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 (NASDAQOTH:FNMA) and Freddie Mac (NASDAQOTH:FMCC) by the U.S. government, strong performances from mortgage originators this year, and the impressive dividends offered by leading companies like American Capital Agency (NASDAQ:AGNC), CYS Investments (NYSE:CYS), and Hatteras Financial (UNKNOWN:UNKNOWN)

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.

Fool contributor Jay Jenkins has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.