According to Wikipedia: "In the United States, a mortgage note (also known as a real estate lien note, borrower's note) is a promissory note secured by a specified mortgage loan. Mortgage notes are a written promise to repay a specified sum of money plus interest at a specified rate and length of time to fulfill the promise."
So how is this 'mortgage note' any different than the financial instruments which, bought and sold freely prior to 2007, were responsible for almost taking down so many banks and losing value for so many retirement funds in the Great Recession?! Prior to the Great Recession, US mortgage-backed securities were marketed around the world. Many of these securities were backed by subprime mortgages, which collapsed in value when the U.S. housing bubble burst during 2006 and homeowners began to default on their mortgage payments in large numbers starting in 2007. Worth investigating and understanding how these 'mortgage note' investments are different/better than what collapsed the world economy not that long ago.
From a web page posted 2011: "Atlanta—If you told me five years ago that the selling of distressed notes by banks would become a virtual retail industry, I wouldn’t have believed it. Yet here we are, and business is booming. As an example of the frenzy, I recently had three different clients bidding on the same note. Pretty amazing. In multifamily alone, there are billions of dollars worth of outstanding, distressed debt. Whereas a few years ago, banks would have been more inclined to foreclose on a non-performing commercial real estate property, they are now choosing to sell the note....you can see why banks were looking for an alternative to foreclosures. Note selling has provided that alternative avenue."
It sounds like you would be buying a single note for ONE property, rather than buying a collection of many notes which are collectively owned as a single morgage-backed security...so that rather than having any 'cushion' you are fully exposed should the real estate borrower default on his mortgage! SCARY! One could end up holding a note that is theoretically worth $500K, but the owner let the property deteriorate before defaulting, so that the property declined to $200k in market value...contrats, you own $500K note where you are stuck holding the repossesed property, but you can only get $200k of cash value out of it!