[hueyp]

> if the rates are much higher compared to a marginal increase in risk

Exactly. Same thing with public records -- having a public record could very well mean you have a higher default rate but what is important is LC punishes it more than they should so its a value investment.

We invest via a model (not filters) and the whole idea behind the model isn't to find what criteria makes someone less likely to default in absolute terms, but what makes one D2 loan less likely to default than another D2 loan.