They tried to pawn off their kids on you, tried to steal your Internet and other possessions, destroyed the apartment, and banged on your ceiling all night long, all in THREE DAYS? And then they have the gall to pull the race card to justify their insolence? Good God, how I sympathize with you. Try to avoid these people as much as possible. They're devoid of any common class or courtesy and it appears they're a fry short of a Happy Meal, if you know what I mean.