Winning Bid Lower than Openning Bid by over 200K!!

I am a broker here in CA. I am representing a buyer on a property for around $450K. The seller bough the property at a trustee sale a month ago for about $215K. The foreclosing loan on the property at the time of trustee sale was around $490K.

Can someone explain how the seller managed to get this great deal at the auction so he could flip it in a month for $200K profit?

My feeling is fraud or collusion. right?

I think you mean winning bid lower than “published” bid not opening bid. Published bid is total debt at the time the notice is filed, where as bidding starts at the opening bid (so technically impossible for winning bid to be lower).
Not unusual at all to have opening bids lowered by 50% of more from the amount due on the loan these days. What’s unusual here of course is that the winning bid is so far below market value. Lenders do make mistakes and open their bids way to low sometimes, but you are right that usually the competition at the steps bids it back up to a 15-30% discount from market. Still things happen from time to time - 2 auctions happening at once and everyone is paying attention to the other auction for example. If you’ve ever been to the steps you know that it can be pretty crazy at times trying to follow everything.
We do still hear of complaints of collusion occasionally, but given how many people are standing around at most auctions now, how easy it is for everyone to see winning bids, and the legal consequences it is hard for us to imagine anyone being that stupid at this point.

He may have bought a 2nd with a first due for $150k or more…perhaps lots of back taxes? He would be a mighty lucky man to buy it at 50% discount.

Great point. Could have been a second. We saw a property that looked good the other day and it had $30k in back taxes. A friend bought one years back that had extensive fire damage. There are certainly many reasons that could have made it a marginal deal even at what appeared to be a giant discount. Hopefully not, and he got one of those rare deals that make all the trouble on your average deal a bit more worthwhile.

That’s exactly what I did. I bought a second for $100k and refinance out the first (250k). But the property profile only show the $100k. I got all kind of stuffs from r/e agents when I listed the property for sale. The former owner was a lawyer. We when to trial to evict him. It was not an easy flip.