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MERRILL LYNCH & CO.                                               Exhibit (a)(4)
World Financial Center
South Tower
New York, New York  10281-1326


                          CAPSTEAD MORTGAGE CORPORATION
                           OFFER TO PURCHASE FOR CASH
                     UP TO 5,000,000 SHARES OF COMMON STOCK
                     AT A PURCHASE PRICE OF $12.75 PER SHARE

THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON FRIDAY, MARCH 16, 2001 UNLESS THE OFFER IS EXTENDED.

To Brokers, Dealers, Commercial Banks,                        February 16, 2001
Trust Companies and Other Nominees:

         Capstead Mortgage Corporation, a Maryland corporation ("Capstead"), has
appointed us to act as the Dealer Manager in connection with its offer to
purchase for cash up to 5,000,000 shares of its common stock, par value $0.01
per share, at a purchase price of $12.75 per share, net to the seller in cash,
without interest, upon the terms and subject to the conditions set forth in its
Offer to Purchase, dated February 16, 2001, (the "Offer to Purchase"), and in
the related Letter of Transmittal which, as amended and supplemented from time
to time, together constitute the "Offer."

         All shares properly tendered at or before the "Expiration Date" (as
defined in Section 1 of the Offer to Purchase), and not properly withdrawn, will
be purchased by Capstead, net to the seller in cash, without interest, upon the
terms and subject to the conditions of the Offer, including the Odd Lot and
proration provisions thereof. See Section 1 of the Offer to Purchase. Shares not
purchased because of proration will be returned at Capstead's expense to the
stockholders who tendered such shares promptly after the Expiration Date.
Capstead reserves the right, in its sole discretion, to purchase more than
5,000,000 shares under the Offer, subject to applicable law.

         If, at the Expiration Date, more than 5,000,000 shares, or such greater
number of shares as Capstead may elect to purchase, are properly tendered and
not withdrawn, Capstead will, upon the terms and subject to the conditions of
the Offer, accept shares for purchase first from "Odd Lot Holders" (as defined
in Section 1 of the Offer to Purchase) who properly tender all of their shares
on a pro rata basis from all other stockholders whose shares are properly
tendered and not properly withdrawn.

         THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 7 OF THE OFFER TO PURCHASE.

         For your information and for forwarding to those of your clients for
whom you hold shares registered in your name or in the name of your nominee, we
are enclosing the following documents:

         1.       The Offer to Purchase dated February 16, 2001;

         2.       Letter to Clients which may be sent to your clients for whose
                  accounts you hold shares registered in your name or in the
                  name of your nominee, with space provided for obtaining such
                  clients' instructions with regard to the Offer;

         3.       Letter of Transmittal for your use and for the information of
                  your clients (together with accompanying instructions and
                  Substitute Form W-9);

         4.       Notice of Guaranteed Delivery to be used to accept the Offer
                  if the share certificates and all other required documents
                  cannot be delivered to the Depositary before the Expiration
                  Date or if the procedure for book-entry transfer cannot be
                  completed on a timely basis or time will not permit all the
                  required documents to reach the Depositary before 12:00
                  Midnight on Friday, March 16, 2001; and
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         5.       Guidelines of the Internal Revenue Service for Certification
                  of Taxpayer Identification Number on Substitute Form W-9.


         YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER, PRORATION PERIOD AND
WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON, FRIDAY,
MARCH 16, 2001, UNLESS THE OFFER IS EXTENDED.

         No fees or commissions will be payable to brokers, dealers, commercial
banks, trust companies or any person for soliciting tenders of shares under the
Offer other than fees paid to the Dealer Manager and the Information Agent, as
described in the Offer to Purchase. Capstead will, however, upon request,
reimburse you for customary mailing and handling expenses incurred by you in
forwarding any of the enclosed materials to the beneficial owners of shares held
by you as a nominee or in a fiduciary capacity. Capstead will pay or cause to be
paid any stock transfer taxes applicable to its purchase of shares, except as
otherwise provided in the Offer to Purchase and Letter of Transmittal.

          In order to take advantage of the Offer, a properly completed and duly
executed Letter of Transmittal, or a manually signed facsimile thereof,
including any required signature guarantees and any other required documents
should be sent to the Depositary with either a certificate or certificates
representing the tendered shares or confirmation of their book-entry transfer
all in accordance with the instructions set forth in the Letter of Transmittal
and the Offer to Purchase.

         Holders of shares whose certificate(s) for such shares are not
immediately available or who cannot deliver such certificate(s) and all other
required documents to the Depositary or who cannot complete the procedures for
book-entry transfer before the Expiration Date must tender their shares
according to the procedure for guaranteed delivery set forth in Section 4 of the
Offer to Purchase.

         Any inquiries you may have with respect to the Offer should be
addressed to Corporate Investor Communications, Inc. or Merrill Lynch & Co. at
their respective addresses and telephone numbers set forth on the back cover
page of the Offer to Purchase. Additional copies of the enclosed material may be
obtained from Corporate Investor Communications, Inc., telephone number: (866)
241-2782.

                                        Very truly yours,


                                        MERRILL LYNCH & CO.


         NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE
YOU OR ANY OTHER PERSON AS AN AGENT OF CAPSTEAD, THE DEALER MANAGER, THE
INFORMATION AGENT OR THE DEPOSITARY OR ANY AFFILIATE OF THE FOREGOING, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON
BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS
ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.


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