In the few short minutes after the $40 3yr note auction, MBS have moved sharply into their lows of the day.  Reprices for the worse are very possible  even though post-auction trading is normally quite volatile.  As far as the culprit, here are the relevant bullets on the auction.

• High yield of 1.223 % constituted an uncommon and somewhat significant tail vs. historical performance.  Just over half the bids were taken at the high yield
• Bid to cover 2.98.  Seems high, but last go-round was over 3.0, so don't read too much into it.
• Primary dealers took 14.41 bln and indirects at 24.25 bln

MBS chart:

We'd post links to lock section of all your lender's LOS's, but gotta draw the line somewhere.  Shorter term deal and can't afford to hold out for a late day correction or the rest of the auction cycle in the coming days?  You know what to do!