^ Ditto. Even if the clock spring in the steering shorted out, it can't apply the brakes in the 2007 D40 - the cruise control doesn't brake, the ABS won't do it either.
Two places to check: first, the dial in the lower section of the dash centre below the air conditioning make sure the dial points to "2WD". Second, in the dash, look at the symbol of the car. Only the rear wheels (bottom of the icon) should be black.
There could be a problem with the servo in the transfer case, or the sensors.
If the car is stuck in 4WD, extended periods on firm ground can cause the transfer chain to stretch.