we have a 7/1yr arm mortgage--7 yrs will be in 2015--what happens then?
Oops sorry for the type Os

my home is not own by fannie mae nor mac, is there another program under harp that help people with conventional loan?
Hi since you loan is neither owned by Fannie or Fredie Mac, then you will not qualify if you are currently underwater on your home, unless your mortgage is a FHA. If you do have equity, then you can refinance with a conventional loan. Do you have one or two mortgages on your home?

What should be the average closing cost on a $580,000 loan in CA?
Depends on what loan you are taking out. If you are going conventional, without taking in account an escrow account I would estimate about around $5000. Also depends on the county. Some areas the buyers pays for their entire title insurance.

Is the lender still insured even after the borrower stops making monthly MIP payments on a FHA loan?
Yes The insurance is pooled for this reason to protect the investor