INVESTMENT: Market for Mortgages

Mortgages have always been hard to turn into cash. A mortgage-holder who wants to sell has to shop around among banks and real-estate brokers, often gets a poor price because of the suspicion that he badly needs cash. Harry Fromkes, president since 1949 of Manhattan's big Lawyers Mortgage & Title Co., thought there ought to be a better way. In 1952 he opened a mortgage exchange where buyers and sellers could be brought together for private negotiations, but it soon died out. Last week he tried something new: a mortgage auction.

In a rose-draped hall in Manhattan's Roosevelt Hotel, 69...

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