Gamera,
You are incorrect.
If the OP wants only to teach literature, s/he needs a degree in literary studies. The MFA is a degree in craft. Our MFAs will offer an occasional literature class, but their primary teaching duties are writing workshops: composition, intro to creative writing, writing workshops.
To be competitive in this job market for a literature position, one needs a Ph.D., and not just any Ph.D., but a Ph.D. from the absolute best program that accepts you. And even still, there are plenty of talented Ph.D.'s who can't land a TT job.
There have been several posts about the CC job market, which is a bit different from 4yr institutions, and Zarathustra and Pry would be better equipped to address such particulars, but the upshot is that CC's are no less rigorous than 4yr institutions in either their hiring practices and their day-to-day responsibilities. Things are a bit different, but not necessarily easier. CC's also require a certain number of credit hours in their subject (typically 18, and most MFA students do not have 18 hr in literary studies)
I don't know. My MFA program isn't unique in that it's a 60-credit curriculum that requires 18 credits of literature. I came out with an MFA that included 70 total credits and 21 credits of literature. I presently teach literature classes at a 4-year institution. Granted, literature isn't my primary teaching responsibility, but I could teach more sections if I wanted.
And as for CC jobs --- I've worked as a TT professor at the largest 2-year school in my state. I've been on over five search committees at the CC I've mentioned and so I like to think I have an idea as to the hiring practices of CCs in general.
I was just trying to say that OP can teach literature with an MFA and 18-credit hours of lit. OP /can/ definitely get a job teaching literature at a 2-year. I did it. And the PHD in lit isn't necessary for a 2-year. In fact, in some ways, it can be a disadvantage imho.
YMMV