Is this really happening in Laguna?

Props to the OC Register's South Coast Homes blog for coming across this Laguna Beach property. Here's the summary: the house is a $9.5 million short sale. It's also a preforeclosure, as we'll show you today...

24 Lagunita Drive, 92651
Asking price: $9,495,000
Asking price/ sq ft: $1,315
Purchase price: $5,500,000
Purchase date: 8/31/00
Size: 5 beds, 5.5 baths, 7,220 sq ft (built in 1983)
MLS: S564400 (52 days on Redfin)
ZipRealty price tracker: Price Reduced: 03/10/09 -- $11,990,000 to $9,900,000
Price Reduced: 04/06/09 -- $9,900,000 to $9,495,000
Zillow Zestimate: $4,895,500
HOA dues: $140
Type: Single Family Residence
Style: Contemporary
Stories: 3+
Lot size: 8,580 Sq. Ft.
From listing: AN INCREDIBLE OPPORTUNITY FOR A LAGUNA BEACH, 'OCEAN FRONT' RESIDENCE! ON THE SAND, LOCATED IN PRESTIGIOUS LAGUNITA! CUSTOM HOME WITH 5 BEDROOMS AND 5.5 BATHS! PANORAMIC OCEAN VIEWS FROM NEARLY EVERY ROOM! ELEGANT MASTER SUITE ON TOP LEVEL WITH FIREPLACE, RETREAT & LUXURIOUS BATH! ENTERTAINMENT ROOM WITH WAT BAR! GOURMET KITCHEN WITH CUSTOM CABINETS, GRANITE COUNTERS AND CENTER ISLAND! LIGHT AND BRIGHT WITH VAULTED CEILINGS AND LARGE VIEWING WINDOWS! ADDITIONAL AMENITIES AND UPGRADES INCLUDE...CUSTOM LIGHTING, 2000 SQ FT MASTER SUITE, INFINITY EDGED SPA, BEACH FRONT TERRACES, 4 QUEST SUITES WITH LIMESTONE BATHROOMS, WALKING DISTANCE TO THE MONTAGE RESORT AND SPA, 24 HR GATED COMMUNITY, AND MORE!! TROPICAL LANDSCAPING AND CUSTOM HARDSCAPE! MUST SEE!

There were a total of $11 million worth of loans made against this property in 2007 - one for $10 million in August, and another for $1 million in September. The $10 million loan is currently in default and also is the reason this property is a short sale.

The notice of default - which came in March - is for more than $240,000. Yikes. Who said the rich are all truly rich?

There's not much to be learned here, except that $10-million loans can come back to get you if you're not careful. We don't know who made the loan, but we can guess they're seriously regretting the decision right about now.