Fannie Mae and Freddie Mac continued to sell off their holdings of non-agency commercial MBS as the preferred strategy for meeting their regulator's demand that the two government-sponsored enterprises accelerate the reduction in their retained mortgage portfolios. The two GSEs reduced their CMBS holdings by 51.4 percent over the course of 2013, according to an Inside MBS & ABS analysis of year-end financial statements. The Federal Housing Finance Agency ordered the two GSEs to sell at least 5 percent of their "less-liquid" mortgage assets, meaning whole loans and non-agency securities. CMBS are...[Includes one data chart]