Final answer:
Mortgage REITs do not invest in mortgage loans, while equity REITs invest in real estate stocks or other equities.
Step-by-step explanation:
Mortgage REITs do not invest in mortgage loans, while equity REITs invest in real estate stocks or other equities. This statement is False.
Mortgage REITs, or real estate investment trusts, invest in mortgages and mortgage-backed securities, which are debt instruments. They earn income from the interest and principal payments made by borrowers on these mortgages. Equity REITs, on the other hand, invest in and own properties directly, such as residential, commercial, or industrial real estate.
For example, a mortgage REIT may purchase a pool of mortgages from banks or other lenders, and then collect the monthly mortgage payments from the borrowers. An equity REIT may own and operate apartment buildings, shopping malls, or office buildings, and earn rental income from tenants.