Why is mic on when guitar is plugged into iPhone 5

I am using an interface that is allows guitar to be plugged in, and send output through headphones, utilizing the amps in Garage Band.  However, the microphones on the iPhone are allowing ambient noise and not picking up the guitar.
Why isn't this working?
Using iPhone 5, ios7

I had this problem too, and solved it yesterday.
This anomaly is related with the 1st time iPhone activation by iCloud. without using iTunes.
If you erase your phone and restore your iPhone using iCloud backup, it won't work. But, if you erase your phone (backing up all informations on your computer) and restore using the iTunes software, it will work.
I did it yesterday and solved the problem.
What I did:
1) connected the phone on my computer and did a complete backup on my computer;
2) erase the phone (you can do it on iTunes or on the phone);
3) before put my account information on the phone, plugged it on the computer again;
4) follow the instructions on iTunes (restore the backup)
Sorry my poor English, i'm Brazilian. I hope it help!

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