Mark Nussbaum Deal Partner Faces Chicago Foreclosures

An investor who has made Chicago multifamily deals with embattled real estate attorney Mark Nussbaum is at risk of losing a chunk of his portfolio to financial distress.

New York-based Eliazer Tauber, a landlord of dozens of small to midsize apartment complexes on Chicago’s South Side, operated by Straightline Management, is facing at least nine foreclosure lawsuits on buildings that he purchased for far more than the appraised values set by property tax officials.

The Straightline portfolio includes hundreds of Chicago apartments, many of which Nussbaum and Tauber appear to have purchased together, sometimes at prices that make little sense, given the need for major renovations and construction work on the properties.

While Nussbaum has served real estate clients as a lawyer, he also became a fast-acting lender to help multifamily buyers show they had funds to close transactions. Some of his clients, however, got their real estate businesses caught up in a mortgage fraud scheme that involved selling properties between related parties in order to score bigger loans, often for more than what the collateral was worth.

Nussbaum then began buying Chicago apartment buildings that were in rough shape as a white knight, saving the previous owners from facing foreclosures or city building code violation cases.

Now, financial distress is engulfing Tauber, a fellow landlord with whom Nussbaum appeared to work closely. Tauber has signed multiple loans on behalf of Nussbaum’s entities. He and his son Jacob Tauber were Nussbaum’s known deal partners on Chicago multifamily properties through Straightline, according to people familiar with the investors.

The foreclosures on Tauber come as Nussbaum is under indictment in New York for grand larceny for allegedly bilking investors out of at least $15 million in escrow deposits meant for real estate deals.

Nussbaum hasn’t been directly tied to the ownership for Tauber’s apartment buildings now facing foreclosure. But he looks to have been a key part of investments for South Side multifamily players now on the brink of financial danger, including Tauber and Yissocher “Izzy” Rotenberg, who sold multiple buildings to Tauber before a big portion of Rotenberg’s 500-unit Chicago portfolio got dragged into foreclosure.

Close looks at their deals show the wave of distress that could be coming for other investors in the South Side linked to Nussbaum. Many appear to follow a similar playbook of buying properties at low prices, flipping them to related parties at high prices and taking on bigger and bigger loans. This strategy is coming crashing down just as Nussbaum’s many escrow clients are seeking to get repaid.

The foreclosure cases totaling 29 units are now hitting Tauber, who bought the properties for nearly $5 million total between December 2023 and May 2024.

Tauber borrowed nearly $4 million from New York-based Ark Mortgage to complete the purchases, and the loans often came at interest rates of more than 8 percent for the borrower. He’s been involved in the purchase of larger buildings with Nussbaum-led entities that employ Straightline Management as their operator, as well.

Silver Hill Capital, based in Coral Gables, Florida, as well as Wilmington Trust acquired the mortgage notes originated by Ark and are now moving to foreclose on Tauber’s property.

Attorneys for Nussbaum and the lenders didn’t return requests for comment, and neither did Jacob Tauber nor Straightline.

The Chicago Housing Authority last year suspended Straightline from its housing choice voucher program, meaning it wasn’t allowed to make new leases with tenants whose rents are mostly subsidized by the federal government for at least a year, according to public records obtained by The Real Deal. Suspensions are most commonly triggered by a landlord having multiple units fail the CHA’s Housing Quality Standards, meant to keep apartments from falling into disrepair. Unit failures can allow tenant leases to be terminated early.

Straightline was one of more than 200 companies currently debarred from the program as of May, and Straightline was required to serve a one-year suspension that was scheduled to end earlier this summer. To lift the suspension, Straightline was required to attend a property management course with an approved trainer and gain a certificate of completion; it’s unclear whether Straightline has been reinstated to the authority’s housing assistance program.

While the authority’s landlord guide says suspensions aren’t common, several owners have been suspended for various reasons in recent years, including for failing to get units into compliance within the Housing Choice Voucher program’s housing quality standards requirements.

It’s unclear whether Tauber’s apartments now in foreclosure were subject to the suspension — some landlords are able to protect certain portions of their portfolios from Chicago Housing Authority enforcement by using separate vendor numbers issued by the agency for each building, officials said. “If the vendor uses multiple vendor IDs, CHA’s treatment would vary on a case-by-case basis,” a spokesperson for the agency said.

Straightline listed 97 units owned and 47 occupied through the CHA program. It’s unknown whether Straightline, Tauber or Nussnaum has additional CHA vendor IDs that have avoided suspensions.

Here are the properties where Tauber is facing foreclosure from Silver Hill and Wilmington: