President buys house for son with a check because son previous credit is bad and he can not get a mortgage. Son to get loan at bank and secure it with a CD in the President's name for the purchase price of the house. Loan proceeds will be used to pay Dad, who will in turn use the proceeds to buy CD that is securing loan. Son had ability to make the monthly payments on the loan.

So what problems do you see there?

You're making a loan to create the collateral that the loan is secured by? It's very weird. (Sorry I can't be of any help though).