Mortgage REITs slumped along with the rest of the U.S. stock market Monday, falling as much as 12% in late trading as a broad sell-off by investors followed Standard & Poor’s downgrade of the United States’ credit rating on Friday. Newcastle Investment Corp. (NCT) experienced the steepest slide in a basket of 23 mortgage REITs tracked by Housing Wire, falling more than 12%. The New York-based company, which invests in agency debt as well as commercial mortgage-backed securities, was hit by a double whammy after it said Friday its second-quarter net income fell to $98 million, or $1.23 a share, from $118 million a year earlier. Arbor Realty Trust (ABR), based in Uniondale, N.Y., was also hammered by investor pessimism, sliding 7.9%. Even REITs with strong second-quarter performance, like PennyMac Mortgage Investment Trust (PMT), which saw earnings for the three months ended June 30 jump 126% from a year earlier, suffered from the stampede to sell. Write to Liz Enochs.