I'm in lending and I thought I read something about homeowners being granted an exemption of 401k withdrawals if the funds were used in a hardship case because their loans were about to adjust. Any response or direction would be much appreciated.

Home refinance does not qualify as exception to early withdrawal penalty.
You may be able to borrow money from your 401K account; check with the plan administrator.

A divorce-driven 401K distribution is QDRO (Qualified Domestic Relations Order), which qualifies as an exception to the 10% Early Withdrawal Penalty.

You may be confusing the various "hardship withdrawals" with withdrawals that qualify for an exemption from the 10% early withdrawal penalty. The term "hardship withdrawal" merely means that the 401(k) plan is obligated to allow you to make a withdrawal for a particular use - but any such withdrawal is still subject to both ordinary income tax as well as the early withdrawal penalty. Refinancing a mortgage does not qualify as a hardship withdrawal - consequently your plan is not obligated to allow you to make a withdrawal for this use. The list of hardship withdrawals is:

1. Un-reimbursed medical expenses for you, your spouse, or dependents.
2. Purchase of an employee's principal residence.
3. Payment of college tuition and related educational costs such as room and board for the next 12 months for you, your spouse, dependents, or children who are no longer dependents.
4. Payments necessary to prevent eviction of you from your home, or foreclosure on the mortgage of your principal residence.
5. Funeral expenses
6. Repair of a primary residence.