If my home was owner financed and the previous owner says that I will have to pay the taxes but she is keeping it in her name, is this legal?

May I please suggest that you seek legal help as soon as you can.  If the previous owner held the mortgage on the house and the transaction went along according to your plan then the new deed should have been filed and the tax records should reflect you as the owner.  Things here do not sound right.  Good luck.