Our GAAP earnings were $0.65 per diluted share for the third quarter, and our GAAP book value increased 4.7% in the quarter to $12 per share at September 30th.
This contributes to an overall year-to-date increase in our GAAP book value of 21% despite having raised our dividend each quarter of the year thus far.
When combined our GAAP book value growth in dividends paid resulted in a 27% economic return to shareholders year-to-date.
While we've generated strong earnings thus far this year, we've done so with record amounts of cash on hand, putting $557 million at September 30.
We generated a record $4.7 billion of lock volume during the quarter, making quick work of our prior record of $4.6 million two quarters earlier.
Overall, locks were up 22% versus the second quarter, 59% of which were on purchase money loans, an important statement about the quality of our pipeline and our sellers, given the benchmark rates during the quarter hit lows not seen since February.
And now the current mortgage rates are approximately 30 basis points higher versus the lows of Q3.
It is a helpful reminder that we have locked choice loans with over 100 different sellers thus far this year, important groundwork that we believe will bear fruit as we head into next year.
The depth of our distribution channels was another highlight during the quarter, as we sold $2.4 billion of loans alongside our securitization activities.
Our third quarter issuance, Sequoia 2021-6 was $449 million in size and executed well inside competing transactions marketed during a similar period.
In fact, liquid mortgages also acting as DLA on our most recent Sequoia securitization, which closed in October and is backed by $407 million of jumbo residential loans.
Rapid funding through which we provide accelerated settlement timelines for sellers, recently eclipsed $1 billion in purchases since program inception one year ago.
The third quarter was also another high point for CoreVest our business purpose lending platform, the third quarter $639 million in fundings were the highest since late 2019 and reflected a consistent balance between single family rental and bridge SFR fundings totaled $394 million, up 26% from the second quarter.
Production deposition does the price and SFR securitization in early October, backed by approximately $304 million in loans and CoreVests 19th securitization overall.
The transaction creates $300 million of financing capacity of which we sold liabilities representing 90% of the capital structure.
Procuring additional leverage on a non-recourse, non-marginal basis at a cost of funds of less than 2.5% on the issued bonds.
Importantly, the transaction was structured with a 30 month reinvestment period for loan payoffs.
As third quarter fundings total $245 million, an increase of 14% from the second quarter.
Our investment portfolio remained in step with our operating progress and continue to generate strong returns with our securities book appreciating in value by approximately 15 % [Phonetic] during the third quarter, and our bridge portfolio helping to drive net interest income higher.
Of the $34 trillion in total estimated US home value that we mapped out and invest today, approximately $23 trillion is in home equity, either backing existing debt or held for cash by a growing cohort of zero LTV borrowers, while Point and others have made progress and unlocking a small portion of this value.
We report a GAAP earnings of $0.65 per diluted share, representing a 27% annualized return on equity for the quarter, which significantly outpaced our dividends.
As a result, book value increased $0.54 or 4.7% to $12 per share on the quarter.
We delivered our third consecutive dividend increase of 17% to $0.21 per share ahead of market expectations.
We have consistently generated annualized economic returns in excess of 20% over the last five quarters.
On a combined basis, our operating businesses generated an annualized after-tax operating return of 31% in Q3.
They utilized roughly 450 million of average capital or 30% of our total allocated capital that produced two-thirds of our adjusted revenue for the quarter.
As a reminder, these earnings can be retained in the business, driving the differential between the nearly 5% increase in book value and 2% increase contributed from the investment portfolio.
The residential mortgage banking team generated a 26% after tax operating return on capital during the quarter.
Income from mortgage banking activities net was 12 million higher than the second quarter as loan purchase commitments of $3.3 billion increased 20% from the second quarter, and our gross margins improved approximately 25 basis points, which is above the high end of our historical range.
We saw continued strength from our business purpose mortgage banking operations, which delivered a 43% after-tax operating return on capital.
Aside from this, BPL mortgage banking results benefited from a 22% increase in funding volume, as well as strong execution on the securitizations completed in the quarter.
Following the $95 million of investment fair value changes we booked through the second quarter.
We had another $26 million in Q3 from further improvement in credit performance and spread tightening, particularly in our third-party reperforming loan and retain for best securities.
Separately, during the quarter, we settled call rights on to Sequoia securitization, acquiring 66 million of season jumbo loans at par, which had a small benefit to book value.
Looking ahead, net of our third quarter gains, there remains potential upside of roughly $3 per share in our portfolio through a combination of accretable market discount and call REITs that we control.
We estimate $1.2 billion of loans can become callable across capital and Sequoia through the end of 2022.
REIT taxable income increased to $0.14 per share from $0.11 in the second quarter due to higher net interest income.
Our taxable REIT subsidiaries earned $0.32 per share in Q3 up from $0.27 in Q2.
Our balance sheet and funding profile remain in excellent shape with unrestricted cash of $557 million, which equates to over 75% of our outstanding marginable debt.
We also had investable capital of $350 million to deploy into new investments.
During the quarter, we added $350 million of financing capacity to support growth of our operating platform.
We also completed the bridge securitization and a new $100 million non-marketable term financing collateralized by retain capital securities in our investment portfolio, each of those which contributed roughly -- to a roughly 20 basis point reduction in the cost of funds of our business purpose lending segment.
Our recourse leverage was unchanged at 2.2 times, as we incurred additional warehouse borrowings to finance higher loan inventories, while rotating certain financings into non-recourse debt and experiencing appreciation of our equity base.
During the third quarter, we maintain cost per loan for our residential mortgage banking operations of 28 basis points, compared with our historical average of 35 basis points during 2013 to 2019.

Summary:
Our GAAP earnings were $0.65 per diluted share for the third quarter, and our GAAP book value increased 4.7% in the quarter to $12 per share at September 30th.
We report a GAAP earnings of $0.65 per diluted share, representing a 27% annualized return on equity for the quarter, which significantly outpaced our dividends.