WASHINGTON (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 housing finance companies about lifting a demand that they hold a multibillion dollar 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 two government-sponsored enterprises, or GSEs, are under orders from their regulator to hold 30 percent more capital than normal in the wake of accounting scandals that shook both companies.

Some of the companies' political allies have called for the regulator to ease the capital reserves that Fannie Mae and Freddie Mac are required to hold against potential losses so they can have more money on hand to aid the ailing housing market.

(Reporting by Patrick Rucker; Editing by Tom Hals)