You're wrong. As Prosper itself has stated, it offers borrowers "a short term reduced payment." If Prosper tried to sue the borrower for the late payments (as it would be perfectly within its rights to do) soon after agreeing to such an arrangement, it would lose, due to the new payment agreement. Thus, this most certainly IS a "legally relevant modification."
ira01,
Is it your position that everything that might result in deferal of a judgement, including a continuance or agreeing to a calendering order, is illegal? Obviously if Prosper filed a suit immediately after a continuance or calendaring it would also lose. In your opinion does this also change the substance of the underlying agreement as distinct from being a procedural collection tactic resulting in a temporary delay?
Havastat, to explain further, if Prosper and the borrower agree to modify the contract, that agreement replaces the original contract, and requires a new breach. OK, there are a few possible exceptions, but not many. If you DON''T modify the contract, and sue, any court delays are likely to do nothing more than add to the amount of interest you will be entitled to recover. The court (again, generally speaking) won't modify (also known as "reform") the contract without the agreement of the parties.
There are lots of legal ways to modify the contract. Involuntary modification by the court is called reformation. ("My insurance policy doesn't have the limits I requetsted.") VERY hard to do unless there's an error in the way the contract is written, and the intent to write the contract otherwise is clear.
Settlements, accord and satisfaction, and other doctrines may kick in if the parties AGREE, but those aren't generally mposed by the courts.