A mortgage bond is a debt offering that is secured by the issuing entity's real estate or equipment. If the issuer defaults on the bond, the property collateral is paid over to the bond holders. This extra level of security for the bond investor usually leads to a lower effective interest rate on the bond.
A variation on the concept is when a bond is backed by a pool of real estate mortgages. Investors in the bonds have rights to the cash flows from the pool.