A Mortgage REIT (Real Estate Investment Trust) is a company that primarily invests in mortgage loans and mortgage-backed securities. Unlike traditional REITs that own physical properties, mortgage REITs provide financing for income-producing real estate by purchasing or originating mortgages. They earn income from the interest on these loans, which they typically pass on to shareholders as dividends. Mortgage REITs can be categorized into two types: equity REITs, which own properties, and mortgage REITs, which focus on mortgages. Investors are attracted to mortgage REITs for their potential to generate high yields, but they also come with risks related to interest rate fluctuations and market conditions.