Would Bank of America rather switch than fight?

Shares of BofA (BAC), the nation’s biggest mortgage lender, rose 1% early Thursday on a report the bank is discussing settling a dispute with bondholders who want BofA to buy back soured mortgages.

The bank said Wednesday afternoon it was taking steps to “continue constructive dialogue around the concerns raised” by the investors, including well connected money managers Pimco and BlackRock (BK) and the Federal Reserve Bank of New York.

It wasn’t long ago that constructive dialogue was the furthest thing from BofA’s mind. The bank’s response to the Oct. 18 letter called the investors’ allegations “baseless” and “misleading.”  CEO Brian Moynihan then said at a conference in November in reference to bondholders’ loan repurchase requests that “hand-to-hand combat goes on every day.”

Of course, the bank claims there has been no change in its strategy, and there’s no guarantee any settlement will actually result. Wall Street analysts were left scratching their heads about what BofA’s newfound willingness to talk actually means.

Morgan Stanley analyst Betsy Graseck, for instance, noted that the talks could be taken as either a good sign, showing BofA believes it can put some of its mortgage-related risk to bed cheaply, or as a bad sign, indicating it fears it would lose in court.

Similarly, Citi’s Keith Horowitz says it’s a “tough call” to say what BofA’s shift might mean, if anything. Like Graseck, he rates the stock buy.

“At this point, we are working with very limited information and as such it is very difficult to view this as either a positive or a negative,” he writes.

But with all the bad news swirling around the banks, anything that doesn’t spell immediate hardship starts to sound sort of positive, as Graseck notes. “The talks are one thing that is keeping the plaintiffs from filing a court case,” she says.