|
1.0 Executive Summary
Electronic Data Interchange (EDI) is the application-to-application exchange
of business documents in a standardized electronic format. EDI uses:
- Transaction sets as a standard format for the information being exchanged
- Translation software to format and edit the information
- Various telecommunication links to exchange the information
EDI as a concept has existed for more than twenty years. In recent years, it
has gained the attention of the Mortgage Banking Industry and the Federal Government.
The Government National Mortgage Association (Ginnie Mae) began its EDI program in the Fall of 1996. The goals of our EDI program are to simplify the reporting process for the issuer community and to increase our responsiveness to individual service needs and requests. The establishment of Ginnie Mae’s EDI program is an essential step in moving toward industry-wide standards, which will "lessen the load" of each member of the issuer community.
1.1 Why Is Ginnie Mae Doing This?
The Mortgage-Backed Securities (MBS) industry continues to make
changes which are helping to increase the efficiency and effectiveness of business
processes. With the use of EDI, the standardization of
investor reporting will provide lenders with a consistent way to
report loan information across all secondary agencies. We began our EDI program to
achieve the following benefits:
- Stay consistent with technological advancements and industry initiatives
- Realize efficiencies from the use of standardized data formats for loan level
reporting
- Improve data quality, reduce costs, and increase the flexibility and ease with
which we do business with the secondary market
1.2 What Is In It For You?
As a participant in Ginnie Mae's EDI program, you will be
exchanging loan level reporting data electronically with Ginnie Mae, enabling your organization to
experience a number of benefits:
- Quicker feedback on submission status and results
- Ability to identify errors in your data prior to submission
- Decreased mailing costs
- Reduced paper and physical media processing
- Increased efficiencies based on the use of the same transaction set for investor
reporting with Ginnie Mae, Fannie Mae, and Freddie Mac
Depending on the actual EDI solution your organization implements, you may realize
additional benefits and savings over time. Also, as a part of our EDI program,
you will become part of the movement toward industry-wide EDI participation.
1.3 How Will Ginnie Mae Support You?
Ginnie Mae is committed to providing support for all of its trading partners, as well as providing long-term support for issues and problems as they arise. Throughout the program, Ginnie Mae provides critical program support through a variety of communication means, including standard publications and Ginnie Mae’s Web site (www.ginniemae.gov).
Ginnie Mae has established a dedicated team that is responsible for handling all EDI-related issues. Among other customer service initiatives, an EDI Hotline: 1-888-GINNIE4 (Option 1) exists, which is staffed by the Ginnie Mae EDI team. The purpose of the Hotline is to allow you to gather information about the EDI program and its requirements. Further guidance on calling the EDI Hotline is provided in
Appendix E - Technical Support Guidelines.
 |
|
1.4 EDI Fundamentals
Companies that exchange documents through the use of
EDI are known as trading partners. Each trading partner must learn
about and procure the specific hardware and software needed to become EDI-capable. EDI
infrastructure requirements are discussed in Section 2 - EDI Fundamentals of this guide.
The business documents traded in EDI are referred to as transaction sets. Each
transaction set is defined by the Accredited Standards Committee (ASC) of the
American National Standards Institute (ANSI). Within the ASC, there is an X12
subcommittee that is dedicated to EDI standards. Each transaction set is generally referred
by name and a three-digit number, which are both defined by the ASC X12. The two transaction sets
that Ginnie Mae uses are 203 and 997.
The 203 is the Secondary Mortgage Market Investor Report, and the
997 is the Functional Acknowledgment. These transaction sets are further explained
in Section 4 - Mapping.
One critical success factor for an EDI implementation is strict adherence to
established EDI standards. The use of EDI standards is essential to ensure that the business document
(transaction set) being
exchanged can be interpreted and validated by trading partners. Before standards were widely adopted, the most
difficult aspect of exchanging business documents with multiple trading partners was identifying
the data. However, through the use of standards, each trading partner knows exactly what to expect.
The EDI process begins when a business entity (Trading Partner A) chooses to
electronically exchange data with another business entity (Trading Partner B). The
first step in the process is to establish a communication link between the two
trading partners. Once this is established, Trading Partner A will take its
proprietary business data and translate it into the EDI standard format. This data
will then be transmitted to Trading Partner B, who will translate it from EDI to its
proprietary format. Typically, Trading Partner B will then send an acknowledgment
to Trading Partner A to confirm the success or failure of the transmission and
the acceptability of the transaction set syntax. Ginnie Mae currently supports the
following telecommunications methods:
- Bulletin Board System (BBS)
- Value Added Network (VAN)
- World Wide Web (Web)
- Integrated Services Digital Network (ISDN)
Each of these telecommunications options is explained in detail in Section 2 - EDI Fundamentals.
The typical EDI data flow includes two trading partners, two translation functions,
and a telecommunications connection. All of the telecommunications listed above,
and many others, may be used to complete the telecommunications connection between trading
partners. A typical EDI data flow is depicted in Figure 1-1:
Figure 1-1
EDI Data Flow
|
 |
|
There are many possible options for creating an EDI infrastructure: From simple modem-to-modem connections
using PC translators, to packet switching networks using large mainframe translators. The costs
associated with different options can vary greatly. Complete EDI solutions exist for any business
from the smallest entity with a limited budget, to worldwide corporations with larger EDI budgets.
|
1.5 Impacts
|
As a new trading partner, you are probably wondering
how Ginnie Mae's EDI program will impact your organization. There are a number of factors
that will influence the effect EDI has on your entity, including current EDI
capabilities, existing technology infrastructure, and data volume. Because your business
needs are unique, the EDI solution choose may also be unique. In other words,
there is not one single EDI solution designed to meet the needs of every organization. Ginnie
Mae's issuer community is very diverse. Some are currently EDI-capable, while others will
be implementing this technology for the first time. The following paragraphs provide an
overview of the requirements for reporting data using EDI. Specific business impacts of these
requirements will depend entirely on your organization.
In order to participate in our EDI program, your data transmissions must adhere
to the ASC X12 EDI Standards. Trading partners typically purchase a translation
software package that converts their data from an internal proprietary format to the EDI
standard format. Translation software packages will vary by price and capabilities.
Again, the translation software that your organization uses will be based on both your
needs and your plans for implementing other EDI transaction sets.
In addition to translation software, your organization must also decide on a
telecommunications connection to transfer the data. There are many telecommunications options
available to provide a connection.
Typically, there are two types of EDI implementation costs: Acquisition and recurring. As
a Ginnie Mae trading partner, you are responsible for establishing
an EDI infrastructure to support your needs. This may include purchasing equipment
and configuring your EDI environment - both acquisition costs - and maintaining your system once
it is operational - a recurring cost.
In summary, the impacts of moving to an EDI environment are different for every
organization. Finding the appropriate solution for your organization will take
research and planning. For further information, please see Section 1.7, below.
|
|
1.6 Purpose of this Guide
|
The remainder of the Ginnie Mae Implementation Guide addresses
the technical
details of Ginnie Mae's program, including an outline of the steps required to
establish your environment to trade data with Ginnie Mae. The Guide is organized into the
following components: EDI Fundamentals, Getting Started, Mapping, and Appendices.
Within Section 2 - EDI Fundamentals, you will find a technical overview of EDI
including information about hardware, software, and telecommunications. In Section 3 -
Getting Started, you will find the six step process required to become EDI-capable for the
Ginnie Mae EDI program. Section 4 - Mapping is a technical presentation of how to read an EDI
map. In addition, this section provides Ginnie Mae's maps 203 and 997 transaction set maps and telecommunications envelope structures.
Finally, the Appendices include a number of informational items and tools, such as an EDI Fact
Sheet, Glossary, Ginnie Mae EDI Implementation Checklist, EDI System Agreement, Technical Support
Guidelines, Trading Partner Profile, and Guidelines for the Implementation of the Ginnie Mae 203
Transaction Set.
|
|
