'Maxed Out' Man James Scurlock, Right on the Money

One of the most memorable subjects in "Maxed Out" was a real estate agent named Beth Naef, who was selling multimillion-dollar spec homes in Las Vegas, often using the same financing that Enron engaged in. She herself was buying a 11,000-square-foot "dream home," which she was planning on "flipping" later. How is she doing?

I don't know, because she's one of the few people from the film who doesn't care to talk to me anymore. And I can understand that. . . . I think you can read between the lines and tell that if she couldn't afford that house two years ago, she can't afford it now. Hopefully she got out, but that means someone else got in.

You show debt collectors in "Maxed Out" in a highly critical light, yet you spoke at one of their conventions earlier this year. How did that go?

You'd think they would be my natural enemies, yet they were a terrific audience. Everybody is really worried about this, even the debt collectors. Because the first thing they look for, the way they make an easy profit, is if someone has access to more credit, so they can pay bad debt with a card or a refinance or a home equity loan.

But these refies that were keeping everything going a little longer and masking the big problems are suddenly drying up. The tragedy is that they're drying up just as so many people need them to save themselves from their mortgages resetting and their payments doubling. So it really is kind of a perfect storm right now.

How do you think the crisis is being handled in Washington?

I think it's been exacerbated by people like [Federal Reserve Chairman] Ben Bernanke and [Treasury Secretary] Henry Paulson and others coming out and saying, "Oh, subprime isn't contagious" . . . as if subprime borrowers were like lepers confined to some colony on an island and couldn't swim over and infect the rest of us. . . . Now that it has spread, the party line is "The economy's strong and we'll power through this." But the only way you power through a crisis in our economy is by making sure people keep spending. And the news this week from Wal-Mart and Home Depot is that people are starting to pull back. If you use your common sense, clearly if someone has been using their home equity to pay for their credit card bills, and refinancing and refinancing and refinancing to pay their bills, if they can't refinance anymore, they can't spend anymore. So lo and behold, Home Depot says people won't be remodeling their kitchens. The myth of the house increasing in value every year as some kind of birthright is now being shattered, and people are realizing that maybe a Sub-Zero refrigerator isn't an investment; maybe it's just another expense.

What's next?