LoanDepot, Inc. recorded quarterly record loan originations of $41.5 billion and net income of $427.9 million, according to the company's results for the first quarter ending March 31, 2021. Net income for the first quarter of 2021 decreased to $427.9 million as compared to $547.2 million in the prior quarter.
Adjusted net income for the first quarter of 2021 decreased to $319.4 million as compared to $375.7 million for the fourth quarter of 2020. The company revealed that the quarter-over-quarter decreases were driven by the decline in gain on sale margins and increased variable expenses from higher loan origination volume.
Across the mortgage industry, the first quarter was marked by rising interest rates as well as the continuing slowdown in the volume of refinancings, according to a press release. The company reported rate lock volume of $45.8 billion for the three months ended March 31, 2021, resulted in quarterly total revenue of $1.3 billion, which represents an increase of $17.6 million, or 1%, from the fourth quarter of 2020. Additionally, record loan origination volume for the first quarter of 2021 was $41.5 billion, an increase of $4.1 billion or 11% from the fourth quarter of 2020.
Record quarterly originations drove an increase in loans held for sale at March 31, 2021, which increased by 26% from the prior quarter to $8.8 billion. The balance on loanDepot's warehouse lines of credit increased by 26% during the quarter due to the increased origination activity. Total funding capacity with its lending partners increased to $10.3 billion at March 31, 2021, from $8.1 billion at December 31, 2020. The increase of $2.2 billion was due to the addition of one new facility with a funding capacity of $500 million maturing in February 2024 as well as increases to existing facilities. Available borrowing capacity was $2.0 billion at March 31, 2021.
The fair value of mortgage servicing rights increased by 57%, or $644.2 million during the first quarter to a record $1.8 billion. This increase was driven by $529.5 million of new additions and a $231.0 million increase in the fair value due to a decrease in prepayment speed assumptions and increased interest rates during the first quarter of 2021 compared to the fourth quarter of 2020, partially offset by runoff of $118.1 million. During the first quarter of 2021, servicing retained loan sales increased as a result of the record level of loan originations.
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