Then the best place to ask your questions would be the UDK or KF2 forum https://forums.epicgames/forums/366-UDK
You just showed a picture of the material editor in UE4. Please also post a picture of the UDK material editor (could be that something else causes the problem) -> but in the UE4 the compression should solve the problem
Also before you import the textures, convert them to png/tga/jpg just to be on the save side