The old victims' fund was financed by a portion of mortgage broker license fees.

Regulators have continued to collect the money but have not compensated a single victim since 1997, the newspaper found.

GUARANTY FUND

The new bill proposes creation of a Mortgage Brokerage Guaranty Fund that would pay victims if they successfully sue their mortgage broker but can't collect because the broker becomes insolvent.

Each borrower would be eligible for up to $50,000. If there were multiple claims against the same broker, payouts would be capped at $250,000.

All states are required to come up with a program to help compensate victims of mortgage fraud under the new federal law. But there are several options, including requiring brokers to buy insurance to cover fraud and making brokers show a minimum net worth.

Experts say guaranty funds are the most stringent and reliable because they collect money from brokers upfront, when they pay for their license.

David Bruns, spokesman for AARP Florida, one of the largest consumer groups in the state, said they'll push for a victims' fund.

''We regard this as a critical issue,'' Bruns said. ``The fact of the matter is, the mortgage crisis and mortgage fraud is still a critical problem in Florida. If anything, it has gotten worse.''

But Ritch Workman, president of the Florida Association of Mortgage Brokers who won a seat in the Florida House in November, is wavering on a campaign pledge to push for the fund.

The Melbourne Republican said lawmakers are leaning toward requiring brokers to buy bonds instead.

''What I want to do is dig deeper into bonding and see what that entails before I make a decision on whether I will stick to my guns on the guaranty fund,'' Workman said.

Sink said she supports the creation of a victims' fund.

The state's latest proposals also contain language that would ban mortgage brokers from peddling some of the most toxic types of loans that became common during the land boom.

They would be barred from selling adjustable-rate loans with penalties built in to prevent borrowers from refinancing, and loans where the borrower actually owes the lender more money with each passing month.

Thomas Morcom of the Florida Association of Mortgage Brokers said banning particular loan types may face opposition because the law would not apply to federally chartered banks.

LIMITS ON CHOICES?

''That wouldn't limit those products,'' Morcom said. 'Instead, it would just limit consumers' choice to get those products.''

While the proposals won't be considered by lawmakers until March, the Office of Financial Regulation's Straub, who helped write the bill, warned the industry that drastic change is on the way.

''Everybody we've talked to indicates they understand the need for these things,'' he said. ``Thirty years ago, the industry was different and it wasn't necessary. Now it is.''