Use Word's AI to Draft Underwriting Letters and Narratives

What This Does

Word's built-in Copilot AI drafts adverse action notices, exception request narratives, and underwriting summary letters from a brief description — eliminating the blank-page problem for complex written communications.

Before You Start

• Microsoft 365 Business Standard or higher with Copilot enabled
• Word desktop app or Word on the web (word.office.com)
• Know the key facts of the letter you need to write (denial reasons, exception details, etc. — no actual borrower PHI needed for templates)

Steps

1. Open Word and create a new document

1. Open Word and click New blank document
2. Look for the Copilot button in the Home ribbon or the "Draft with Copilot" option at the top of the blank document
3. Click it — a prompt box appears

What you should see: A text input box with the placeholder "Describe what you'd like to write."

2. Draft an adverse action notice

1. In the Copilot prompt box, type a clear description:

   Copy and paste this

   Write an ECOA/FCRA compliant mortgage adverse action notice. Denial reasons: (1) excessive obligations in relation to income — back-end DTI was 53% vs. 45% guideline maximum, (2) insufficient cash reserves — 1 month available vs. 3 months required. Loan type: conventional. Leave blanks for applicant name, address, and application date.
   

2. Click Draft — Word generates the full letter
3. Review for accuracy, add your practice letterhead, fill in the blanks

3. Draft an exception request narrative

1. Create a new document and open Copilot
2. Type:

   Copy and paste this

   Write a mortgage underwriting exception request narrative for a DTI exception. Back-end DTI: 47.5% vs. guideline maximum 45%. Compensating factors: (1) credit score 810, (2) 8 months PITI reserves, (3) LTV 62%, (4) 12-year continuous employment at same employer, (5) no prior mortgage delinquencies in 15 years of homeownership. Recommend approval. Structure as: exception requested, applicable guideline, compensating factors, recommendation.
   

3. Review and refine using the Rewrite button if needed

4. Refine the output

1. After Copilot generates the draft, highlight any section you want to improve
2. Right-click → Copilot → Rewrite for different phrasing
3. Use the Copilot panel to ask: "Make the compensating factors section more persuasive" or "Shorten this to 2 paragraphs"
4. When satisfied, save and format with your lender's letterhead template

Troubleshooting: If Copilot isn't available in your Word ribbon, it may not be enabled for your account. Check with IT — this requires an M365 Copilot add-on.

Real Example

Scenario: A loan was denied for DTI and insufficient reserves. You need to send the adverse action notice today but the blank document has been sitting untouched for 30 minutes.

What you type: "Write a mortgage adverse action notice — denial for two reasons: excessive obligations in relation to income, and insufficient reserves. ECOA/FCRA compliant. Formal, professional tone. Leave blanks for borrower name and loan number."

What you get: A complete, properly structured adverse action letter with standard ECOA/FCRA language, reason codes, and a statement of the borrower's rights — ready for your letterhead and signature.

Tips

• Keep your lender's adverse action notice template as a Word file — open it, then use Copilot to fill in only the specific reasons and facts, preserving your approved format
• For exception narratives, the first draft is rarely final — use the "Rewrite this section" function to try 2–3 variations, then pick the strongest
• Copilot works best when you give it specific numbers and facts rather than vague descriptions

Tool interfaces change — Word Copilot requires M365 Copilot license. "Draft with Copilot" appears at the top of blank documents in supported versions.