Rules governing when people can be moved through foreclosure could soon tighten for Bank of America, Wells Fargo and three other large U.S. mortgage servicers involved in a massive legal settlement with state attorneys general.

At issue is a concept called dual-tracking, where homeowners are pushed toward foreclosure while still working with their bank to stay in their homes.

Last year’s $25 billion settlement was supposed to eliminate the practice. But after push-back from banks and industry groups, the settlement’s final rules ultimately gave banks leeway in many cases to schedule foreclosure dates while homeowners still scrambled to get their loans modified.

The Observer brought the discrepancy to light earlier this year. The newspaper found that banks had been sending foreclosure notices and scheduling court hearings and eviction dates, while homeowners in North Carolina and around the country were still filing paperwork for a loan modification.

The issue has since garnered the attention of federal agencies and attorneys general involved in the settlement.

“The banks are not doing enough under the current rules of the settlement,” Housing and Urban Development secretary Shaun Donovan said on a conference call with reporters.

Iowa Attorney General Tom Miller said Wednesday that he and his colleagues have been in discussions with two major banks on tighter rules that would force banks to stop foreclosure proceedings earlier in the loan modification process. He didn’t identify the banks.

“It’s the kind of thing that we’re talking about and working with the banks to make this agreement better,” he said on the conference call.

The existing rules require banks to halt foreclosure proceedings once a completed loan modification application is submitted, with all the proper paperwork. Banks have been criticized for improperly asking for more documents when they don’t need to.

The proposed new rules would give people protection against dual tracking earlier in the process.

Dunn: 704-358-5235 Twitter: @andrew_dunn