About Mark Fellhauer
After many successful years in financial sales (investment, mortgage) and sales management (mortgage) I made the decision to transition into data and analytics, to further my understanding what we are truly capable of accomplishing with data.
My main areas of interest are strategic management, decision theory, organizational structure, and decision analytics. I have taught/ guest lectured at leading universities across the Midwest regarding Banking, Finance, and Behavioral Economics. Recent research details the impact of strategic decisions inside financial services (everything from investments to hard money lending), and how firms can utilize data to make "better" decisions.
What drives me is to live a life filled with Honesty, Integrity, Candor, and to help increase our collective understanding of the world.
In my spare time I enjoy surfing, fly fishing, and Brazilian Jiu Jitsu.
In this episode, Steve Scanlon and Mark Fellhauer discuss
● The Chance For Transparency In The Mortgage Industry
● Big Data
● “The Extra Penny”
● The Direction of AI and Data Analytics
● The Future of Lending
● We don’t know what goes behind the green curtain of CEOs
● Giving your partner the extra penny can be a “choosing your battle” type analogy or a leadership philosophy where if you’re able to give to someone in need, do it.
● Utilize data and our current tools in this data-centric society to deliver more value to customers
● Moving forward, there’s going to be a bigger concentration on content creation
● Look at the overarching data strategies of mortgage companies and get competitive
“Give your partner the extra penny. It means two things: One, the “choose your battles” analogy. If it's small and it's not worth arguing over, just give it to him. Be done with it. Two, in leadership philosophy. Give your people the benefit of the doubt. If it's something where somebody is asking you for something, and you have it in your power to give it to them, just give it to them.” – Mark Fellhauer
Connect with Mark Fellhauer
Connect with Steve Scanlon
- LinkedIn: https://www.linkedin.com/in/steve-scanlon-lizard/
- Website Rewire, Inc.: Transformed Thinking
- Email: email@example.com
Listen to the podcast here
Mark Fellhauer - Give The Extra Penny
I've got a guest that I'm excited about. There are all kinds of backgrounds and intellectual things. I don't know that we might talk about Mark, but Mark Fellhauer, welcome to the show.
Thanks for having me.
If you've read any episodes and before the show, we talked about some episodes. You know that there's a question that we like to ask right out of the box. Maybe you caught it or didn't catch it, but I'm going to go there first. We're cross country. I'm in Maryland and you're in California. It still amazes me that technology makes all that happen, but we're not going to talk about that. What I do want to ask is, as you are engaged the day, was there anything, in particular, that you were grateful for?
First of all, I'm happy I was able to stand up and get out of bed. I'm happy I had a nice warm cup of coffee and sitting here. I approach everything I do with a little bit of, “You have a choice to either be miserable or be happy.” I choose to be happy. I try to approach things every day. With everything, I do it with a little bit of gratitude and understanding that no matter what you think, it can't be that bad.
I can tell from your answer that you've thought about that. That's something that I'm sensing from you. The gratitude piece and gratefulness part is woven into your DNA of who you are. I'm already learning things, which is great. Thank you for that. Why did we have you on the show? Give us a little bit of your background and who you are. We get a lot of feedback on things that people learned and whatever, but one of the things is knowing who the people are. They like that as we launch into a conversation.
Professionally speaking, I started in sales many years ago. I was in investment and mortgage sales. I rose through the ranks in sales and, at one point, during my sales career, I realized, “I should be a heck of a lot happier and more fulfilled than I am.” I needed to figure out what the disconnect was. I made a big career pivot a few years ago and went into data analytics, machine learning and the “big data,” and that's where I sit now.
That's what my passion is. That's what I do on a day-to-day basis. Academically speaking, I’m finishing a Doctorate in Decision Theory, where a lot of my work is on how private lenders make lending decisions. What are the components that go into that? How does past experience hit on how they make future lending decisions? That's me in a nutshell. I took the scenic raw data analytics.
When I was doing my research on you, I did see that you've held all kinds of different positions. You've had some leadership positions. You're with Experian now and you might have done your own thing once or twice. I'd love to know some of that background as well.
In the investment business, when I started coming up, I came out of college, and I followed my parents' advice and thought, “I'm going to become a stockbroker. That's what I'm going to do. I'm going to wear nice suits,” which that advice was fantastic. I had a wonderful career in the investment business, then 2008 happened, and that was not wonderful. That made things a little bit difficult and caused me to reevaluate the pathway that I was going within that particular sector.
Around that time, I got a very unique opportunity. My dad had been in the savings and loan business all his career. We had always gone back and forth on wanting to do something together. Serendipitously, that opportunity opened up. I was able to start a mortgage bank with him in 2009. Depending on which way you look at it, it was either a good or a bad time. It turned out to be a great time for us. We got to enter the market with not a lot of the problems that the existing companies had. We did a great job. We served a lot of clients. From there, we started a consulting firm once we wound that firm down and helped other community banks do the same thing. We expand their mortgage presence.
I was focused on the Midwest. I had a real passion for community banking and took a few leadership positions within those community banks as a result of my consulting work. That's when I had that big inflection. The consulting side was wonderful. I worked with a lot of great organizations. I met some great people, but I also learned that the work I enjoyed doing was a lot more of the analytical side of it as opposed to going out, hitting the pavement and getting clients.
That's not where my passion was. I had thought for years that it was, but over time, I either lost my passion, or I was an Imposter. That's when I took a look in the mirror and drilled down to see if this was my passion, if this was ego-talking, or if this was me saying, “You've been doing this long enough. You can't step back.” At that point, I jumped both feet into analytics.
There are two places that I'd like to go based on some of the things that you said and that I read about. Maybe we should dig into the weeds of the analytics and the data because there are some things future facing that we could talk about. I have an opportunity to have a behind-the-scenes conversation with someone. I want to dig into that. Before we get there, you mentioned starting a business with your dad, and in some of the stuff that you wrote ahead of time in our booking questionnaire, you also mentioned your dad.
I have a feeling, and maybe I'm wrong about this. You're like me where dad was important to you. I'd love to know, and this question is out of the blue, what are some important lessons that either you got from your dad or from that relationship along the way? Maybe there's nothing there, but I'm going to scratch at that a little bit.
A little bit of background on my dad. He is 81 years old. He flew out here and hopped on a plane in St. Louis at about 6:00 AM. The night before, he went to see the Eagles, which I think is the fifteenth time we've seen him play.
Monday Night Football?
No. Not the football team, but the band. He gets finished seeing Joe Walsh from the boys. He goes straight to the airport and hops on a plane out to California like he's 25. Growing up, my dad was larger than life. He grew up in poor circumstances or the extraordinarily lower working class. He joined Savings and Loan in the ‘60s. It was one of those stories of working himself up from teller to CEO, chairman of the board. He worked through one of the few savings and loans in St. Louis. Equality Savings and Loan was the bank to make it through the savings and loan crisis.
He took the organization public in the late ‘90s and, from there, merged with a larger bank for competitive reasons in the early 2000s. I had a front-row seat to see that evolution and be able to have an idea of a few things. One, what it took to be a CEO. Collectively and culturally speaking, we look at CEOs and see these “larger-than-life characters,” but we don't realize what goes on, like The Wizard Of Oz thing, behind the green curtain. I got to see a lot of what went on behind the green curtain, the toll it takes on you, and the weight it takes on some of the decisions behind the corporate actions is the human side of it.
We look at CEOs and we see these larger-than-life characters. But we don't realize what goes on behind the green curtain.
Also, I was lucky enough to get a mentor that had accomplished everything that I wanted to accomplish. As I started moving up educationally and getting into the workforce, I was able to have somebody and a mentor that I was lucky enough to call my dad that I could say, “I have this problem. How did you solve something like this?” Even from there, once I left the investment business to have a business partner like that, it gave me a lot more insight and helped my learning curve flatten out.
It sounds like he modeled for you. I see this often. There are a lot of parents and even leaders in the business get stuck in, “I'm going to tell you what to do.” It sounded like he just showed you. What is that saying? “There's a lot more that's caught than taught.” It sounds like you were a son that was watching, as we all do with our parents.
Even from there, I was able to leverage that relationship, and all of my career has been in finance. Whenever I had something that I was interested in, I was able to say, “Who do you know that's successful in this that I can talk to and learn from?” Those doors were open for me as well. I think of other mentors that I've had, and those relationships have been excruciatingly important. They have helped me determine what the correct course of action is “correct,” but I have the courage to course correct as things go.
Tell dad that we say hello and thank you for serving as such a great model. I hope that when I'm 81, I'll be flying around to concerts too.
He is like a boss.
You wrote down a quote that you sent over to us, and I think it came from your dad, but I'd love you to explain it, “Give your partner an extra penny.” What does that mean?
It did come from my dad. When he was running the bank, he always had partners. He, in tandem, ran a real estate company, which was a whole side hustle before side hustles were a thing. One of these partners was a gentleman by the name of Cy Alice, an old-school real estate guy in St. Louis. If any old-school real estate guys in St. Louis are reading, they’ll know exactly what I'm talking about. As Cy got older, I got to go to lunch with them when I was working with my dad and we were running the mortgage company. Whenever something was coming would come down where it was like a dispute between people or a conflict or something like that, he would always say, “Give your partner the extra penny.”
What he meant by that were a few things. If it's small and not worth arguing over, just give it to him. Be done with it. Move on. It's not a big deal for you. It is like a choose-your-battle analogy. I took this more so later in life as leadership philosophy, “Give your people the benefit of the doubt. Give them the extra ‘penny.’” If it's something where somebody is asking you for something and you have it in your power to give it to them, give it to them. If you can help them be empowered to get from point A to point B, do so.
I wrote down that down, “Give your people the benefit of the doubt and leave the extra penny.” Being reminded of that is helpful. I hope our readers take note of that as well. As you are talking about lessons from your dad, I'm thinking about my own dad at the same time. He had a saying, and the meaning is the same as what you explained, but it's different. My dad was in real estate also and he used to say, “Leave money on the table.” Especially in real estate transactions, it's always like, “We're going to negotiate every single last penny. We want to get the lowest price in whatever.”
My dad was like, “You're in the real estate game to benefit from it. You're there to make money, great, but leave something on the table for the other side to be able to make money and do okay as well.” What comes around goes around because then you get a good reputation as a result of that, that likely means there's more deal flow that comes your way. There's this thing that happens anyways. I see people over and over again where they're like, “I want to get as much as I possibly can out of the deal.” I'm like, “I don't know about that.” There are great leadership lessons from dad.
Now we're going to dig into the weeds a little bit in the analytics and the data because I am fascinated by it, and I don't know a lot about it. As we look to the future of lending in general, what types of things do you see from your data analytic chair or maybe it's artificial intelligence? I don't know what direction you want to go in. What types of things do you see in the future of lending?
There are a lot of things that I see. What jumps out at me is the overarching question of, “How do we serve customers better.” It's a vague or broad question. What does that mean? Meeting customers where they are from a technical standpoint, “How do we meet customers where they're at in terms of their overall decision-making process? How do we contact them? How do we understand and utilize data to help aid in making decisions before the customer has made a decision?” What I'm specifically thinking of is, “How do we talk to customers in stages before they're ready to go out contact with a real estate agent or if you're a real estate agent, how do we contact customers when they're thinking about buying a house or something along those lines?”
As an industry, we can do a better job with transparency with our customers and borrowers. We can go in every which direction with that. It's become very difficult and overwhelming when a person wants to purchase a home, more refinance, and they look and see they have 90 documents in front of them. How do we collectively work and help them understand what's going on? How does this fit into their broader financial picture and life? We have a lot of separate streams of data. Collectively speaking, we have the inverse problem of what we had several years ago, like we had no data. Now we have all. We have everything. How do we deal with that?
Extra Penny: The mortgage industry can do a better job with transparency with our customers and with our borrowers.
Is there a scenario that you could lay out for us with all of the customer experience pieces and too much data? I'm trying to think of the mortgage leader or the high-level individual producer that might be reading this. I’m asking your opinion. We don't know if this is right or wrong but from your technology or the data chair, is the way that they go about their job a few years from now the same as it is now, slightly or dramatically different? What do you see?
I'm reminded of a conversation I had with a good friend who runs a mortgage company back home. We were talking about, specifically, relationship-based selling, the whole lexicon we had years ago, the whole Jeff Gier and all that stuff, which is fantastic. It's all great stuff and Sales 101 stuff. Looking forward, I don't want to be bold as to say there's been this new paradigm shift or you got to throw all that out and embrace technology, like Facebook and all that stuff, “Any networking events, cancel them, dump all your money into Facebook marketing.” That's not what I'm saying. There's going to be a larger concentration going forward on a lot more content creation and value being delivered that way.
Rather that means your top producers are utilizing a TikTok podcast or Facebook marketing. Drilling down even further, at the producer level, your big producers are going to almost have to develop their own personal social media strategy and get some diligence around CRM. One of the things that I've seen in community banks is that the LOS has functioned as a CRM tool. That's not a knock by any stretch of the imagination.
You're using a hammer when you should be using a drill. I think there's going to need to be a pivot there and the recent interest rate environment is going to force that pivot and your big producers to go, “I need to do something else. Pipelines are dry and all of those things.” I think it's going to have to go in that direction.
Extra Penny: The recent interest rate environment's going to force that pivot, forcing your big producers to do something else because the pipelines are getting dry.
A lot more content. I might not even be in a position to ask this, but it's in my head. What would you say to the mortgage leaders or even the producers out there that don't have that skillset. You are talking about TikTok, content creation and things like that. What if they're not leaning that way, or they don't want to do that because those people are out there?
Absolutely not. I think it needs to be an additional arrow when you're quivering and not a, “This is going to replace everything that you're already good at.” It needs to be another arrow in the quiver. I don't think it can be ignored as an arrow in your quiver at this point. It's something where we live in a data-centric society and have for quite some time now. The idea of having a Facebook page or a website and not trying to monetize it and see how you can utilize those tools to get customers where they're at is very beneficial.
We live in a data-centric society and have for quite some time now. It is very beneficial to utilize having a Facebook page, website, or other online tools.
I appreciate that answer because one of the things that I've always appreciated and enjoyed about the mortgage industry and real estate is the same way is there are many ways to make it happen from a prospecting, selling and customer acquisition standpoint. With your answer, you hammered that home. I asked you about the future and you said, “This is what I see, but it's not the end all, be all. The only way is it's just another arrow in your quiver. It's another tool.” I love that, and it can augment other things that a person or organization is doing. Thank you for that. As we start to round third and head towards home during this conversation, is there anything on the topic of the data analytic piece or the future of lending that I'm not asking you that you want to make sure that we touch on?
Lending-wise, it's interesting. I'm new to Experian. I've newly left the mortgage business. I'm watching what's happening with a degree of sorrow as to what's happening. There are a lot of good people that are experiencing a lot of struggle. This is a great time to utilize and look at an overarching data strategy within mortgage companies and the specific companies I'm speaking to. The Chases and the Wells Fargos of the world have all of this stuff. They have social media engineers and all of those things. There's a great opportunity for your mid-size mortgage company to be able to be competitive with those guys in that respect. I think it's still new enough.
There are a lot of good people who are experiencing a lot of struggle right now.
They can be tools that can help you compete with the bigger boys. Maybe you can confirm or deny it, but I would assume that those tools or technologies were expensive years ago that only the big boys could afford them, and now it's a lot more accessible to some of the smaller players.
I did my undergrad in Economics, MBA and Finance. That's where I came up with my technical background. I bring that up because when I was in my undergrad, your statistical software packages, which is what we all use to develop machine learning models, and all that fun and“nerdy” stuff that I'm not going to get into. Those packages were probably $20,000 to $30,000 a month for a license. It was very cost-prohibitive. Not only did you have to pay that. You had to pay some PhD in statistics to be able to work it. Now, that's the polar opposite. All of these statistical programs or the major ones that everybody and Google uses are free, and they're all open source.
Undergrads are able to utilize these tools well enough that you can leverage their experience with them. There are also a lot of no-code solutions to get a line of sight into what's going on inside of your business in terms of pipeline, visualizations and stuff like that, that from a cost-perspective have decreased dramatically in cost in years, rather it be Power BI as part of the Microsoft Suite.
Extra Penny: There are a lot of no-code solutions to get a line of sight into what's going on with the inside of your business in terms of pipeline and, in terms of visualizations.
With everything that's going on in the market, there are opportunities for companies to invest, and it's not these big cost-prohibitive investments anymore. We covered the Eagles, leaving pennies on tables, data analytics and the future of lending. I think we did it. I so much appreciate your time. I'm excited when this episode drops. I think it's going to be super fun. Thank you for your expertise. You've got this lens on the industry that a lot of us don't have. I appreciate you adding your perspective to the show. Thanks for your time.
Thanks for having me. I appreciate it.