Net Interest Income (Expense)

12 Months Ended

Dec. 31, 2019

Note 20—Net Interest Income (Expense)

Net interest income (expense) is summarized below:


	Year ended December 31,
	2019		2018		2017
	(in thousands)
Interest income:
From non-affiliates:
Cash and short-term investments	$	9,776	$	2,038	$	2,356
Loans held for sale at fair value		138,124		128,732		91,972
Placement fees relating to custodial funds		134,498		78,184		40,813
		282,398		208,954		135,141
From PennyMac Mortgage Investment Trust—Assets purchased from PennyMac Mortgage Investment Trust under agreements to resell		6,302		7,462		8,038
		288,700		216,416		143,179

Interest expense:
To non-affiliates:
Assets sold under agreements to repurchase (1)		74,215		22,463		60,286
Mortgage loan participation purchase and sale agreements		8,874		8,754		5,496
Obligations under capital lease		693		536		769
Notes payable		69,710		73,610		39,369
Interest shortfall on repayments of mortgage loans serviced for Agency securitizations		41,439		18,777		16,933
Interest on mortgage loan impound deposits		6,757		5,319		4,716
		201,688		129,459		127,569
To PennyMac Mortgage Investment Trust—Excess servicing spread financing at fair value		10,291		15,138		16,951
		211,979		144,597		144,520
	$	76,721	$	71,819	$	(1,341)

(1)

In 2017, the Company entered a master repurchase agreement that provided it with incentives to finance mortgage loans approved for satisfying certain consumer relief characteristics as provided in the agreement. During the years ended December 31, 2019, 2018 and 2017, the Company included $14.7 million, $48.1 million and $9.2 million, respectively of such incentives as a reduction in Interest expense. The master repurchase agreement expired on August 21, 2019.