972-836-7750 Request a demo Talk to an expert
Talk to an expert Request a demo Call sales 972-836-7750

X12 transaction guide · Finance

EDI 198 Loan Verification Information

The X12 document used to request, validate or exchange loan verification information among parties in the loan life cycle.

Sent by
Lender or verification service
Received by
Employer, depository institution or other verifier
Standard
ANSI ASC X12

What is an EDI 198?

The EDI 198 Loan Verification Information is the ANSI X12 transaction set used to request, validate or exchange standard loan verification information among entities involved in the loan life cycle, which may include lenders, employers, depository institutions and others.

Lenders verify what applicants state on their applications: employment and income with employers, account balances with banks, and existing debts with other creditors. Exchanging verifications electronically shortens underwriting and reduces the risk of fraudulent paper documents. Verifications may be requested again before closing.

How the EDI 198 worksDiagram of the EDI 198 Loan Verification Information. Lender or verification service sends it to employer, depository institution or other verifier. It usually follows 201. It is usually followed by 997. Inside the ISA, GS and ST envelopes, X12 release 008010 requires, in the heading: BGN (Beginning Segment) and detail: the required IN1 loop with IN1 (Individual Identification), IN2 (Individual Name Structure Components) and the required API loop with API (Activity or Process Information) and the required N1 loop with N1 (Party Identification). 2 optional loops are listed by their first segment.How the EDI 198 worksLoan Verification Information: who sends it, where it fits and what the standard marks required1 WHERE IT FITSUSUALLY FOLLOWS201Residential LoanApplicationEDI 198SENDERLender or verificationserviceRECEIVEREmployer, depositoryinstitution or otherverifier997 or 999 acknowledgment back, if the partners agreeUSUALLY FOLLOWED BY997FunctionalAcknowledgment2 WHAT X12 RELEASE 008010 REQUIRESInterchange: sender and receiver IDsISA … IEAFunctional group, ID code MEGS … GETransaction set 198ST … SEHEADINGBGNBeginning Segment+ 1 optional loop, starting with:N1DETAILRequired loop IN1 · repeats many timesIN1Individual IdentificationIN2Individual Name Structure ComponentsRequired loop API · repeats many timesAPIActivity or Process InformationRequired loop N1 · repeats many timesN1Party Identification+ 1 optional loop, starting with:PWKBlue box: required loop. Optional loops are listed by the segment that starts them; when a loop is used, that first segment is required. Optional segmentsoutside loops are not drawn.Structure: required segments and loops in the X12 008010 listing for the 198. Your trading partner's implementation guide adds its own requirements.
How the EDI 198 worksDiagram of the EDI 198 Loan Verification Information. Lender or verification service sends it to employer, depository institution or other verifier. It usually follows 201. It is usually followed by 997. Inside the ISA, GS and ST envelopes, X12 release 008010 requires, in the heading: BGN (Beginning Segment) and detail: the required IN1 loop with IN1 (Individual Identification), IN2 (Individual Name Structure Components) and the required API loop with API (Activity or Process Information) and the required N1 loop with N1 (Party Identification). 2 optional loops are listed by their first segment.How the EDI 198 worksLoan Verification Information: who sends it,where it fits and what the standard marksrequired1 WHERE IT FITSUSUALLY FOLLOWS201Residential Loan ApplicationEDI 198SENDERLender orverificationserviceRECEIVEREmployer,depositoryinstitution orother verifier997 or 999 acknowledgment back, if the partnersagreeUSUALLY FOLLOWED BY997Functional Acknowledgment2 WHAT X12 RELEASE 008010 REQUIRESInterchange: sender and receiver IDs (ISA… IEA)Functional group, ID code ME (GS … GE)Transaction set 198 (ST … SE)HEADINGBGNBeginning Segment+ 1 optional loop, starting with:N1DETAILRequired loop IN1 · repeats manytimesIN1Individual IdentificationIN2Individual Name StructureComponentsRequired loop API · repeatsmany timesAPIActivity or ProcessInformationRequired loop N1 · repeatsmany timesN1Party Identification+ 1 optional loop, starting with:PWKBlue box: required loop. Optional loops are listedby the segment that starts them; when a loop isused, that first segment is required. Optionalsegments outside loops are not drawn.Structure: required segments and loops in the X12008010 listing for the 198. Your trading partner'simplementation guide adds its own requirements.

How to read this diagram: the top row shows who sends the 198, to whom, and which documents usually come before and after it. The lower part shows what X12 release 008010 itself requires: the envelopes around the 198 and the segments and loops the standard marks as required, area by area. Optional loops are listed by the segment that starts them rather than drawn in full. This is the standard's minimum, not a trading partner's requirement: each partner's implementation guide usually makes some optional loops mandatory, restricts the codes and may use a different release.

Expand diagram Download SVG

When it is used

  • Verifying employment and income
  • Verifying deposit account balances
  • Verifying existing loans

Where it fits in the document flow

Usually follows 201 Residential Loan Application
This document 198 Loan Verification Information
Usually followed by 997 Functional Acknowledgment

Structure

Mandatory segments in the 198 (X12 release 008010)

The segments X12 release 008010 marks as mandatory at their level, in order. Segments inside optional loops are needed only when the loop is used. This is the standard's requirement, not your trading partner's: each partner's implementation guide names the release it uses, adds the optional segments it requires and restricts the values. The requirement status comes from one published X12 reference listing and has not been checked against a second source.

  • ST
  • BGN
  • N1
  • IN1
  • IN2
  • API
  • PWK
  • AIN
  • NX1
  • FAA
  • DTP
  • CDA
  • SE

Practical example

The 198 in practice

An applicant states her salary and bank balance on a mortgage application. The lender sends verification requests as 198 transactions to her employer's payroll service and her bank. Both respond with the verified salary, employment dates and account balance, and the underwriter completes the file.

Implementation

Implementation considerations for the 198

  • Obtain the borrower's authorization for verifications.
  • Protect applicants' personal and financial data.
  • Match responses to applications reliably.
  • Check whether verifiers use other electronic services.

How ECOM helps

Automate the 198 with ECOM

Industry

Financial Services

Secure file transfer and B2B integration for banks and financial institutions.

Solution

Financial Document Automation

Automate invoices, remittances, payment files and bank statements from capture to posting.

Solution

EDI Integration

Exchange X12 and EDIFACT documents with partners and integrate them directly with your ERP.

More general questions about EDI are answered in the EDI FAQ.

Related transactions

Related finance documents

All 58 finance documents

Need help with the EDI 198?

ECOM maps, tests and monitors X12 documents for your trading partners and integrates them with your ERP.

Request a Demo Contact us