Recent data from the Mortgage Bankers Association suggests that even as the housing finance system struggles to process the millions of distressed properties across the country, the number of properties in danger of entering that process is shrinking.

The seasonally adjusted delinquency rate for mortgage loans on one-to-four-unit residential properties fell to 7.99% in the third quarter of 2011, according to data from the MBA's National Delinquency Survey. This is the lowest level recorded since the fourth quarter of 2008, the association said.

This even as the numbers of foreclosed properties continued to rise.