You'd be suprised at hos often this happens.
Your neighbor is hoping you'll just do nothing & he'll be able to either get the land by adverse possession or force you to pay for the construction of the house and then have to sell it (to him) because you can't afford another house mortgage.
You must act quickly to mitigate your damages. Run-don't-walk to the police station and file complaints against him & every contractor/subcontractor you know of for trespassing. Then run to the court house and request an emergency temporary restraining order preventing "N and/or any construction workers or firms or materialmen or mechanics or any other person" from "continuing any construction on the housing project on X land, or entering X land, or directing/encouraging/allowing others to enter or construct on X land." You'll have to schedule a hearing within 10 days.
Serve N & the general contractor & any subcontractors with a copy of the order. You can serve everyone by having a friend take the order to their offices & delivering it to "the person authorized to accept service for the corporation." Serve N personally. You can't serve anyone yourself because you are a party to the action. Have the friend fill out Affidavits of Service for each company/person s/he serves. You can find a sample AoS in any court file -- just ask the clerk for one. Also, post the no trespassing sign on the property very conspicuously, identifying the construction as illegal & warning all and sundry that anyone helping further construction in any wy will be charged with trespassing. If you can, you should also block access to the land. Run a cable across the access road. Sit out there every morning and warn off anyone who tries to enter. Call the police at the drop of a hat.
The reason you must act quickly is to minimize your exposure to mechanic's liens & charges that you sat back & did nothing until the house was finished. This is going to be a huge mess & will cloud your title for a year or two until everything is straightened out. You should seriously consider hiring a real estate lawyer today to get the ball rolling. Take your title documents & survey & a list of every company/person you can identify & their addresses to the attorney. Some extra $100s spent now could save you $1,000s later.
Good luck.
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This is not legal advice and you are not my client. Double check everything with your own attorney and your state's laws.
