Income Sources of Mortgage REITs

Consider the following scenario: Alice is analyzing various real estate investment options for her client, who is particularly interested in Real Estate Investment Trusts (REITs). She comes across two different types of REITs: Equity REITs and Mortgage REITs. Alice needs to determine the primary income source for each type of REIT in order to provide sound investment advice.

Equity REITs primarily buy and operate income-producing real estate, while Mortgage REITs invest in mortgage loans and mortgage-backed securities. Understanding the fundamental differences in their income sources is crucial for portfolio diversification and risk assessment.

Based on this information, what is the primary source of income for Mortgage REITs?