The Japanese bank Nomura Holdings and Royal Bank of Scotland are facing hefty damages after a federal judge held them liable for lying to Fannie Mae and Freddie Mac about the shaky mortgages that backed the mortgage bonds they sold.

Southern District Judge Denise Cote found both institutions, late to the game in packaging mortgage bonds heading into the 2008 implosion of the housing market and economy, made numerous misrepresentations about the poor quality of underlying mortgages.