2006 New Mexico Statutes - Section 58-15-15 — Precomputation of charges permitted.

58-15-15. Precomputation of charges permitted.

A licensee, after first obtaining approval from the director of a formula or method of calculation, may, when the loan contract requires repayment in substantially equal and consecutive monthly installments of principal and charges combined, precompute at the agreed monthly rate, not in excess of that provided for in Section 58-15-14 NMSA 1978, on scheduled unpaid principal balances according to the terms of the contract and add such precomputed charges to the principal amount of the loan. Every payment may be applied to the combined total of principal and precomputed charges until the contract is fully paid and the acceptance or payment of charges on loans made under the provisions of this subsection shall not be deemed to constitute payment, deduction or receipt thereof in advance nor compounding under Section 58-15-14 NMSA 1978. Such precomputed charges shall be subject to the following adjustments:   

A.     If the loan contract is prepaid in full by cash, a new loan, refinancing or otherwise before the final installment date, the borrower shall receive a refund of that portion of the total precomputed charges applicable to the monthly payments as originally scheduled or as deferred, following the installment date nearest the date of prepayment in full computed by the annual percentage rate method. For this purpose, that portion of charges applicable to each monthly payment by the annual percentage rate method shall be charges that would apply to each payment if the charges had not been precomputed, but had been computed by the simple interest actuarial method on unpaid principal balances at the annual percentage rate disclosed on that particular loan pursuant to the federal truth in lending law based on the assumption that all payments would be made exactly on schedule. If such prepayment occurs before the first installment date, an additional refund of one-thirtieth of the portion of precomputed charges which could be retained if the first installment period is one month, and the loan is prepaid on the first installment due date shall be made for each day from the date of prepayment in full to the first scheduled installment date. Any prepayment made on or before the fifteenth day following an installment date shall be deemed to have been made on the preceding installment date. If judgment is obtained before the final installment date, the contract balance shall be reduced by the refund of precomputed charges which will be required for prepayment in full on the date judgment is obtained.   

B.     In the event of default of more than seven days in the payment in full of any scheduled installment, the licensee may charge and collect a default charge not exceeding an amount equal to the refund that would be required for prepayment in full one full month prior to the final due date. Said charge may not be collected more than once for the same default and may be collected at the time of such default or at any time thereafter.   

C.     If payment of all unpaid installments on which no default charge has been charged and collected is deferred one or more full months, the licensee may charge and collect an amount which shall be equal to the difference between the refund that would be required for prepayment in full as of the scheduled due date of the first deferred installment and the amount which would be required for prepayment in full as of one month prior to said date, multiplied by the sum of the number of months in which no scheduled payment has been made and in which no payment is to be required by reason of the deferment. Such charge may be collected at the time of deferment or may be collected at any time thereafter. If a refund of precomputed charges is required during a period in which no scheduled payment is required by reason of a deferment, the borrower shall also receive a pro rata refund of the deferment charge, computed to the nearest number of full months.