May 24th, 2011, 4:44 pm · Marilyn Kalfus, real estate reporter Orange County Register
Reported by Marilyn Kalfus and Jeff CollinsThe priciest mansion on the Orange County housing market – Newport Coast’s $37 million Villa del Lago – has been set for a foreclosure auction on June 20, threatening to end luxury home salesman John McMonigle’s quest to build an estate fit for royalty.
In addition, a separate auction has been set for June 8 to sell off the 20,000-square-foot building that McMonigle built two years ago to house his real estate sales and development operations.
Lender OneWest Bank moved to sell both properties to satisfy more than $29 million in loans that are in default.
The two foreclosure auctions are the latest developments in the decline of McMonigle’s personal and real estate fortunes. His wife filed for divorce early last month, and a week later, he filed for personal bankruptcy.
There’s a good possibility, however, that the auction dates on both the headquarters and Villa del Lago will be postponed. These dates frequently are put off by lenders as borrowers explore alternatives to foreclosure.
McMonigle had envisioned Villa del Lago as a sprawling estate, complete with a palatial twin-winged, 17,500-square-foot mansion, horse stables, vineyard and lake featuring a cascading waterfall.
Three marble arches adorn the home’s entry, and an underground garage the size of 1 ½ basketball courts provides parking for a fleet of limos. A separate two-story guardhouse stands sentry over the property’s entrance.
McMonigle was asking $57 million for the property when it officially hit the market in May 2010. Leading a tour of the estate last spring, he turned on fountains that shot jets of water about 20 feet into the air, then led a reporter into a wine cave stocked with casks of wine, serving up a vintage Tuscan red.
“We felt entrusted with this parcel, and we didn’t want to make any compromises,” McMonigle said at the time. “There’s only one of these.”
McMonigle hoped to finish construction by August, but work halted after OneWest cut off funding of its $21.6 million construction loan. McMonigle dropped the price to $37 million, and by July, he stopped making monthly loan payments – in retaliation, he said, for what the bank’s “breach” of its loan commitments.
In all, McMonigle and his partners have five separate loans on Villa del Lago. The four junior loans bring the total owed to $29.2 million, according to records from CountyRecordsResearch.com, a foreclosure website.
McMonigle also has an outstanding balance of nearly $7.8 million on the two-story headquarters building he built near Fashion Island two years ago.
McMonigle agreed to let the court appoint a receiver to take over control of his headquarters building and two condos his companies own in Newport Beach. But he continues to fight efforts to have the court seize control of Villa del Lago.
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