American Home Mortgage (Symbol: AHM) is waiving the proverbial white flag as shares freefell 90% on resumed trading—closing all the way down to $1.04.

The company announced that it’s looking into liquidating assets, as it can no longer fund mortgages.

Next stop, bankruptcy? That’s what Keefe, Bruyette & Woods analyst Bose George thinks.

When talking about the ability of American Home Mortgage to survive through this disaster, George said, “the chances are low.”

It’s time to throw in the towel on AHM. Lenders, such as USB AG, JPMorgan Chase & Co and Bear Stearns Cos, have walked away. The AP is reporting that some of the lenders are now demanding lent money back—perhaps a desperate last gasp to get back anything before AHM disappears.

On Monday, American Home Mortgage failed to deliver $300 million in mortgages to home buyers. The company expects to be unable to finance up to $500 million in additional mortgages.

Despite the almost obvious implosion, shares of AHM are up over 5% in after-hours trading. One last gamble anyone?

Another financial company, Novastar Financial (Symbol: NFI), took a hit today. Shares of Novastar Financial dove 25.44% on the day to close at $9.64. Just think, seven months ago NFI was at $120 and the stock was as high as $40 last month.

The canary in the mine has long died, but if you still have financial companies in your portfolio, just about every expert is advising you to get out.