The developer mortgages the land use right certificate and the project under construction to the bank; Is it legal to sell to buyers?

As you said, if the bank agrees to change the holder of the relevant documents to the buyer. It's not illegal.

According to your description, it is too risky to pay in full if the bank is not clear. The strength and reputation of this developer is not famous and powerful.

The second-hand houses sold in the market now are basically mortgaged (mortgaged). The law allows this kind of transaction, but the money only goes to the bank, not through the developer.