Mortgage REITs earn income from the interest they are paid and fees generated. This net income is generated from the excess of their interest and fee income and their interest expense and administrative fees.
The other kind of real estate investment trust—called an Equity Reit—takes an ownership position in real estate, as opposed to acting as a lender. Some REITs, called hybrid REITs, take equity positions and make mortgage loans.
| Mortgage Pool, Mortgage Modification | |
| Mortgage Servicing, Mortgage-Backed Certificate |
Dictionary of Finance and Investment Terms. Copyright © 2010 by Barron's Educational Series, Inc. All rights reserved.
