Last year was awful for the mortgage sector as the Fed bumped up interest rates to get inflation back under control. Mortgage originators suffered as volumes declined and mortgage real estate investment trusts (REITs) saw their holdings underperform Treasuries, which led to declines in book values.

The worst of the situation seems to be over, as mortgage-backed securities are outperforming Treasuries again. Annaly Capital Management (NYSE: NLY) is one of the best-run mortgage REITs out there, but the current high dividend yield should be viewed with caution. Here's why.

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Source Fool.com