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X12 transaction guide · Healthcare and insurance

EDI 259 Residential Mortgage Insurance Explanation of Benefits

The X12 document a mortgage insurer uses to send the results of a mortgage insurance claim, an explanation of benefits, to the claimant.

Sent by
Mortgage insurer
Received by
Lender or servicer that filed the claim
Standard
ANSI ASC X12

What is an EDI 259?

The EDI 259 Residential Mortgage Insurance Explanation of Benefits is the ANSI X12 transaction set used to transmit the results of a claim for mortgage insurance benefits, known as an explanation of benefits, between a mortgage insurer and the customer receiving the financial benefit.

When a borrower defaults, mortgage insurance covers part of the lender's loss. The explanation of benefits shows how the insurer calculated the payment: the amounts claimed, allowed and denied, and the reasons, so the servicer can reconcile the payment and pursue any differences.

How the EDI 259 worksDiagram of the EDI 259 Residential Mortgage Insurance Explanation of Benefits. Mortgage insurer sends it to lender or servicer that filed the claim. It usually follows 260. It is usually followed by 997. Inside the ISA, GS and ST envelopes, X12 release 008010 requires, in the heading: BGN (Beginning Segment) and the required 0100 loop with N1 (Party Identification) and detail: the required 0200 loop with N9 (Extended Reference Information), DTM (Date/Time Reference), AMT (Monetary Amount Information), DFI (Default Information) and the required 0300 loop with N1 (Party Identification). 2 optional loops are listed by their first segment.How the EDI 259 worksResidential Mortgage Insurance Explanation of Benefits: who sends it, where it fits and what the standardmarks required1 WHERE IT FITSUSUALLY FOLLOWS260Application for MortgageInsurance BenefitsEDI 259SENDERMortgage insurerRECEIVERLender or servicer thatfiled the claim997 or 999 acknowledgment back, if the partners agreeUSUALLY FOLLOWED BY997FunctionalAcknowledgment2 WHAT X12 RELEASE 008010 REQUIRESInterchange: sender and receiver IDsISA … IEAFunctional group, ID code MGGS … GETransaction set 259ST … SEHEADINGBGNBeginning SegmentRequired loop 0100 · repeats many timesN1Party IdentificationDETAILRequired loop 0200 · repeats many timesN9Extended Reference InformationDTMDate/Time ReferenceAMTMonetary Amount InformationDFIDefault InformationRequired loop 0300 · repeats many timesN1Party Identification+ 2 optional loops, starting with:DTMFISBlue 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 259. Your trading partner's implementation guide adds its own requirements.
How the EDI 259 worksDiagram of the EDI 259 Residential Mortgage Insurance Explanation of Benefits. Mortgage insurer sends it to lender or servicer that filed the claim. It usually follows 260. It is usually followed by 997. Inside the ISA, GS and ST envelopes, X12 release 008010 requires, in the heading: BGN (Beginning Segment) and the required 0100 loop with N1 (Party Identification) and detail: the required 0200 loop with N9 (Extended Reference Information), DTM (Date/Time Reference), AMT (Monetary Amount Information), DFI (Default Information) and the required 0300 loop with N1 (Party Identification). 2 optional loops are listed by their first segment.How the EDI 259 worksResidential Mortgage Insurance Explanation ofBenefits: who sends it, where it fits and whatthe standard marks required1 WHERE IT FITSUSUALLY FOLLOWS260Application for Mortgage InsuranceBenefitsEDI 259SENDERMortgageinsurerRECEIVERLender orservicer thatfiled the claim997 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 MG (GS … GE)Transaction set 259 (ST … SE)HEADINGBGNBeginning SegmentRequired loop 0100 · repeatsmany timesN1Party IdentificationDETAILRequired loop 0200 · repeatsmany timesN9Extended ReferenceInformationDTMDate/Time ReferenceAMTMonetary AmountInformationDFIDefault InformationRequired loop 0300 · repeatsmany timesN1Party Identification+ 2 optional loops, starting with:DTMFISBlue 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 259. Your trading partner'simplementation guide adds its own requirements.

How to read this diagram: the top row shows who sends the 259, 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 259 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

  • Reporting the outcome of a mortgage insurance claim
  • Explaining claim payments and adjustments
  • Supporting reconciliation of claim proceeds

Where it fits in the document flow

Usually follows 260 Application for Mortgage Insurance Benefits
This document 259 Residential Mortgage Insurance Explanation of Benefits
Usually followed by 997 Functional Acknowledgment

Structure

Mandatory segments in the 259 (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
  • N9
  • DTM
  • AMT
  • DFI
  • FIS
  • AWD
  • SE

Practical example

The 259 in practice

A servicer files a claim after a foreclosure sale. The mortgage insurer reviews the claim and sends a 259 with the amounts claimed for unpaid principal, interest and expenses, the amounts allowed, two expenses denied with reasons, and the payment. The servicer posts the payment and appeals one denial.

Implementation

Implementation considerations for the 259

  • Reconcile benefits with the claim filed.
  • Map denial reasons to follow-up actions.
  • Track appeals of denied amounts separately.
  • Protect borrowers' personal data under applicable law.

How ECOM helps

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Industry

Financial Services

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Solution

Financial Document Automation

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Solution

EDI Integration

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