Mortgage REITs borrow short-term or adjustable-rate money (the federal funds rate has plunged from 6.5% in January to 3.5% today) and use it to buy longer-term mortgages or mortgage-backed securities, playing the spread between the two sets of interest rates.
Difference in leverage, borrowings (short duration vs. long duration), asset holdings (adjustable mortgages vs. long-term mortgages), and hedging strategies are the main differences among the Agency Mortgage REITs, who number less than a dozen names.