New Mexico § 56-1-16 - Variable rates

§ 56-1-16. Variable rates

A retail installment contract for the purchase of a mobile home may provide that the

rate of time price differential may be adjusted at stated intervals, in which case

the retail installment contract shall be subject to the following provisions: A. adjustments in the rate charged shall be based on changes in a specific index,

as set forth in the retail installment contract, with the index base being fixed by

the index value in effect on the first day of the month in which the retail installment

contract is dated. The index may be only an index approved by the federal home loan bank board or by

the office of the comptroller of the currency of the department of the treasury for

adjustable or variable interest rates on residential mortgage loans; B. subject to the limitations prescribed by this section, the adjustments to the rate

of time price differential on each rate adjustment date, either up or down, shall

be equal to the difference between the index value in effect on the first day of the

second calendar month preceding the month in which the rate adjustment falls and the

index value in effect on the first day of the month in which the retail installment

contract is executed; or, for adjustments after the initial adjustment, the adjustment

shall be equal to the difference between the index value in effect on the first day

of the second calendar month preceding the adjustment date and the index value in

effect on the first day of the second calendar month preceding the date of the immediately

preceding rate adjustment; C. for any six-month period, no rate adjustment may result in a rate of time price

differential which is more than one percentage point greater or less than the rate

of time price differential in effect in the preceding six-month period. At no point in time shall the rate of time price differential after adjustment be

more than ten percentage points more or less than the rate of time price differential

in effect when the retail installment contract was dated; D. any increase in the rate permitted by this section may be waived at the option

of the seller. Any decrease in the rate warranted by decreases in the index is mandatory, subject

to the limitations prescribed by this section and by the provisions of Subsection

E of this section. If the seller agrees to impose a periodic or aggregate limitation on rate adjustments

that is smaller or more restrictive than the limitations prescribed by this section,

such limitation shall apply both to increases and decreases; E. any changes in the index not reflected in adjustments to the rate of time price

differential shall be carried over to succeeding rate adjustment periods and be implemented

to the extent they are not offset by opposite movements in the index; and F. adjustments to the rate of time price differential may result in changes in the

amount of any installment payment due under the retail installment contract or in

changes in the term of the retail installment contract or in a combination of such

changes in amount and term. Adjustments to the amount of installment payments may be made less frequently than

adjustments to the rate of time price differential.