TALLAHASSEE -- Declaring his confidence in Florida's mortgage-broker system "shaken, " Gov. Charlie Crist gave the state's top loan regulator two weeks to come up with a plan to toughen licensing standards for mortgage brokers.

The governor also asked his own inspector general to investigate the Office of Financial Regulation -- the agency that licenses mortgage brokers -- which has been under fire since a Miami Herald series revealed thousands of former criminals were able to peddle home loans in Florida.

The three other members of the Florida Cabinet voted in favor of the measures at their meeting Tuesday.

"It's clear to me that we need to take action, " Crist said. "People count on us and expect us to do something."

Still undecided is the fate of the top regulator, OFR Commissioner Don Saxon. Chief Financial Officer Alex Sink -- the Cabinet's lone Democrat -- and two statewide consumer groups have called on Saxon to resign.

Crist and the other Cabinet members, Attorney General Bill McCollum and Agriculture Department Commissioner Charles Bronson, have said theyll withhold judgment on Saxon until the probe is complete.

Saxon defended his agency at the meeting, saying The Miami Herald exaggerated problems at his office. "Unlike what's been reported in the media, we do not have a systemic problem of licensing felons, " Saxon said.

'MANY ... PROBLEMS'

Sink countered his remarks, saying she's aware of breakdowns at the agency that go beyond what Saxon has acknowledged. "I happen to believe, and have been told, that there are many systemic problems with the licensing operations, and the enforcement operations, at the OFR."

The Miami Herald's investigation showed the agency allowed more than 10,000 people with criminal backgrounds to sell home loans in Florida, including bank robbers, racketeers and cocaine traffickers.

More than 4,000 of those passed OFR background checks despite criminal records, with most committing crimes that state law specifically required the agency to screen -- fraud, dishonest dealing and crimes of "moral turpitude." Convicted criminals went on to steal at least $85 million from consumers and lenders, the newspaper found.

Florida now has the highest mortgage-fraud rate in the nation.

'SECOND CHANCE'

The governor said during the meeting he wants the state to "be cautious and exercise a degree of compassion" for license applicants whose prior crimes have no bearing on their ability to act as trustworthy stewards.

"When it doesnt relate to something of a pecuniary, or financial arena, we need to give people a second chance, " Crist said.

McCollum said he doesnt think barring people with prior financial crimes goes far enough, calling for a five- to seven-year ban on all felons obtaining licenses as mortgage brokers, Realtors, bankers or others who handle personal financial data.

He noted that Scott Almeida, a mortgage broker highlighted in The Miami Herald series who fleeced 30 victims out of nearly $3 million, had been convicted of cocaine trafficking.

"To take a cocaine trafficker and give him a license to be a mortgage broker, I dont think its any safer than somebody who is convicted of mortgage fraud, " McCollum said.

McCollums office successfully prosecuted Almeida, but only after police took over a botched investigation by Saxon's agency, The Miami Herald found. The agency failed to act on two separate complaints that Almeida and his boss were lying on loan applications and stealing money from their clients.