Actor Michael Madsen's 3,424-square-foot oceanfront house in Malibu, Calif. has been foreclosed, and his lender is selling it for $7,800,000, which is more than $2 million less than the 49-year-old actor was asking for it back in May, when he made a last-ditch effort to sell the house.

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The sad story involves Madsen's former five-bedroom house at 31504 Victoria Point Road in Malibu, which he purchased in 1999 from actor Ted Danson's "Edward Bridge Danson III Family Trust." Danson even was the lender for Madsen's original loan/mortgage on the property. Back on May 17, we wrote about Madsen's urgent, $9,950,000 listing for the house, which is on a gated street at Trancas Point. At the time, Madsen's listing information initially had used the phrase "expedient sale necessary," and said that it needed to close escrow by May 16 or possibly May 30, 2007 with a "fully executed purchase contract in hand and ALL contingencies removed." After May 16, the listing information dropped specific dates and merely referred to the requirement of an "expedient sale."

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Despite a steady stream of acting credits, Madsen must be having some serious financial problems (perhaps financial mismanagement? Bad investments? An incompetent money manager?). Last year, he quit-claimed the house to a company that he owns called LA Speciality (sic) Properties, LLC, presumably to escape personal liability for not being able to make mortgage payments. That action occurred just before a scheduled foreclosure sale for the house on Feb. 24, 2006. Unfortunately, Madsen was not able to stave off foreclosure this time around.

Built in 1976 by the late Keith Moon of the rock band the Who, Madsen's former Cape Cod-style house has four baths, a sunroom, hardwood floors, vaulted beamed ceilings, ocean views, an open patio and a sauna, according to listing information. Check out the current listing sheet for the house here and take a look at the property's own website here.

Kudos to the Real Estalker for spotting the listing and posting an item on it on Wednesday. And we will keep you posted on where Madsen ends up.