Why Mortgage Servicers Should Embrace Plain Language–Messagepoint’s Patrick Kehoe
Patrick Kehoe is Executive Vice President of Product Management at Messagepoint, a provider of customer communications management software. Kehoe drives product strategy in collaboration with Messagepoint’s product development team. He brings to the company more than 25 years of experience delivering business solutions for document processing, customer communications and content management.
Borrower communications play a critical role in enabling consumers to manage their debt and make informed decisions when they are struggling to do so. Yet most servicing communications are filled with industry jargon and legal phrasing that can confuse readers, particularly the more than half of Americans who read below a sixth-grade level and the 25.6 million with limited English proficiency.
When it comes to default servicing and loss mitigation processes, borrowers must navigate complex options. If servicers fail to present these options clearly, borrowers may struggle to choose the right course of action, putting them at greater risk of foreclosure. Unclear communications can also drive up servicing costs. Research shows that when customers cannot understand written materials, they will turn to call centers for clarification. For servicers, this means a higher cost to service and an increased burden on customer service teams.
Why Plain Language for Borrower Communications
Plain language is more than just simplified writing–it’s a structured approach to communication, guided by standards that make documents more accessible and understandable. Recent research by Labrador, a global communications firm, found that readers were 38% more likely to understand text written in plain language and 72% of readers preferred plain language in disclosure documents. Although there’s no explicit regulation requiring plain language, servicers who adopt plain language principles are in a stronger position to demonstrate compliance with the “clear and conspicuous” standard and good faith efforts to inform borrowers in the event of an audit or consumer complaint. Most importantly, when borrowers understand their communications and options, they can take action and do so without a call to the call center.
The International Organization for Standardization (ISO) recently released principles (ISO 24495-1:2023) for text-based communications that call for:
1. Using familiar words and phrases
2. Avoiding or explaining acronyms, jargon and legalese
3. Employing short, clear sentences and concise paragraphs
4. Placing critical information up front
5. Using an active voice and second person pronouns
6. Using consistent headings to introduce new sections
Additionally, ISO is currently reviewing draft standards for legal and related documents that could provide a framework for legal teams reviewing and inserting legalese into borrower communications.
Common Barriers to Plain Language Adoption
Despite the clear benefits of adopting plain language principles, some organizations may find the process of updating large volumes of borrower communications time-consuming and costly. Teams often have to sift through hundreds of document templates to find and rewrite unclear passages. Multiple authors, each with a unique writing style, can inadvertently introduce inconsistencies.
Even if an organization completes a content optimization initiative, there’s often no straightforward way to maintain the new standards. Changes in regulations, company policies and loan products can quickly reintroduce confusing or outdated language. Because these challenges are time-consuming and costly to address, many servicers feel stuck with status quo documents that may be legally compliant, but don’t effectively serve borrowers’ needs.
Generative AI Makes Plain Language Initiatives Achievable
Generative AI can be a powerful tool to support rewriting borrower communications using plain language principles. The process, however, isn’t as simple as uploading your communications to ChatGPT or any of the other tools in the market.
Generative AI platforms are like a new employee: capable, but lacking deep insight about your business, industry norms and regulatory requirements. Like this employee, AI models need precise instructions to produce high-quality results. For example, prompting an AI engine with “rewrite this in plain language” may lead to unintended changes to the text’s original meaning or sensitive regulatory text being left behind. Additionally, copying content from the systems used to manage communications into AI tools and then back into the communications systems is inefficient. Finally, standalone generative AI tools can introduce data security risks. Public AI models often train on user inputs, so having teams pasting sensitive content into these tools could introduce risk.
Modern customer communications management (CCM) systems offer mortgage servicers a more controlled, efficient way to leverage generative AI, bringing writing, editing and optimization together within the same secure environment where borrower communications are managed. Leveraging AI in these systems is more efficient and greatly simplifies the process of applying plain language principals consistently across all your communications. When the right guardrails are in place, it ensures that your content is not used to train AI models and that users aren’t sending sensitive content out into the public domain. Below are some critical capabilities to look for in a CCM solution with integrated AI:
• Preconfigured prompts for plain language optimization: Some solutions force users to write new prompts from scratch to get the AI engine to return a result. This can lead to less than satisfactory results. Look for a solution with predefined prompts specifically designed for plain language rewrites to ensure AI can produce text that aligns with all aspects of plain language principles.
• Preservation of content formatting and variables: Borrower communications usually contain variable content (e.g., the borrower’s name, account details or contact information) and complex formatting such as fonts and styling. Look for solutions that preserve these elements throughout the content optimization process, so your team’s efficiency is not compromised by having to reimplement them every time they use AI.
• Protections for sensitive content and PII: Ensure that whatever solution you leverage, it offers guardrails for ensuring your content is not retained or used to train public AI models. In addition, separation of the content of a communication from customer data is critical. Look for a solution that keeps these two aspects of a communication as separate pieces and enables only the content of a communication to be assessed by the generative AI models to ensure security.
• Other content optimization capabilities: Content often needs to be optimized from several perspectives. Look for solutions that can refine your content according to desired target reading levels and sentiment and even help you translate content. These are all critical to optimizing borrower experiences and understanding.
Establishing a process that makes it possible for borrowers to readily understand their obligations and options goes beyond just ensuring compliance. It’s a way to reduce misunderstandings, improve borrower outcomes and reduce operational costs by cutting down on unnecessary call center volume. By leveraging generative AI within a modern borrower communications management platform, servicers gain the efficiency and control needed to apply plain language principals consistently across all their borrower communications.
(Views expressed in this article do not necessarily reflect policies of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA NewsLink welcomes submissions from member firms. Inquiries can be sent to Editor Michael Tucker or Editorial Manager Anneliese Mahoney.)
