After Annalea Mace’s employer reduced her hours two years ago, Ms. Mace and her husband pared their spending, sold jewelry on eBay and cashed in savings bonds she received at age two. That still wasn’t enough, so the couple went to the bank in hopes of saving their house from foreclosure.

In June, Webster Financial Corp.’s Webster Bank shrank the monthly payments on their $295,000 mortgage by 17% to $1,585, lowered the interest rate and lengthened the loan’s term. “It brought tears to my and my wife’s eyes,” says James Mace.

Such praise is rare for the nation’s mortgage companies, which have struggled to work with delinquent borrowers. The largest servicers were forced earlier this year by the U.S. government to beef up their operations. Banks and government officials continue to meet in their effort to negotiate a settlement to the state and federal investigation of questionable foreclosure practices, which is likely to result in further changes.

In contrast, Webster, a regional bank based in Waterbury, Conn., with 176 branches in four states, has been the subject of just 16 complaints about loan workouts and foreclosures since 2006, based on the Connecticut Department of Banking, which calls that “a very small number.”

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