Final answer:
The type of market that involves the trading of existing mortgages and the conversion of mortgages into securities is the secondary market.
Step-by-step explanation:
The type of market that involves the trading of existing mortgages and the conversion of mortgages into securities is the secondary market. In the secondary market, existing mortgages are bought and sold by investors, including individuals, banks, and financial institutions. These mortgages are often converted into mortgage-backed securities, which are then traded in the secondary market.