Karlis, I just came aross this on a hamster website and thought that it sounded like what has happened to your brother's hamster so thought you may like a read. It does seem to sound like a mite infection if the information on this website is aything to go by. I have heard of people using cat ear drops on small rodents to treat mites (as in the cat ear drops for mites) but I have never tried this so don't know if it would actually work - it might be another alternative as the person who tried it is a mouse breeder, owner and some one who shows them?? Anyway, here is the information i came across:

Fur Loss
Symptoms: Excessive scratching, especially to the point of exposing raw & red skin. (Note that a hamster's daily grooming and cleaning routine includes some "light" scratching, licking and "biting" of fur. This is normal.)

Causes: Mites, allergy to bedding, old age. Pine or cedar-based bedding can cause irritation to a hamster's skin, leading to excessive scratching and fur loss. Fur loss due to bedding irritation can usually be found at on the hamster's underside and legs as these are the areas in contact with the bedding.

If you use a horizontal wire cage (such as the Habitrail Safari or Space Station) and your hamster chews on the wire frequently, it may lead to a bald patch just above the nose. This is due to rubbing on the wire during chewing.

Old age can lead to some loss of fur around the legs or ears. This is normal and unavoidable.

Other causes of fur loss, quoted from missPixy here with updated information:
QUOTE
Sarcoptic Mange

clinical signs: there is hair loss around the face which includes infection. The condition is contagious.

diagnosis: microscopy to reveal the mite Sarcptes scabiei is necessary.

treatment: Ivermectin 1% given orally every 10 days, for a month.

Demodecosis: infection with these mites is common, but clinical disease is only seen if the immune system is compromised, in the young, pregnant or aged hamster.

clinical signs: these include dry skin, fur loss, infection and scaling.

diagnosis: microscopy of skin scrapings is necessary.

treatment: Ivermectin 1% can be given undiluted orally. one drop is given and repeated every 10 days as necessary. weekly amitraz baths are also effective.

Ringworm:

clinical signs: these include fur loss, dry skin with yellow flaking. The body and ears are affected. the condition is sometimes includes infections.

diagnosis: microscopy and culture on Sabouraud's medium should be carried out.

treatment*: the patient should be handled with gloves and may be washed with a pvoidone-iodine shampoo or an anti-fungal preparation such as natamycin. A the hamster's house should be cleaned out with povidone-iodine solution.
*Credit for Ringworm treatment information:
Diseases of Small Domestic Rodents, Second Edition, 2003.
V. C. G. Richardson

General Remedies: Change the bedding/litter to a recycled pulp or paper based type if you have been using pine or cedar. Supplement the hamster's diet with cod-liver oil and crushed yeast tablets to aid fur coat recovery. Pure aloe vera gel is useful for soothing irritated skin. Obtain the gel from a pharmacy and apply directly onto the hamster's skin twice daily. Recommended to do this while arranging and waiting for an appointment with a vet if the cause of the fur loss cannot be determined.

QUOTE
addition of vitamin A helps with fur growth. this can be found in carrots... try chopping some up to add to their meals. vitamin D as well... this can be found in milk products, and cheese (lowfat is preferable). also, there's something called Vitapet Small Animal Fur Conditioner that contains cod-liver oil, vitamins A and D

__________________

Run free my beautiful rainbow babies. I love you.