Here is my understanding of what is going on in the Commercial Note world. Banks are now selling a number of their non-performing commercial property notes to investors to raise cash.  With the credit crunch they are unable to sell them to other banks (those banks are trying to maintain/raise cash also) so individual investors are their only option.

For now they are tapping investors they already know. People they have sold notes to in the past and large depositors in their banks as they are trying to keep this activity as quiet as they can. We expect that this activity will get more attention at the end of January or beginning our February as their small circle of investors exhaust their capacity to buy.

The notes will be marketed more broadly in February to tap into the larger general pool of investors.

What happens then? The note holder can either renegotiate the loan repayment terms with the property owner or foreclose on the property. I expect that (as long as the investors are getting the notes at a good discount) there will be a lot of renegotiating of debt service payments. The Note holder still makes good money and the property owner has a note they can afford.