So, this doesn't make a lot of sense to me.  The only real issue with the mortgage was that the notarization wasn't valid.  I am unclear as to how that would invalidate both the mortgage and the underlying note, assuming, of course, that no fraud was intended by either the mortgagor or the attorney who should have notarized the mortgage.   The fact that it was accepted in Registered Land shouldn't have any bearing on it as their function is to provide a certified chain of title somewhat akin to a ship's registry of transfers.  

I did a title a few years ago in Registered Land where the mortgagee affidavit on a foreclosure wasn't signed, which was an enormous technical problem as Registered Land had accepted the document for recording.  I think it took about one full year to clear the title on that one, but here, the issue appears to be more of a niggling little problem that could be swept away in bankruptcy.

I don't know anything about bankruptcy- but I do have a lot of experience with Registered Land. In Massachusetts the rule of thumb is to treat a land registration property just like any other - running title both grantor/grantee in registered land no matter what the Certificate of Title shows and on the recorded land side as well.  Mistakes are common, particularly now that we have both paper certificates bound into books and online certificates - what's on one isn't necessarily on the other. 

There are also endless issues with certain Registered Land court departments in certain Registries, being about 5 years behind with making up Certificates of Title.  That, in itself, is a nightmare and a half to deal with.