The mortgage REIT sector was one of the worst performers in the first quarter of 2020. The COVID-19 pandemic spawned extreme interest rate volatility and a crunch in the credit markets. Even REITs with government-guaranteed mortgages, which theoretically should be almost as safe as Treasuries, were buffeted by margin calls, reported decreases in book value, and announced dividend cuts.
MFA Financial (NYSE: MFA) was one of the hardest-hit stocks, as it had a lot of exposure to mortgages not guaranteed by the government. In a strong economy, that is the right bet. But in a credit crunch, it is the last place a REIT wants to be.
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Source Fool.com