It's safe to say that fear is dominating the mortgage REIT sector, with shares of Annaly Capital Management (NYSE:NLY) and American Capital Agency (NASDAQ:AGNC) down by double digits since the beginning of the year. To a certain extent, the fear is warranted given what's happened to these companies' book values; both are off by 20% year to date. At the same time, there's an argument that these companies' current discounts to book value are excessively pessimistic -- shares of both are trading for 0.84 times book value. If this is the case, then investors may want to consider establishing a position.

In the video below, Motley Fool contributor John Maxfield delves into this question, particularly as it relates to Annaly Capital Management. As John explains, even though he's not a big fan of the mREIT's management team, it's hard to deny that the current sentiment around these companies as well as their valuations are otherwise strong "buy" signals.

John Maxfield 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.