N.M. Stat. § 56-1-16 — NM Code / Chapter 56 / Article 1 / Section 56-1-16
§ 56-1-16. Variable rates
Status: in_force

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.