Fannie, Freddie regulator expects to lift lid on capital

WASHINGTON, Feb 7 (Reuters) - The regulator for Fannie Mae (FNM.N: Quote, Profile, Research) and Freddie Mac (FRE.N: Quote, Profile, Research) said on Thursday that he is talking with leaders of the two companies about lifting a demand that they hold a 30 percent capital cushion.

"We are working with the two companies' management teams to start to free up that capital and we will as we see progress in these operational issues," said James Lockhart, director of the Office of Federal Housing Enterprise Oversight.

The companies are under orders from their regulator to hold 30 percent more capital than normal in the wake of accounting scandals that shook both companies.

(Reporting by Patrick Rucker; Editing by Chizu Nomiyama)