We have seen this sort of thing before in US History. The end of the Victorian Era resulted in many mansions being recast as multifamily homes. Even our founding fathers were not immune. Thomas Jeffersons estate had to be sold after his death due to his estate having 2,000,000 in debts.In 1990 self-made media billionaire,John Kluge, and his third wife, Patricia, called their marriage quits.  The divorce settlement broke records, which perhaps is not all that surprising since Kluge was, with a$5 billion empire, the world’s wealthiest man that year.  (For more on Kluge, check out my colleague Clare O’Connor’s coverage here)

Patricia Kluge walked away with alimony payments of $1.6 million per week (the interest accrued on one billion dollars per year at the time).  But she also snagged some prime real estate: a hunting lodge in the Scottish Highlands valued then at $20 million and an opulent 45-room Virginia estate called Albemarle.

Last week a new owner took possession of the grand Virginia estate: Bank of America.   The bank giant “bought” the eight bedroom, 13 bath, 19th century-inspired mansion Wednesday morning on the Charlottesville courthouse steps.  It was the top bidder in a foreclosure auction.

The unceremonious handing off of Albemarle came about after Bank of America, Kluge’s creditor for the property, filed a foreclosure lawsuit last month alleging that the socialite – who hosted everyone from former presidents to international royalty at the estate – had defaulted on $23 million in loans.

The bank took ownership for the highly discounted price of $15.26 million.

While distressed sales tend to be the purchasing extravaganzas of bargain hunters’ dreams, offering foreclosed upon homes at drastically reduced prices, Albemarle’s sale takes the term discount to new extremes.

Echoing other recent foreclosure tales of the rich and famous, the 300 acre (give or take) estate, built by the Kluges in 1985, first hit the market in 2009 for $100 million.  That extravagant number quickly dropped down to a more humble $24 million, which is where it stayed listed until midnight before the auction.  Sotheby’s International Realty had the listing.

The Neo-Georgian mansion, which Sotheby’s described as both “one of the most important residences created in the United States” and “one of the best known homes,” boasts a wine cellar and grotto, a media room, outdoor kitchen, fitness room and steam room — even a helipad.  The surrounding acres had everything from a guest house to riding stables and a barn. No buyer.

Kluge stopped making her loan payments three months ago and went into default.  Bank of America began the final steps of the foreclosure process in January and an auction was scheduled. Albemarle’s subsequent unceremonious sale  put ownership officially in the hands of Bank of America, at a discount of almost 85% off the initial market valuation.

Real estate billionaire Donald Trump has been rumored to have interest in the estate — as well as the hundreds of acres surrounding it which also once belonged to the financially devastated Kluge.   His representatives bowed out of the auction, but said that The Donald holds a “right of first refusal” to consider buying the land in the future, according to The Washington Post.

Albemarle is the latest distress sale affiliated with Virgina’s society maven, who until recently was also a celebrated wine maker. (Kluge Estate Winery and Vineyard wines graced the tables of Chelsea Clinton’s wedding last year.)  Last June, Sotheby’s Auction House hosted an estate sale of her jewelry, furniture and art, pulling in millions of dollars to pay off creditors.  In December, Farm Credit Bank repossessed Kluge Estate Winery and Vineyard in auction, after failed business plans for the vineyard and its  surrounding property, which Kluge and current husband William Moses planned to subdivide, develop and sell as a real estate venture, caused Kluge to relinquish ownership.

Lenders like Bank of America have millions of repossessed homes on their books.  High end homes likes Albemarle are the types of properties banks like to avoid taking ownership of.  They tend to pose more difficulties in reselling because the potential buyer pool is incredibly limited.  And until resale occurs, properties like Albemarle are costly to keep since they rack up high property taxes and hefty maintenance bills.

Even so, the foreclosure crisis is trickling up into the luxury end of the market.  Celebrities and high net worth home owners have not been excluded.  Everyone from Nicholas Cage to Julius “Dr. J” Erving to Sergei Fedorov have faced foreclosure law suits and distressed auctions in the past year.