Previous The mortgage industry is chasing artificial intelligence, but many lenders are missing the real foundation for transformation. In this conversation, Allison LaForgia sits down with Larry Bailey, Founder and CEO of Mortgage Workflow Partners, to explore why workflow, not technology hype, determines whether innovation actually works. Drawing on decades of experience in mortgage operations and technology, Bailey explains why workflow optimization is critical before adopting AI, what a “native-first” approach really means, and why many misunderstand their own processes. The discussion explores what separates lenders that successfully modernize from those that struggle, and why workflow discipline is critical for navigating market cycles.
Bailey reflected on his early experiences in mortgage technology and what ultimately inspired him to start Mortgage Workflow Partners. “After all that time in mortgage . . . when I went to work for Ellie Mae back in 2012 to actually implement Encompass for clients…I’d ask people at that time for your documented workflow. I never got a good answer. It was always either zero, we have nothing, or we have something, but it’s really old,” he said.
He explained how that realization shaped his approach over the next decade. “Fast forward over the next nine years . . . we began that concept of workflow before technology, and sure enough, by 2023 it finally started to catch on. We have a team of 23 now…people are finally doing what we knew was always needed, which is to put workflow first,” Bailey added.
On the topic of AI, Bailey emphasized that technology alone cannot drive meaningful change. “Even in AI . . . there are some institutions that think just take AI, plug it in, magic pill, silver bullet. It’s just not true. By having companies understand what their workflow is, it actually parses out the parts that can be automatable, and then we focus AI on that,” he explained.
Bailey highlighted the software he built, Workflow Coach, which “embodies the ability to document your workflow and then also tie into projects with work streams . . . everybody needs it.”
Bailey also described the importance of a “native first” approach. “It would be the equivalent of buying a car and then all of a sudden bolting on all these aftermarket attachments . . . Same thing in mortgage technology . . . you’ve got to understand what’s possible in the package you are receiving from the technology provider.
He highlighted a key principle for building scalable systems: understanding and using native functionality before turning to custom solutions. “When you don’t know what Native is…that’s why we always focus native first.” This approach not only helps companies scale efficiently but also provides valuable feedback to technology providers, helping them improve their offerings.
Bailey shared a common misconception he encounters when evaluating a company’s workflow. Many leaders believe they have a clear understanding of what their teams are doing. “They know what their people do, right? Or the misconception is also, I’m sure you’re going to find stuff, but I’m sure we’re okay,’” he said.
He explained why that assumption can be misleading. “The reason that’s a misconception is [that] business is fine, everything’s running, closing loans, nothing’s broken. I mean, we have problems, but when we actually produce the workflow report and show them exactly what’s happening and who’s doing what and where they’re doing it, the blinders kind of come off,” Bailey said.
Success in workflow optimization, he noted, comes down to adoption. “If you have somebody who goes through these workflow assignments . . . and they like doing it their old way. . . what was the point of investing in improvement? We measure that, and hopefully companies do also because it’s the surest way to know if their teams actually have improved by following better workflows and better outcomes.”
Looking ahead, Bailey stressed the importance of documenting workflows in a fluctuating market. “When companies figure out how their workflows are designed. . . . if those workflows are not documented, that knowledge leaves with the team members that are asked to leave. Huge problem. So what we always advocate is get everything documented first . . . and they can review it and maintain the levels of success they want to have.”
On what’s next for Mortgage Workflow Partners, Bailey said, “Take the rest of this year to really be thoughtful for our clients about how we can deliver on all these things . . . and share with everyone how they can document their own workflows . . . One to not just Encompass, but to every company that lends, to help them understand exactly how they can become better by looking at workflow first.”
