After months of stinging criticism for letting crooks and con artists prey on Florida borrowers, regulators have proposed sweeping changes in state law that would make Florida one of the most tightly regulated mortgage markets in the country.

The provisions call for annual criminal background checks for everyone selling mortgages in Florida, a ban on the most toxic types of loans and reviving a state fund that used to compensate victims of mortgage fraud.

The fund would provide up to $50,000 for people who can prove they were scammed by rogue brokers. Regulators quietly killed a similar fund more than 10 years ago, then used the money to pay for operating expenses, like salaries and conferences at five-star hotels, The Miami Herald reported in September.

Terry Straub, finance director for the Office of Financial Regulation, which is drafting the new bill, said restoring the fund is ``the equitable thing to do.''

The measures would add to a regulatory overhaul that began in September after a Miami Herald investigation showed the agency allowed more than 10,000 people with criminal records to work in the mortgage profession between 2000 and 2007.

The Florida Cabinet imposed emergency rules, including a lifetime ban on anyone convicted of a felony involving fraud or financial wrongdoing.

The latest proposals -- making the emergency rules harder to undo -- will be debated when the legislative session begins in March. But many of the changes already have the support of top elected leaders.

''We are looking for more of an enforcement mentality,'' said state Chief Financial officer Alex Sink, who joined with Gov. Charlie Crist in forcing the state's top mortgage regulator to resign in response to the newspaper series.

The Miami Herald found that thousands cleared criminal background checks despite committing crimes state law specifically required regulators to screen, including fraud, bank robbery, racketeering and extortion.

In addition, more than half the criminals selling mortgages during the land boom -- 5,306 -- were not subject to any background check. In fact, the state refused to license and screen them for years, despite repeated pleas from industry leaders.

In their new bill, state regulators are pushing to screen and license everyone.

STRICTER THAN FEDS

The proposals -- which reach far beyond a federal mortgage law passed last summer -- also would require fresh nationwide criminal background checks every year, when licenses are renewed.

Under current state law, brokers are screened only when they apply for the first time. Their license can be revoked if they get convicted of a crime after that, but the state relies on the brokers to report their own arrests.

''This will give us a shot to look at everybody's background once a year,'' Straub said.

The Miami Herald found 564 brokers who were convicted of crimes after getting their licenses -- including at least 20 convicted of mortgage fraud. All were allowed to keep selling loans.

The Miami Herald investigation also showed how regulators killed the victims' compensation fund with virtually no public debate in the 1990s, despite warnings that mortgage fraud was on the rise.

Since then, Florida's fraud rate has climbed to the highest in the nation -- one of every four fraudulent loan applications in the U.S. now comes from Florida, according to the Mortgage Asset Research Institute.

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