Over the past few months, popular mREITs -- mortgage real estate investment trusts, that is -- have been pummeled in the markets.
For these mREITS, the market has ignored the rebounding real estate market, the explicit backing of Fannie Mae (FNMA -4.56%) and Freddie Mac (FMCC -3.46%) by the U.S. government, strong performances from mortgage originators this year, and the impressive dividends offered by leading companies like American Capital Agency (AGNC 0.77%), CYS Investments (NYSE: CYS), and Hatteras Financial (NYSE: HTSI).
To understand what's driving this sector ever lower, Motley Fool contributor Jay Jenkins dives into the most basic question for mREITs: How do they actually make money?
The answer is fundamentally simple, but the nuance becomes complex when analyzing the future of these company's dividends.