MFA Mortgage (NYSE: MFA) had a good trading session yesterday. A cool thing, since it's well off its recent highs. The stock closed yesterday at $7.01, having risen over 11%. What was the catalyst? Well, some bullish commentary from an analyst certainly helped out, but, for my money, the bigger news was the increase in the dividend. MFA announced a Q1 payout of $0.18 per share, which is 24% higher than the previous quarter's dividend.

This is exactly what I want to see. I'm figuring that, over time, MFA will be able to make more increases to its dividend as it benefits from further rate cuts by the Fed. Granted, MFA did choose to reduce its leverage profile, as I mentioned in a recent post. Nevertheless, this dividend increase, in my opinion, shows that this particular mREIT is a cut above many and worth holding for now. It's going to be a volatile ride, and I expect some profit-taking based on yesterday's action, especially considering the fact that the volume of shares traded wasn't overly high.

Two of my other mREIT investments, Newcastle Investment (NYSE: NCT) and CapitalSource (NYSE: CSE), also fared well in yesterday's session. Another mortgage entity I'm keeping my eye on, Annaly Mortgage (NYSE: NLY), had a good day as well. Let's hope the financials are finally stabling -- granted, many financials, such as MFA, are way off their 52-week highs, but I have to say, I liked the way the second quarter started, and I certainly enjoyed MFA's dividend change.

Disclosure: I own shares of MFA, MFA preferred, CapitalSource, and Newcastle Investment; positions can change at any time.

Without a doubt, I picked the worst possible time to buy MFA Mortgage (NYSE: MFA). Not long ago, I wrote about my desire to get in on MFA. Well, I did. And now I am paying for it, it seems.

I made a few buys between $7 and $10, starting at the high end of the range and then working down. Today, MFA got hit again; as I write this, it's trading around $6 (the low for the day so far is $5.96). My portfolio is certainly getting bloodier.

The mortgage REIT sector is having a tough time because of analyst price-target reductions and falling book values. Annaly Capital (NYSE: NLY) and Anworth Mortgage (NYSE: ANH) are feeling the heat. MFA also has been doing some reduction in terms of leverage, as this recent press release tells us. I'll be following the mnREIT story. For now, though, I'm not selling, and I think MFA is, as Merrill Ross, an analyst at Friedman Billings Ramsey, states, rather cheap at the moment (I know, I know, it can just get cheaper, can't it...).

Disclosure: Steven Mallas owns shares of MFA common and MFA preferred shares; positions can change at any time.