Struggling Economy Pushes Jump in Utah Court Filings

The lagging economy appears to be driving up civil court filings in Utah.

Mortgage foreclosures and liens were up 111 percent between July and October compared to the same period last year.

A court analysis also indicates that the number of contract disputes, debt collections and property forfeiture filings are also up.

The largest increases in mortgage foreclosures were in American Fork, Provo, West Jordan, St. George, Heber and Park City.

“If you go back over the last 15 to 20 years, whenever there’s a downturn … you generally see an increase in civil filings,” said state Courts Administrator Daniel Becker.

Jillinda Bowers, president of the Salt Lake Board of Realtors, said that in Park City, many people bought homes at the peak of the market by obtaining loans for which they weren’t qualified. And in Utah County, there were “some fraudulent things going on with purchasing homes,” she said.

Many economists expect the number of foreclosures to continue climbing well into next year, she said.

Lerron Little, owner of Capstone Real Estate in Utah County, said he has seen home builders struggling with finances.

“The general perception is that builders have a large margin. But the margins are pretty thin if the value of homes drops below that margin,” Little said. “The truth is that people are struggling out there” to make house payments.

He remains hopeful, though, and says signs like declining mortgage rates could eventually allow homeowners to refinance.

Meanwhile, the court system itself is facing some belt-tightening.

The Utah Judicial Council has already reduced its budget by $3.5 million and has been planning for $4.4 million in cuts for the 2010 fiscal year.

One possible target for reductions: the state’s 18 court reporters who record what happens in high-profile court cases.