Wholesaling a note ? Is this a thing ?

[Michael Junior]

So my cousin is a lender, had a client call him. She has a property in Oregon, she bought with a hard money lender. I'll keep it short. Basically she is in default with the hard money lender, he wants to foreclose on the property this Friday. She wanted my cousin to try to refi her out of this deal in a week which we all know is impossible through fannie or freddie , the hard money lender will not give her any more time to do so and is proceeding with the foreclosure. He will sell us the note for $425k, the home just got appraised for $617,000. 

Not sure if this is a thing,  we are not note investors and not skilled in this. But in my head if we pick up the note for $425k would it make sense for a seasoned investor to pick it up from us for $475-$500k? Or is this a stupid play? 

Side note: She is willing to rent back, and has two tenants in place renting by the room that are current and she has the proof of income. Any thoughts or ideas would be appreciated !