The financial fallout from a spate of corruption inquiries is beginning to hit crooked former Labor powerbroker Eddie Obeid.

The Obeid family mansion, Passy, one of the grandest houses in Hunters Hill, is understood to have been quietly put on the market with an initial asking price of $10 million.

In addition, the Obeid family recently took out two loans. The first was a three-month loan for $300,000 with an interest rate commencing at 20 per cent and rising to 25 per cent for late payments. The family has also borrowed $3.4 million for a 12-month period, at an interest rate of between 8.95 and 12.95 per cent. Passy has been used as security for the loans.

The Obeids have had trouble borrowing money from more traditional financial institutions. Mr Obeid is now being referred to in banking circles as a PEP (Politically Exposed Person) and because of referrals to the Tax Office and the NSW Crime Commission, he is considered to be a high credit risk.

The money has been loaned by Taree lawyer Raymond Stack and his son Paul, who are well known as lenders to those suffering financial distress. Ray Stack's personal super fund, RTS Super, made the short-term loan to the Obeids.

The loans were witnessed by Sevag Chalabian, a solicitor previously retained by the Obeids to hide their interest in the corrupt Mount Penny coal deal.

The funds have been borrowed by the family company Obeid Corporation as trustee for The Obeid Family Trust Number 1.

Only two years ago the Obeid family was awash with cash as the $30 million from the Mount Penny Coal deal landed in the coffers of the Obeid Family Trust Number 1.

The Independent Commission Against Corruption heard that the family's ill-gotten gains funded luxury cars, house purchases and the lavish lifestyles of Mr Obeid, his wife Judy and the couple's nine adult children.

This week Fairfax Media revealed that the Obeids have refused to pay $750,000 to their solicitors Colin Biggers & Paisley who represented Mr Obeid's son Moses over his $16 million debt to the City of Sydney.

The former ALP kingpin was recently knocked back for more taxpayer funding for the current corruption inquiries. After boasting to counsel assisting at the previous ICAC inquiry that he had ''spent more money than you have made in a lifetime'', Mr Obeid's lawyers argued that it was in the public interest to provide more legal assistance to Mr Obeid as the fresh hearings would cause their client ''significant burden'' and ''hardship''.

Not long after Mr Obeid was made fisheries minister in 1999, his wife bought Passy for $2.9 million. The magnificent sandstone mansion, set on 4200 square metres, was built in 1850 as the residence for the French consul.

Only last year Mr Obeid and his wife were planning a $2.25 million renovation. Their plans included: ''Demolition of existing pool, proposed rectangular pool located further away from Passy … amend dumb waiter to passenger lift to improve accessibility from car park, increase in size of underground car park from eight car spaces to nine car spaces and improve manoeuvrability within car park including a vehicle turn-table.''

Hunters Hill locals have told Fairfax that although the asking price for Passy is $10 million, real estate agents have told prospective purchasers that the house is rundown and that a more realistic figure is between $6 and $7 million.

Obeid Falls On Hard Times