Always Audit-Ready: Using Encompass & Calyx to Keep Compliance Locked Down

Encompass now integrates with over 200 third-party services. Calyx Point added cloud deployment and borrower portal capabilities through Calyx Zip. Both platforms auto-generate TRID checklists and update HMDA field definitions as regulations change. Yet most mortgage companies still treat audit readiness as a quarterly scramble instead of a continuous process built into daily operations.

The gap between "our LOS has compliance features" and "our team uses those features every day" is where audit findings live. This guide breaks down the specific compliance tools in both Encompass and Calyx, compares their strengths for different organization sizes, and gives you a six-step framework for building audit readiness into your daily workflow.

What This Guide Covers

• The Regulations Your LOS Must Support
• Encompass Compliance Features That Matter for Audits
• Calyx Compliance Strengths for Smaller Operations
• 6 Steps to Build Continuous Audit Readiness
• Audit-Readiness Checklists for Both Platforms
• Frequently Asked Questions

The Regulations Your LOS Must Support (and How Examiners Check)

Mortgage companies face overlapping federal requirements that auditors verify through your LOS records, document trails, and system configurations. Here are the five regulatory frameworks that drive most audit findings:

• TILA (Truth in Lending Act): Requires accurate disclosure of loan terms, APR calculations, and total costs. Examiners compare your system-generated disclosures against manual calculations.
• RESPA (Real Estate Settlement Procedures Act): Prohibits hidden fees, kickbacks, and undisclosed relationships. Your LOS must track every fee and its source.
• ATR/QM (Ability-to-Repay and Qualified Mortgage rules): Requires documented verification that borrowers can afford their loans. Presumption-of-compliance metrics like DTI ratio, points and fees, and loan term must be tracked for every file.
• TRID (TILA-RESPA Integrated Disclosure): Mandates standardized Loan Estimates and Closing Disclosures with specific timing requirements. Examiners check whether your system enforces the three-day waiting period and tolerance thresholds.
• HMDA (Home Mortgage Disclosure Act): Requires detailed data reporting on loan applications, originations, and dispositions. HMDA field accuracy is one of the most common audit finding categories.

Oversight comes from the CFPB, FDIC, OCC, and state regulators. The CFPB's 2026 restructuring shifted primary enforcement to state attorneys general and the FTC, but the underlying regulations remain unchanged. Civil money fines, forced remediation plans, and lending bans are all on the table for non-compliance.

Encompass Compliance Features That Matter for Audits

Encompass from ICE Mortgage Technology is the most widely deployed LOS in the mortgage industry. Its compliance capabilities go deep, but only if your team configures and uses them consistently.

Built-In Compliance Testing

Encompass automates compliance testing across KBYO, ATR/QM, TILA, HOEPA, HMDA, and NMLS licensing. The system runs rule-based checks against each loan file and flags exceptions in real time. The AllRegs integration keeps regulatory definitions current as federal and state rules change.

Workflow Automation

Customizable workflow rules enforce standardized processes across your pipeline. You can require specific document uploads before a file advances, trigger compliance checks at stage transitions, and route exceptions to designated reviewers automatically.

Document Management and Audit Trails

Integrated document management with e-signature capture creates a complete file history for every loan. Real-time audit trails log who accessed or modified each document, when the change occurred, and what was altered. Examiners can retrieve this data in minutes instead of days.

Third-Party Integrations

Over 200 integrations with credit, appraisal, title, and underwriting services pull data directly into the loan file. Each integration point is logged, creating a verifiable chain of custody for every data element in the file.

The trade-off: Encompass's depth comes with configuration complexity. Effective deployment requires training, governance structures, and ongoing maintenance. But for mid-to-large lenders running high volume, the compliance automation pays for itself in reduced audit findings and faster examiner response times.

Calyx Compliance Strengths for Smaller Operations

Calyx Point is the LOS of choice for smaller lenders and mortgage brokers who need solid compliance tools without enterprise-level complexity. Recent additions include PointCentral (cloud deployment), Calyx Zip (borrower portal), and CRM integrations through native connectors and Zapier.

Structured Loan Processing

Calyx's document workflows minimize missing or incomplete files by requiring specific documents at each processing stage. Pipeline tracking keeps files organized and visible across the team.

Customizable Templates

Standard and state-specific form templates ensure disclosures match current requirements. Templates update as regulations change, reducing the risk of outdated forms reaching borrowers.

Affordable Compliance Baseline

Calyx delivers TRID and HMDA form automation, encrypted audit trails for RESPA documentation, and electronic signature support at a price point accessible to smaller operations. The interface is intuitive enough that lean compliance teams can manage it without dedicated IT staff.

The trade-off: Calyx lacks some of Encompass's advanced automation and deep integration ecosystem. For smaller operations processing fewer loans, that trade-off works. For growing companies that need scalable compliance automation, Encompass is the stronger long-term platform.

6 Steps to Build Continuous Audit Readiness

Technology is the foundation, but audit readiness is a daily discipline. These six steps work whether you run Encompass, Calyx, or both.

1. Run Quarterly Risk Assessments

Map which federal and state regulations apply to your specific products, states, and channels. Compare those requirements against your current LOS configurations and workflows. Both Encompass and Calyx let you adjust compliance rules and workflow triggers based on your risk assessment findings.

2. Keep Policies Accessible Inside Your LOS

Compliance policies lose value when they live in a shared drive nobody checks. Store current policies directly within your LOS using Encompass Docs Solutions or Calyx's template management. Track policy versions so your team always references the latest version.

3. Activate the Compliance Tools You Already Own

Encompass's automated compliance checks across TILA, RESPA, and HMDA, and Calyx's customizable checklists and reminders, are often underused. Audit the features you are paying for but not using. Turning on existing capabilities is faster and cheaper than building new ones.

4. Schedule Compliance Monitoring by Risk Level

High-risk products and channels get weekly monitoring. Standard products get monthly checks. Use Encompass for rule-based audit reports and real-time exception tracking. Use Calyx's reporting features and reminders to keep files current. Log every finding, track remediation, and close issues before they compound.

5. Train Every Role, Not Just Compliance Staff

Loan officers, processors, underwriters, and closers all touch compliance-sensitive data. Role-specific training using built-in tools in both Encompass and Calyx ensures everyone understands their compliance responsibilities. Test for comprehension quarterly.

6. Assign Clear Ownership and Accountability

Designate a compliance owner who oversees LOS configuration, monitors for regulatory updates, and reports audit readiness status to leadership. Use Encompass's granular permission settings and audit trails to enforce accountability. Establish board-level visibility so compliance is treated as a business priority, not an IT task.

Audit-Readiness Checklists for Both Platforms

For Encompass Users

• Review and update built-in compliance tests quarterly.
• Set up automated alerts for policy and document changes.
• Run sample audit reports using AllRegs to identify missing elements.
• Verify that user permissions align with compliance roles and follow least-privilege principles.
• Test workflow automation triggers against current regulatory requirements.
• Confirm e-signature and document retention settings meet state-specific rules.

For Calyx Users

• Audit disclosure and document templates against current regulations.
• Confirm pipeline tracking and reminders are active and current.
• Schedule periodic export and review of file history and activity logs.
• Test e-signature and document storage integrity.
• Verify Calyx Zip borrower portal data flows match HMDA field requirements.
• Review CRM integration sync schedules to prevent data gaps.

Scaling Audit Readiness: Small Teams vs. Enterprise Operations

The compliance challenge scales differently based on your size:

• Enterprise operations (Encompass): Assign a dedicated compliance officer to oversee LOS configuration. Run quarterly mock audits. Invest in custom workflow engineering for complex products and multi-state operations. Use API integrations to automate compliance data flows between systems.
• Smaller operations (Calyx): Use Calyx's support resources and training to fill procedural gaps. Establish a peer review process for critical disclosures. Consider pairing Calyx with M365 self-audit capabilities for access control and activity monitoring.

Keep Your LOS Audit-Ready Every Day, Not Just Before Exams

Audit readiness is not a project with an end date. It is a daily operating discipline built into how your team processes loans, manages documents, and responds to regulatory changes. The mortgage companies that pass audits cleanly are not the ones who prepare hardest. They are the ones whose systems enforce compliance continuously.

Mortgage Workspace manages Encompass and Calyx environments on a pure Microsoft stack, combining LOS compliance automation with M365 audit logging, access controls, and data governance. With 25+ years of mortgage technology experience across 750+ financial institutions, we configure your LOS for continuous audit readiness and monitor it so your compliance team can focus on lending instead of scrambling.

Talk to our compliance technology team about getting your Encompass or Calyx environment audit-ready.