Paragon Financial Corporation announced this week that they have agreed to terminate their planned merger with Shearson Home Loans, Inc., This termination was scheduled effective as of May 15, 2006. Under the agreement, Paragon will recoup 149,558,791 shares of its common stock and 79 shares of its Series F Preferred Stock. Since Shearson Home Loans, Inc. is a wholly owned subsidiary of Consumer Direct of America, Inc. Paragon Financial has agreed to pay Consumer Direct of America, Inc. approximately $21,000 in costs that were incurred by Consumer Direct of America, Inc. as a result of the unsuccessful merger transaction.

Paul Danner, Interim Chief Executive Officer of Paragon said that while it was disappointing that their plan to acquire Shearson did not materialize the way they had originally envisioned, he announced that they  "re-engaged" their previous investment banking relationship with Crusader Securities and "are hopeful that a modest capital infusion sufficient for us to pursue our business strategy is imminent." Danner also noted, "We continue to be optimistic about the Company's acquisition and organic growth plans, and are looking forward to pursuing a series of opportunities."