Florida, now saddled with the nation's highest level of mortgage fraud, once offered a program to reimburse people scammed by rogue mortgage brokers -- the money coming from licensing fees.
Today, those fees total $24.7 million -- but victims of mortgage fraud can't get a penny of it.
State regulators killed the victim program with no public debate more than a decade ago -- despite warnings that mortgage fraud was on the rise -- leaving borrowers in Florida among the most vulnerable in the country, The Miami Herald found.
While 47 states have protections for people who are scammed, including guaranty funds and insurance that covers fraud, Florida has no such provisions.
That means thousands of people fleeced by mortgage brokers are left to fend for themselves, despite millions of dollars in the state's regulatory trust fund -- money that goes to cover salaries and benefits for regulators, including trips to conferences at five-star resorts.
"You're telling me the state no longer pays people if they're defrauded? I think it's deplorable, " said Gerald Linker, one of the last to collect from the fund a decade ago when he was ripped off by his mortgage broker.
Linker won a court judgment against the broker, but couldn't collect because the broker had disappeared. So he turned to the state to collect $20,000 in 1997.
Even industry leaders, whose members typically pay higher licensing fees to states that reimburse fraud victims, support the protection funds.
"If you want to have something that in a relatively short period of time can help consumers, " said Marc Savitt, president of the National Association of Mortgage Brokers, "the best way to do that is a guaranty fund."
While other states have been creating programs to help mortgage fraud victims recover lost money, Florida has never tried to revive the reimbursement fund, even though the state agency is flush with a surplus of millions.
Florida now accounts for one of every four fraudulent mortgage applications in the country, according to the Mortgage Asset Research Institute.
The fraud rate has continued to climb in recent years, with thousands of borrowers gouged with illegal fees or duped into signing away the deeds to their homes.
Mary Taylor, 63, of Brandon, fell victim to a broker who promised to help her use the equity in her house for badly needed renovations, then stole $22,000 in loan proceeds. Taylor, who recouped $7,000 from the lender, said she would apply for state funds to help recover the rest.
"They could refund what I lost; I wouldn't want a dime more, " she said.
When Florida's fund was created in 1977, then-state Comptroller Gerald Lewis called it "a necessity in order to provide more effective regulation and to prevent future losses to Floridians."
As consumers and their lawyers learned of the fund, the number of claims increased over the years. It paid out $43,749 in 1978. As mortgage fraud took off in the late 1980s, so did payouts from the fund, rising to $555,195 in 1990 and more than tripling to $1.8 million in 1991.
In 1990, a task force convened by the Legislature reported to Comptroller Lewis that there were serious problems with the fund. Worst of all, it was running out of money.
The rules also forced victims to hire a lawyer and go through the expense of a civil suit before filing a claim, which favored investors and borrowers who could afford to hire attorneys.