Mortgage REITs, or mortgage real estate investment trusts, are companies that primarily invest in mortgage loans and mortgage-backed securities. They earn income by collecting interest on these loans, which they finance through borrowing at lower interest rates. This allows them to generate profits from the difference, known as the spread. Investing in Mortgage REITs can provide investors with regular income, as they are required to distribute at least 90% of their taxable income as dividends. However, they also carry risks, including interest rate fluctuations and changes in the housing market, which can impact their profitability.