The filing also cites a prior CFPB sanction against Citibank for discrimination
Citibank and Shellpoint Mortgage Servicing face a federal lawsuit alleging loan modification deception, false foreclosure filings, and national origin discrimination.
The case was filed on March 16, 2026, in the United States District Court for the District of New Jersey by David and Anahit Ambartsumyan, residents of Creskill, New Jersey. At the heart of the matter is what the plaintiffs describe as a loan modification that was offered and accepted — only for the written documents to arrive with materially different terms.
According to the court filing, the Ambartsumyans negotiated a modification with Shellpoint, which offered specific terms by phone and email. The plaintiffs accepted. But when the paperwork came through, the terms had changed — higher monthly payments, a previously undisclosed $15,000 lump sum, and a 40-year loan term inflating interest beyond what had been agreed to.
The plaintiffs first went to court in December 2020, filing in Bergen County Chancery Division to enforce the original modification agreement. That case was still active when, according to the filing, foreclosure counsel filed a foreclosure complaint on May 6, 2021 — and certified to the court that no other litigation was pending. The plaintiffs say that certification was false.
For mortgage servicers and foreclosure professionals, that allegation is worth noting. A false certification under New Jersey court rules is not a minor paperwork issue. It goes to the credibility of the entire foreclosure proceeding and raises real compliance questions for anyone in servicing or default management.
The filing also alleges the foreclosure moved forward without a hearing, despite the plaintiffs' objections to the amount owed. No testimony was taken. No witnesses were cross-examined. One court order, according to the filing, bore a judge's typed name without a signature or court seal. The assignment of the final judgment, filed May 13, 2024, allegedly lacked proper documentation and contained contradictory representations about the transfer between US Bank and RCF II Loan Acquisition, LP. No valid recorded assignments were attached.
Then there is the discrimination angle.
David Ambartsumyan is Armenian-American. The filing alleges the plaintiffs were treated differently from similarly situated borrowers and were denied COVID-related federally mandated relief that others received. It also references a prior CFPB sanction against Citibank for discrimination against Armenian-American applicants — a detail that gives this case a dimension beyond a single-borrower dispute.
The plaintiffs are asking the court to set aside the foreclosure judgment, block a sheriff's sale, and award compensatory and punitive damages. They have demanded a jury trial.
This case is in its earliest stages. No determination has been made on any of the claims, and the defendants have not yet responded. Still, the combination of a national bank, a mortgage servicer, discrimination allegations with regulatory backstory, and questions about foreclosure procedure makes this one worth keeping on the radar. For compliance teams, servicing executives, and fair lending professionals, the issues raised here hit close to home.
