WASHINGTON (Reuters) - The chief regulator for Fannie Mae (FNM.N) and Freddie Mac (FRE.N) said on Thursday he had no option but to seize control of the mortgage finance companies in early September since they had grown so unstable.

James Lockhart, director of the Federal Housing Finance Agency, told lawmakers that he had found "significant and critical weaknesses across the board" by August when the government was mulling how it might stabilize the companies, which are critical to the U.S. housing market.

"Each company reported to the FHFA and to (the) Treasury (Department) that it was unable to access capital markets to bolster its capital position without Treasury financing," Lockhart said in prepared remarks to the House Financial Services Committee.

(Reporting by Patrick Rucker; Editing by James Dalgleish)

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