Fannie Mae Files $6.2M Foreclosure Against Bialostozky-Linked Chicago Portfolio as Multistate Mortgage Fraud Claims Widen

Fannie Mae filed a $6.2 million foreclosure lawsuit last week in Cook County Circuit Court against Yellow Portfolio Holdings LLC, an entity managed by C. Yoseph Bialostozky, targeting 90 residential units across three South Side Chicago properties. The landlord stopped debt service payments in April, according to the complaint. The action is the latest in a multistate crackdown on investor Chaim Bialostozky, who faces fraud allegations in Illinois, Connecticut and Oklahoma. Lenders accuse him of inflating secondary purchase prices while concealing lower-priced initial transactions, securing loans covering his true acquisition costs and enabling zero-down purchases. Nearly $44 million in mortgage debt tied to his properties is in foreclosure proceedings, with at least $25.5 million personally owed. Walker & Dunlop, acting for Freddie Mac, filed twin foreclosure and fraud suits in Connecticut on July 1 and is seeking emergency receivership. Court records indicate Bialostozky has not appeared or responded in any proceeding.