There are many ways to reduce 14VAC to 12VAC ranging from one or a few electronic components like resistors and diodes - with costs starting less than $1. It depends on what you are trying to do.
When you use the term regulate it can be surprisingly complex and expensive to generate an adjustable regulated 12VAC voltage. Regulated in power supply terms generally means the voltage does not change as the load changes. So it comes down to how much voltage change your application(s) can tolerate. Usually model train requirements are not that stringent so tell us more about what you are trying to accomplish. It may also turn out that your application can run on 12VDC (instead of just 12VAC) which gives you additional options.
The amount of power (Watts) is another parameter you need to consider as components to regulate voltage are characterized by how much power they can handle.
