There is so much horseshit in that article it is hard to know where to begin. The whole "judgments and liens against homeowners" is crap, as xraider pointed out. Moreover, it doesn't even make sense -- WGAF that many homeowners are underwater? The only relevant question is whether the particular deadbeat Prosper borrower homeowner is underwater. Prosper could easily and inexpensively check the approximate equity status of every defaulted homeowner (it knows how much money the homeowner owes on the mortgage via the credit report, which it can pull whenever it likes, and it could use Zillow (or more robust systems) for an approximation of FMV of the house). So Prosper could easily separate its collection of defaulted homeowners into two piles -- those underwater and those with significant equity. And it could handle each pile differently, rather than just using a vague generalization ("hey, lots of homeowners are underwater") to justify doing nothing.
Ditto re: the BK fraudsters. I am not aware of any evidence that Prosper ever challenged the dischargeability of any of its loans in BK, despite many of us repeatedly telling Prosper to do so. It is my understanding that loans taken within 90 days of BK filing are presumptively non-dischargeable as procured by fraud, at least absent evidence from the debtor that their circumstances significantly changed between obtaining the loan and deciding to file for BK. If Prosper were halfway competent, it should be able to win those motions on a regular basis, which would put the lenders on a very good footing -- since the debtor's other debts would have been discharged, he/she would have a lot more money available to repay the Prosper loan.