Understanding Setting in Literature

In the following excerpt from a novel, the setting is described vividly to influence the mood:

"The old mansion loomed over the town, its crumbling walls and darkened windows evoking a sense of foreboding. Twisted trees surrounded the property, their gnarled branches resembling skeletal hands reaching toward the sky. A heavy fog often rolled in from the nearby hills, enveloping the area in a shroud of mystery and silence."

How does the setting contribute to the overall atmosphere of the passage?