Mass, according to Einstein, creates gravity, and in sufficient amounts, distorts space time. Think of a bowling ball on a mattress, how it deforms
space time around it. No try to imagine that in 3 dimensions instead of two, it's tough, but it works.
That said, one of the compelling theories right now is that, similar to the fact that "time" is entirely relative and doesn't really exist, mass
doesn't actually exist. It's merely the result of friction from the higgs field (what they are trying to discover at the LHC) against the particles
moving through it.
Anyways...
The universe is expanding, and according to recent discoveries, it's accelerating. But people often get confused about this....
Space itself, the "empty space" between galaxies is what is expanding, the galaxies and such are not expanding, they are merely moving apart.
Think of a deflated balloon with two planets drawn on it. As you expand the balloon by filling it, the space between the planets grows while the
planets themselves stay the same size (yes, on the balloon they stretch a little, just ignore that.)
So in essence, your theory is flawed because the particles within the universe are not expanding, the distance between stars in our galaxy is not
changing, merely the distance between us and other galaxies is expanding.
So, basically, this line is backwards:
"space expands when mass is present."
Space expands when mass is absent, the areas with mass (galaxies) are not expanding, they are moving away.
Black holes don't need any stretching of laws to exist, it's quite simple. The nuclear reaction within a star is a limited deal, it can only last
so long as it's in the process of fusing particles together to make newer ones. Once that star has burned off enough fuel, and is of sufficient
mass, gravity becomes stronger than the nuclear force holding the reaction together, creating a mass at the center of the star that becomes
increasingly heavy and small as it's compacting in on itself.
What lies at the center? Who knows, best theories are a tiny singularity where the laws of physics break down.
OR
A massive ball at the center of all matter sucked into it, packed as tightly as the particles can possibly be, leaving an actual mass and object that
because of it's mass, light can not even escape.