You've heard a lot of talk lately about Utah's improving economy, but talk is not legal tender. On the other hand, three Utah mortgage bankers are doing more than talking, they're betting the farm on the state's improved prospects.

Calvin P. Gaddis, Paul S. Gardner and Nadine R. Will have, in association with M. Walker Wallace and Haydon M. Calvert, acquired Wallace Associates Finance Group - one of a number of operating companies of well-known real estate firm Wallace Associates - and formed Commercial Mortgage Associates, a new company that will specialize in arranging and servicing loans for commercial building projects. Gaddis will serve as chairman of the new firm, Gardner as president and Will as vice president."We think there is a turnaround on the horizon for property in our market area," said Gaddis, noting that the "area" includes neighboring states as well as Utah.

"We see Utah changing. Market forces are at work that are attractive. It hasn't happened yet, but we think it's on the horizon," he said.

While interest rates are currently unattractive, Gaddis and his associates expect to see them go down. "And when they do, I think there will be a lot of refinancing."

Traditionally, mortgages for commercial properties have been taken out for 30 years, much like residential loans. But that has changed in the 1980s, said Gaddis. With loans as short as five years not uncommon today, many developers are facing hefty "balloon" payoffs that will require refinancing. Commercial Mortgage Associates (CMA) intends to be ready for that action.

According to Gaddis and his two associates - all of whom were formerly with Wallace Associates Finance Group - there is an "interesting" amount of so-called "built to suit" construction currently going on in Utah and neighboring states, all of which needs to be financed.

"We have some very broad contacts with lenders across the country," said Gaddis. "The lenders we propose to deal with are mostly medium to smaller-sized life insurance companies." He said most larger companies have loan minimums too large for the typical Salt Lake City project.

"We will do the occasional $5 million, $10 million and even $20 million project, but mostly they will be in the $500,000 to $4 million range," said Gaddis." The company is also licensed in real estate and will, on occasion, be involved in sales.

Gaddis said the firm has no current intention of developing or investing for its own account. The principals brought the Wallace Associates portfolio with them to the new company and Gardner and Will brought the portfolio from now-defunct Baird and Warner after they joined Wallace in October 1987.

According to Gaddis, the only developers still left in business in Utah are the good ones, the rest having long since gone under, along with the tax shelter promoters.

Gaddis said he doesn't believe we will see a return of the high-flying development days of the '70s and early '80s in Utah when some financial institutions "were lending money like drunken sailors on improper projects that were not feasible." The market has become too sophisticated for that.