ATLANTIC CITY, N.J. — NCUA Associate Region II Director for Operations Herb Yolles told New Jersey credit unions today that NCUA examiners are going to on the lookout for five particular problems.

First, he noted during the N.J. Credit Union League's Reality Check conference that 10% of mortgages are at least 30 days delinquent. And, Yolles pointed to a "shadow" foreclosure market highlighted in The Washington Post. According to the report, five to seven million properties are backlogged in the system, which could take three years to unload, and another 11 million are underwater, which are the most likely to default. At the same time, Yolles stated, "Keep in mind, NCUA's paid to worry."

Second on his list of items for scrutiny was indirect lending. Credit unions do not realize the planning, review and risk management necessary to run a successful program, Yolles said.